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INDUSTRY REPORT
The state of Furniture ecommerce: 2025
Furniture brands saw revenue drop 35% and units fall 41% in 2025. Traffic declined 50%, pricing pressure intensified, and rising CPC made advertising less effective. Even with better margins and fulfillment, collapsing demand couldn't be overcome.
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Key takeaways
- Demand evaporated despite execution gains: Fulfillment improved and margins expanded, but traffic fell 50% and revenue dropped 35%, proving operational fixes can't solve demand collapse
- Pricing power backfired:ASP rose consistently while discounts fell from 24% to 16%, but higher prices drove shoppers away rather than protecting revenue
- Paid media couldn't save the funnel: ROAS declined throughout the year as CPC rose 13% and ad spend increased, forcing brands to pull back investment by December
- Inventory planning broke in both directions: Q1 had high OOS rates despite elevated inventory (wrong mix), while Q4 saw worsening stockouts as inventory depleted (insufficient quantity)
- Conversion held but couldn't offset traffic loss: Conversion rates remained fairly consistent, indicating the problem was shopper interest, not purchase intent among those who visited
- Margin expansion masked unit economics crisis: Unit margins grew from 35% to 51%, but the unit base collapsed 41%, making profitability gains irrelevant to overall business health
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