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Will a Holiday Hero be a 2017 Trailblazer?

Feb 9, 2017
Joe Derochowski, Executive Director, Industry Analyst ;
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When many key general merchandise categories struggled to meet holiday sales of the previous year, let alone beat them, home products categories proved to be a key component of retail sales success during Holiday 2016. Over the nine weeks of the Holiday 2016 shopping season, starting the first week in November and continuing through the last week in December, small home appliance dollar sales gained more than 3 percent over Holiday 2015 results. Ending 2016 on such a positive note among mixed reviews of sales and spending results should have the home-products industry kicking off 2017 with serious momentum, right? It will if we pay attention to what the consumer’s behavior told us during the holiday shopping season.

There were a few categories that really brought it home (pun intended) this holiday season in terms of sales gains versus last holiday season. Robotic vacuums led the way, more than doubling their Holiday 2015 season sales, along with hot-air stylers that also multiplied last year’s sales many times over, and vacuum sealers nearly doubled last year’s results.  Other big winners during Holiday 2016, each with significant double-digit gains over the prior holiday season, were hand and stick vacuums, hair dryers, and cookers (especially multi-cookers, pressure cookers, and fryers). All of these results tell me that consumers are looking for more convenient ways to approach life’s tasks as well as some technology and innovation behind those product promises – that is exactly what many products in these high-growth categories are delivering.

On the flip side, some traditionally strong categories, like upright vacuums, blenders/processors, and electric shavers, had strong unit performance during this past holiday season but dollar sales declined. This could indicate that consumers are returning to the basics and looking for fewer bells and whistles. More likely, given the signals sent by those categories with strong sales gains, is that the bells and whistles that are currently being offered by these products aren’t ringing with enough value for consumers to up their spend on them – these sales may have been driven, in part, by promotion.

Home-products performed well and Thanksgiving week was the peak sales period for small home appliances. However, in spite of this and the early and endless promotions, last-minute shoppers still played a big role in the industry’s success during the final weeks this year’s holiday season. The home-products industry wasn’t alone in this seeming lack of holiday shopping urgency. As my colleague, Marshal Cohen, said in his recent blog, “Retail needs to show consumers something they don’t want to miss out on.” We have become so reliant on playing the price game that, as an industry, we have forgotten how to be innovative in our approach to product development and how to be creative problem-solvers when thinking about product marketing.

It has become my mantra, and it is worth repeating – right now, the home-products industry is poised for significant growth. Millennials and Baby Boomers are both entering new life stages that impact their in-home needs, and purchase behavior over this past holiday shopping season clearly shows that consumers are willing to spend on products for the home.  Now it is up to manufacturers and retailers to pay attention to the signals. We need to deliver the innovation and excitement that consumers are asking for and the benefits to everyday life that they need. We need to learn from Holiday 2016 and build on that momentum in 2017 and beyond.


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