Appliances Market Research & Business Solutions

In the next 10 years, Americans are expected to replace more of their home-cooked meals with convenient meals prepared away from home.

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Port Washington, NY, May 9, 2017 – Online sales of home improvement products that span everything from plumbing and hardware to storage and décor, have grown 41 percent in the 12 months ending March 2017, reports The NPD Group, a leading global information company. The e-commerce home improvement market reached $10.9 billion in sales for the year, according to NPD’s receipt mining service, Checkout TrackingSM.

The NPD Group’s home division presented its fourth annual industry performance awards during the International Home + Housewares Show on Saturday, March 18, 2017. Awards were given to small appliance and housewares (non-electrics) brands with the largest increase in market share* in 2016, compared to 2015, according to NPD’s Retail Tracking Service. In addition, this year’s event included three new awards presented to top performers in key major home appliance industry segments. These new awards were based on NPD’s Checkout TrackingSM Online service for the Major Home Appliance industry, which captures online sales of major home appliances from consumer receipts.

A new home-products industry forecast from global information company The NPD Group, reveals that the small home appliances and housewares markets will continue on the growth path they returned to in 2015. Covering more than 100 small kitchen electrics, personal care appliance, home environment appliance, and housewares categories, NPD is forecasting*a nearly three percent combined dollar sales increase for these industry segments in 2017 versus 2016.

Consumers spent more than $56 billion on everything from small home appliances and non-electric housewares products to home textiles and online purchases of major home appliances in 2016, according to global information company The NPD Group. Overall, 2016 was a positive year for the home industry and growth was driven by products that delivered innovative approaches to addressing the three essential areas for today’s consumer – health, convenience, and living in the moment.

Online sales of major home appliances have grown, and growth is being driven by peak holiday promotional weeks between May and December, reports The NPD Group, a leading global information company. In 2016 consumers spent $4.0 billion on major home appliance online purchases, a 38 percent increase from 2015 sales, according to NPD’s receipt mining service, Checkout TrackingSM.

According to global information provider, The NPD Group, annual 2016 U.S. dollar sales of home automation products experienced growth of 57 percent versus 2015. Security and monitoring products continued to lead the category, making-up over 60 percent of dollar share. Smart entry devices, such as smart doorbells, saw an increase in dollar and unit sales of 171 percent and 206 percent, respectively, when compared to the year prior, according to NPD’s Retail Tracking Service.

In preparing their homes and minds for the holidays, and the festive family gatherings they bring, consumers turn to scent and décor to get into the holiday spirit. Home fragrance is most important to consumers when company is expected, as scents are a way of honoring their guests and ensuring they have a pleasant visit, according to Scentiments, a new suite of consumer insights and tools on the fragrance industry from global information company The NPD Group.

“The 2016 Holiday shopping season will be a happy one for the home-products industry,” said Joe Derochowski, executive director and home industry analyst, The NPD, Group, Inc. “Large, growing portions of the population are hitting key life stages, so marketing to these moments will be critical during the holiday season and beyond. Manufacturers and retailers who are able to address these key moments, especially with innovative products and thinking, will create excitement among holiday shoppers.”

Millennials are at the center of the niche segment of consumers embracing craft coffee brewing methods at home, according to the new Craft Coffee at Home report from global information company The NPD Group. Craft coffee brewing, like using pour over cones, French presses, and vacuum brewers, is how 11 percent of U.S. young adults, ages 18 and over, brew their coffee at home.

Blending systems were the “it” appliance in recent years as consumers blended, mixed, and chopped a variety of concoctions, like smoothies and juices, but these gadget stars have begun to lose their luster. Dollar sales of blender/mixer/chopper systems changed their trajectory in the year ending May 2016 with ten percent declines in dollar sales, driven in part by 6 percent fewer of these items being purchased at retail, according to global information company The NPD Group.

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.

2016 was a great year in the Kitchen Electrics market, ending the year up +6% in dollars, with dollar growth in all but four of the Kitchen Electrics categories NPD measures. A large factor in the overall performance for 2016 was the fact that Q4 was up +7%. November-December, the months most important to the holidays, were also up 7% vs. the same period last year, accompanied by +1% overall unit growth.

Vacuum growth was driven by Stick and Robotic Vacuums, with Stick up 28% in during the two key holiday months.  Personal Care overall growth was +5% YoY, with strong growth in Hair Dryers, and Men’s Trimmers.

Total Coffee is seeing continued strength, up +4% in November-December, ending the year +6%. Units in November-December grew +2%, with Auto Drip and Espresso combined picking up most of the unit volume. Espresso makers were a particularly hot item in Nov-Dec, up over 30% compared to last year. If you were watching the flyers during this timeframe you couldn’t help but notice the hot promotions in this category, and clearly they moved the needle.

One product to watch in the coming year is Multi-cookers. The Cookers category (including slow cookers, rice cookers, steamers, fryers, roaster ovens and multi-cookers) grew 20% in November-December. Many of these categories in Cookers are growing, but Multi-cookers have more than doubled dollar sales in 2016. Multi-cookers were also near the top YoY dollar growth categories in all Small Appliances. The category builds on the trend we’ve observed for a while now – growth in devices aimed at reducing time spent on food prep – or even handling the whole process or reducing it to a few steps – slow cookers, toasters, breakfast sandwich makers, and blenders are similar examples.

Overall for Small Appliances, 2016 was the strongest revenue year in the last four years.  Hopefully 2017 continues to build on this strength.

I often get asked, should I focus on Millennials or should I focus on Baby Boomers?  My response is, “Why not both?” They are more alike than most people think.

Yes, there are differences but the untapped opportunity lies in leveraging their similarities – why not capture two sales instead of one? The key thing for home-products marketers to understand is that their approaches should not be exclusive to Millennials. There are similarities across the generations based on their life moments.  Finding ways to leverage the different perspectives of these two consumer groups around their similarities at life moments can lead to creative marketing and a new kind of conversation. 

Healthy-Living

Millennials are very aware of the value of healthy-living, and eating at home. This generation is much more interested in health, and they are more likely to eat fresh, homemade foods than other generations when they were younger. Boomers, like their predecessors when they were this age, are interested in healthy-living to maintain or improve their health, looking towards longevity and enjoying the age they are at.

Kid-Free Zones

Most Millennials are in the pre-kids phase of their lives, and most Baby Boomers are becoming empty-nesters or retiring, so both groups have more “me time”.  As a result, many Millennials and Boomers are spending more time looking for experiences. They are interested in more homemade food preparation and at-home entertaining – as a result, they are stocking or restocking their kitchens.

Balancing Individuality and Value

Millennial interest in individuality and environment will drive them to personalize their space and the experiences they create for themselves and those around them. Similarly, Boomers who now find themselves able to focus on their own wants and needs rather than that of their children, are seeking ways to express their personal style and create a space that is about them.

Both of these generations are watching their spending, but they are willing to spend. Boomers have new-found spending power as their kids leave home and a desire to focus on themselves, while staying fiscally responsible. On the other hand, the Millennial generation is low on income. But Millennials balance price with the importance they place on how their purchases define them, so ‘value’ becomes a part of the equation. This balancing act that both of these generations are engaged in is a driving force behind the fact that four of the top five small appliance categories are growing fastest in the $100-$200 range, rather than the under $100 segment.

The home-products industry will grow because of the demographic changes about to hit us as Millennials enter their first critical life stages. But, how high that growth is will be defined by our ability to execute effective products, marketing, and merchandising that meets their needs, while not losing sight of our other customers. The Millennial conversation needs to turn into a multi-generational conversation that is about life’s key moments. Engaging the consumer in this kind of conversation enables marketers to extend their reach beyond a single target audience and attract them to products in a more personal way.

With the back-to-college spend estimated to reach $6.6 billion this year, competition among retailers is already heating up like nothing I recall in recent memory. In order to capture their fair share of the sales pie, retailers are pulling out all the stops, developing college registries and wish lists, providing product recommendations, and in-store pick-up options convenient to the college location, to name a few.  National retailers have even posted packing lists specific to a wide range of colleges and universities, detailing approved/unapproved items, or struck deals to operate co-branded websites for everything from textbooks to ramen noodles.

It should come as no surprise that the biggest chunk of planned back-to-college spend is on electronics, followed by apparel, and footwear; but let’s not overlook the market opportunity for home-related products, which is estimated at $1 billion annually for home textiles and small appliances alone. ² That’s nearly 15 percent of the total back-to-college spend, and doesn’t even include housewares, décor, and furnishings. Clearly, there’s plenty of reason to give attention to home products during the back-to-college season.  In the small appliance world, back-to-college is the key selling period for compact refrigerators, and, to a smaller degree, countertop microwave ovens and electric kettles. ³

Another area of opportunity for the home industry lies in aligning the online shopping experience with the equally important in-store experience (at least half of shoppers still prefer a physical store experience⁴). Retailers vying for the attention of consumers know consistent messaging and coordination of complementary promotions across these two channels is critical to success.

While we can expect most customers to be price sensitive as they gear up to start tuition payments, retailers can also effectively compete on shopping solutions by simplifying their selections, having consistent messaging and promotions both in-store and online, creating the right adjacencies, making recommendations, and providing flexible purchase and delivery options.

¹U.S. Census Bureau, October 2013
²Source: The NPD Group / Consumer Tracking Service, 2014
³Source: The NPD Group, Inc. /Retail Tracking Service, 2014
⁴Source: TheNPDGroup, Inc. / December 2014 Omnibus

With the back-to-college spend estimated to reach $6.6 billion this year, competition among retailers is already heating up like nothing I recall in recent memory. In order to capture their fair share of the sales pie, retailers are pulling out all the stops, developing college registries and wish lists, providing product recommendations, and in-store pick-up options convenient to the college location, to name a few.  National retailers have even posted packing lists specific to a wide range of colleges and universities, detailing approved/unapproved items, or struck deals to operate co-branded websites for everything from textbooks to ramen noodles.

It should come as no surprise that the biggest chunk of planned back-to-college spend is on electronics, followed by apparel, and footwear; but let’s not overlook the market opportunity for home-related products, which is estimated at $1 billion annually for home textiles and small appliances alone. ² That’s nearly 15 percent of the total back-to-college spend, and doesn’t even include housewares, décor, and furnishings. Clearly, there’s plenty of reason to give attention to home products during the back-to-college season.  In the small appliance world, back-to-college is the key selling period for compact refrigerators, and, to a smaller degree, countertop microwave ovens and electric kettles. ³

Another area of opportunity for the home industry lies in aligning the online shopping experience with the equally important in-store experience (at least half of shoppers still prefer a physical store experience⁴). Retailers vying for the attention of consumers know consistent messaging and coordination of complementary promotions across these two channels is critical to success.

While we can expect most customers to be price sensitive as they gear up to start tuition payments, retailers can also effectively compete on shopping solutions by simplifying their selections, having consistent messaging and promotions both in-store and online, creating the right adjacencies, making recommendations, and providing flexible purchase and delivery options.

¹U.S. Census Bureau, October 2013
²Source: The NPD Group / Consumer Tracking Service, 2014
³Source: The NPD Group, Inc. /Retail Tracking Service, 2014
⁴Source: TheNPDGroup, Inc. / December 2014 Omnibus

It is an interesting time in the coffee maker market. The total coffee machine market declined in Canada by -15% in dollars YoY in 2014, largely driven by single serve coffee machines, which declined -17% in the same period. The decline was even greater in the fourth quarter.

This makes sense to me. When the single serve coffee market was developing and new, pod coffee machines were a hot gift item. However, now the market is more mature and the number of new customers to the category is declining. In our February Omnibus consumer panel study, we found 42% of respondents currently own a single serve coffee system, and less than half of those consumers intend to replace their machine in the next 3 years. Also, of people without a single serve machine, 75% have no intent to purchase one, and only 10% intend to buy one in the next year. To me, it looks like there aren’t many first time buyers remaining in the single serve machine market.

Despite the single serve market seeming to be moving into a more mature stage, there are some interesting bright spots in the coffee market that point to further opportunities. In my household, my single serve machine has been a gateway into the world of coffee, and I suspect for many other consumers as well. I have friends that use a single serve on weekday mornings for speed, and then use a more time and labour intensive manual method (such as pour over coffee, French press, and cold brewing) on the weekend.

Coffee grinder sales may be an indicator of the growth of these non-electric methods of coffee brewing, having grown 7% in units year over year in 2014. Some of the more exciting products I saw showcased at the International Home and Housewares Show in Chicago last week included an electric siphon coffeemaker and an electric pour over machine from KitchenAid – making these traditionally manual methods easier for the end user. Drip coffee makers YoY declines have been steadily shrinking since August 2014. If this trend continues, drip coffee may start to recover some of the volume it has lost to single serve over the last few years, and with new innovations bringing premium or gourmet coffee brewing methods into more homes, the coffee world remains exciting as ever.