The small-appliance business has changed at a remarkably fast pace in recent years. From the arrival of single-serve coffee makers, juice extractors, ear thermometers and robotic vacuums, the American home today is full of machines our grandparents wouldn’t recognize.
During this time of upheaval and innovation, only The NPD Group has kept ahead of the curve. From tracking shifts in market share to detecting competitive threats, we’ve remained the go-to source for gaining a winning advantage.
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The NPD Group, a global information company, has named Shay Krafft as lead on the firm’s U.S. Home Improvement business
More U.S. consumers are using e-commerce to purchase home-products, like small appliances, housewares, and textiles, but there is still room for growth.
The top home industry performers were presented with awards from The NPD Group during the International Home + Housewares Show, on Saturday, March 10, 2018. Small appliance and housewares brands with the largest increase in U.S. market share in 2017 were recognized, as were 6 companies with the largest online increase.
U.S. online sales of housewares products increased 18 percent in 2017. A majority of these housewares e-commerce buyers also purchased home improvement items, small appliances, and home textiles online, according to e-commerce insights from The NPD Group’s Checkout.
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U.S. online sales of home improvement products increased 34 percent in 2017, reaching nearly $20 billion, according to ecommerce insights from The NPD Group’s Checkout consumer receipt mining service. Double-digit growth was prevalent across all major home improvement category segments last year – everything from plumbing and hardware to outdoor living and decor.
Even before the holiday season began sales of multi-cookers were surging, and as of the 12 months ending November 2017, sales have increased 79 percent to more than $300 million,* reports The NPD Group, a leading global information company. A top performing category over Thanksgiving week, as well as the week prior, Instant Pot and other leading multi-cooker brands flew off the shelf over Black Friday weekend, and inventory was sold out or low but has since been replenished.
Tabletop categories are staples expected to be a part of any household, but the ways in which consumers are shopping for and purchasing these categories are a bit more unexpected.
Imagine what your life would be like if your mother was the CEO of a global company. Instead of just helping with your homework, she could provide the type of advice that would propel your career and allow you to overcome the many stumbling blocks that keep people from fulfilling their full potential at work. That’s the idea behind MOM.B.A. Essential Business Advice from One Generation to the Next by Karyn Schoenbart, CEO of The NPD Group, a global provider of information and advisory services.
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.
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We asked our top industry advisors to weigh in on how they see Holiday 2018 shaping up for their respective industries. Drawing upon Holiday 2017 trends, the retail environment during the first three quarters of 2018, and our 2018 Holiday Purchase Intentions survey, the advisors shared what to expect this holiday season, both in stores and online.
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Insights and Opinions from our Analysts and Experts
Black Friday sets a mood for the consumer and is an indication of things to come. But, while a good Black Friday makes us all feel holiday will do well, a poor one doesn’t mean poor growth performance for the holiday overall.
Whether they were in New York, Virginia, Florida, Illinois, or Texas, there were common themes that each of our industry advisors noticed as they hit the stores over this peak holiday shopping period. The biggest callout – Black Friday weekend has changed.
Click on the bars below to see the recaps, and follow #NPDHoliday on Twitter to see everything our advisors saw in their Black Friday travels.
The Industry Advisors
- Marshal Cohen
Chief Industry Advisor, Retail
- Stephen Baker
Vice President, Industry Advisor, Technology and Mobile
- Matt Powell
Vice President, Senior Industry Advisor, Sports
- Juli Lennett
Senior Vice President, Industry Advisor, Toys
- Joe Derochowski, Executive Director, Home, Appliances
- David Portalatin
Vice President, Industry Advisor, Food
Insights from the Experts
Chief Industry Advisor, Retail
This Black Friday was very telling – it had a lot to say.
The deals were plentiful, both in offerings and depth of product, but by day’s end, there was still product left, though not piled as high as at the start. The days of stampedes of shoppers fighting for too-good-to-be-true deals on limited quantity items seem to be gone. Instead, there were a fair number of shoppers queued up at store openings and seeking deals in a more orderly fashion.
Retailers were more prepared and organized than ever before which helped to create this sense of calm in a storm of deal hunting. Black Friday spread continued with some retailers, like Best Buy, starting their Black Friday promotions as early as November 1st. Online retailers, like Amazon, also got in the action well before Cyber Monday. Staggered opening times helped to eliminate some of the chaos, allowing the 20 percent of consumers who shopped Black Friday weekend to casually, and strategically, go from one store to another. New digital maps offered guidance to those items, and in-aisle checkouts made for a modern, speedy, and efficiently painless shopping process. Rather than relying on the element of surprise, retailers shared deals ahead of time, and offered larger quantities of door-buster product. Perhaps the biggest shift came from stores stepping up their online game, giving consumers more shopping alternatives.
The focus of the weekend has also changed. Shoppers and promotions were both focused more on self-gifting items like smart home and robotic vacuums than more personal gift items. Fewer shopping bags pointed to in-store shopping followed by mobile purchasing – avoiding the need to cash-and-carry, especially large items.
New trends emerging.
NPD’s Checkout data revealed that 2017’s peak holiday shopping occurred from noon to 4:00pm on Black Friday. Similar to last year, it was a slow start Thursday night, but by Friday at noon the malls were packed with shoppers. Last year, we saw surges on Thursday at 6:00pm, and on Saturday from noon to 2:00pm. Some of this year’s surges lasted longer, depending on where you were.
Thursday night went to Best Buy, Walmart, and Target. Once the peak hit on Friday, the malls were bustling and store traffic reached an all-time high at outlet centers across the east coast. In some cases, parking lots filled beyond capacity, and the sides of the highway became an alternate parking option. In the 20 years I’ve been doing this, I’ve never seen it so packed.
Apple, Pandora, and Adidas were among the busiest stores. Athletic/active apparel inspired stores, and apparel chain stores with aggressive discounts fared well overall. Mall based mass merchants, like Kohl’s, Target, and Walmart had a great range of successes in electronics, small appliances, toys, and select apparel. Best Buy did great with efficient offerings, toys, and self-gifting consumers.
Positive signs, but still room for improvement.
All in all, this was a great Black Friday. Consumers came out in droves and retailers stepped up efforts around inventory and servicing. Consumers still seemed excited about last year’s product innovations, and pricing was not as high as many predicted. All of this sets a healthy tone and good momentum for the holiday season. But, retailers can still do a better job of using technology in stores to create the endless aisle. They have the opportunity to provide more innovation, in the product and how it is sold.
Black Friday was a huge success for retail this year, making it clear that stores are not dead. Rather, stores have entered a transformation that will strengthen their ability to compete. The biggest challenge will be to extend this excitement beyond the holiday shopping season.
Vice President, Industry Advisor, Technology and Mobile
There is so much more to holiday shopping for Tech than just Black Friday.
“It’s the end of the world (Black Friday) as we know it, and I feel fine.” With apologies to REM, I think this sums up this weekend nicely.
We have been rapidly moving towards this point over the last few years – in fact, check out my quote in a 2010 TWICE article. We are at a point where the focus on Black Friday is totally misplaced. Over the last 8 years the fastest growing week for the tech industry has been Cyber Week, which represented almost 16 percent of sales in 2017, up from 12 percent in 2010. Thanksgiving week is key as well, steadily representing about 22 percent of all sales over that same time period, despite the growth in Cyber Week volumes. Consumers really have, as I said eight years ago, adopted their shopping patterns over to the reality of today’s retail – they now seem to view the intersection of retail and online seamlessly. We observed that trend over this year’s holiday shopping weekend, with seemingly diminished crowds on Thanksgiving evening and on Black Friday morning, followed by rapidly mounting traffic as Friday wore on. These shopping patterns prove that consumers will shop in stores when the time and product is right, but will also take advantage of the many blessings afforded to them by at-home shopping at any time of day.
This holiday is likely to be a continuation of the strong momentum we have seen all year in the tech market. TVs, as they always do, will lead the way. But, once again, we would expect to see the most popular deals drive consumers into higher price-points and bigger screen sizes this year. The other segment to call out for 2018 is smart home, and not just the smart speaker giveaway fest sponsored by Google and Amazon, but the myriad of products and prices afforded on all the next level of Smart Home goods, from locks and doorbells to cameras and lighting. The rapid expansion of these products into adjacent channels – from mass merchants and discounters like Kohl’s, to sporting goods and hardware stores – helped to make smart home products the most widely available technology products this Thanksgiving week.
We remain enthusiastic about the holiday season for the tech industry, and believe our three percent revenue growth goal is not only reachable, but also likely to be exceeded.
Vice President, Senior Industry Advisor, Sports
Black Friday was a blend of bland and bold for Sports.
After what was the most promotional holiday ever in 2017, as expected, holiday 2018 looks like it will eclipse last year.
With no true hot item or look, and with major brand drivers in a soft patch, brands and retailer must promote to drive sales. The brands were particularly aggressive this year at the expense of their wholesale partners. On the retail side, Dick’s took the bold stance of 25 percent off the entire store.
Traffic was very weak to start off the day, as Black Friday creep moved sales to earlier in the month. Clearly the ease of shopping on the internet precluded consumers from having to get up early and stand in lines. Parking lots filled up later in the day, but it did not appear that many were actually buying. The longest line I saw was at Starbucks.
Many of the Black Friday shoe releases were uninspiring, with brands still trying to force performance footwear on an athleisure market. However, there were a couple of bright spots for the sport industry. Fashion outerwear and fashion cold weather boots seemed to be moving well, as they had been for the last eight weeks.
All in, a lackluster start to what will likely be a lackluster holiday for sports retail.
Senior Vice President, Industry Advisor, Toys
Black Friday is as much about options as it is about bargains.
I admit it. I do not like shopping and I especially don’t like shopping on Black Friday. I don’t like hunting for a parking spot, I don’t like crowds, and I hate waiting in line. Patience is not my virtue. This Black Friday was a bit different – it was my job to go shopping on Black Friday. I didn’t actually have to buy anything, just observe, so I wouldn’t be forced to wait in any long lines. Overall the experience wasn’t as bad as I anticipated and, in fact, I enjoyed most of it. And, if I was going to spend time stalking people so I could take their parking spot, and immerse myself in wall-to-wall people, then I was going to take advantage of some Black Friday deals.
The two things that really stuck out for me this year were the timing of the crowds and the shopper experience.
My experience was that the serious bargain hunters did their most important shopping (for themselves) when the stores opened on Thanksgiving. But after a few hours, those hunters had gone home—they had swooped in and swooped out. They knew exactly what they wanted. Another large group of shoppers seem to have shopped online to get their favorite deals but then took advantage of in-store pick-up on Black Friday—there were long lines for BOPUS. The rest of the shoppers casually drifted into stores throughout the day on Black Friday, but not too early, and continued shopping until the stores closed.
In terms of the shopper experience, I was very impressed with the effort from most of the retailers to create a positive in-store shopping experience. From providing apps with maps to find exactly what you were looking for, to providing plenty of courteous, helpful, and cheerful staff on the floor ready to service customers.
However, there are still two areas where retailers could improve. First, get buyers out the door more quickly with multiple checkout options—arm employees with devices to check-out shoppers in the section where they shop, or provide self-checkout. Buyers who thought the lines were too long abandoned their items, or even full carts, in the stores – not good for the retailer or consumer. Second, if the item is out of stock, make it easy for shoppers to buy the item while they are in the store and eager to make a purchase. If the answer the shopper gets is to “go online”, chances are the shopper will find a better price online and buy it from your competitor.
If we do this again next year, I’ll need a more comfortable pair of shoes.
Executive Director, Home, Appliances
The spirit of Black Friday has expanded.
I am preparing for the day when my kids ask “Is there really a Santa Claus?”, armed with the response that Christmas is “something bigger, it is about the spirit of the season”. Black Friday used to be a single day filled with early morning shopping frenzy and busy traffic all day where consumers were pining to purchase items at bargain prices. Similar to my impending Santa Claus question, today, Black Friday is about something bigger, it’s about bargain shopping spread over multiple days and shopping platforms.
The mad rush has moved from Friday morning to Thursday night, at least for those retailers who were open on Thursday. While store managers said that Friday was busier than last year, Store managers and employees all talked about how Thursday night was “crazy” – it was busier than Friday. There was an evident scramble on Friday to deal with the stock outs and refresh the look of the merchandise. On the other hand, similar to recent years, there were no lines early Friday morning – other than a few people looking for deals on TV’s. The shopping really looked like any other Friday, with huge traffic flows from 11:00am to 4:00pm. Many consumers said they started much of their shopping on Wednesday because they could access the Black Friday deals that early.
Retailers have also done a much better job of integrating online shopping with in-store. The online promotions are reflecting the same promotions seen in the circular and in the store. This makes for a more seamless consumer shopping experience, but does pose some operational challenges for store employees looking to maintain the parallels amidst the mad rush of shoppers.
The door-busting categories for the early shopper seem to be led by TV’s and computers. At Menards, the drivers were dog beds, quilts, and step ladders. The home categories that received the most promotion were the categories that have been hot all year – Instant Pot, air fryers, coffeemakers, cookware, Dyson stick vacuums, upright vacuums, iRobot and Ecovac robotic vacuums, and electric toothbrushes. I expect to see these categories leading the sales for this week.
The majority of consumers have mixed feelings, but those who are the true ‘treasure hunters’ do miss the Black Friday bustle of years past. While Black Friday, the day, is no more, in-store traffic showed that consumers embraced the spirit of the day on Friday and the days preceding. All indications are this should be a good Holiday season, with both consumers and retailers emerging as winners.
Vice President, Industry Advisor, Food
Black Friday is for leftovers
I’ve never paid much attention to Black Friday before. As NPD’s Food Industry Advisor, my focus has always been on the big meal. I look at the way grocery retailers and food manufacturers collaborate to provide convenient yet authentic meal solutions for the vast majority of American’s who either feasted at home or prepared a dish to take to someone else’s home on Thanksgiving day. As far as Black Friday dining goes – many of us are too stuffed, and gorging on leftovers, to eat out at a restaurant.
In fact, on any given day in America, 13 percent of our meals are sourced from a restaurant. On Black Friday, that number is 12.4 percent. In other words, for restaurants, Black Friday is much like any other day. Many observers who are rightly awed at the throngs amassing at retail storefronts reasonably assume that adjacent eateries and mall food courts must pick up some customer traffic. It’s a reasonable assumption, albeit an incorrect one. Long Black Friday lines at Starbucks, or a crowded independent full-service establishment, are likely to exist on any other day.
For Black Friday shoppers, the pursuit of the elusive deal and beating the crowd to the next door buster takes priority over stopping to eat. After all, there are leftovers aplenty waiting at home!
Now, Valentine’s day…..let’s talk restaurants then!
This is a snapshot of our advisors’ Black Friday 2018 observations across apparel, appliances, food consumption, foodservice, home, retail, sports, technology, and toys. Follow #NPDHoliday to see what they are observing throughout the holiday shopping season. For more in-depth perspectives across our other industries, visit our Holiday Insights page.
Home products have been in the holiday spotlight over the past two years, delivering some of the hottest sellers of the season – a la Instant Pot fame of 2017. According to NPD’s 2018 Holiday Purchase Intentions survey, 1 in 3 shoppers plan to purchase home products this holiday season, so it should be another good year for the home industry.
The products that I expect to be hot sellers this holiday season speak to the big trends of convenience and entertaining that have been driving our industry forward. But the biggest boost will come from the new product innovations and marketing approaches that inspire gifting as well as self-gifting.
First half carries through to Holiday.
The top home categories from the first half of the year that speak to the basic needs and wants of consumers will continue to be of interest during holiday.
- Air Fryers
- Hair Stylers
- Robotic Vacuums
Traditional winners will return.
Black Friday and Cyber Monday promotional items and last minute stocking stuffers will once again be season winners for the home industry.
- Cold Brew Coffee Makers
- Electric Toothbrushes
- Espresso Makers
- Oral Irrigators
- Stand Mixers
Innovation captures attention.
- ‘Smart’ appliances are still in the early stages, but they are gaining traction. This will be especially important to watch in robotic vacuums where connected technology now represents half of all category sales, according to NPD’s IoT Connected Report Series.
- New solutions to old problems, like we’re seeing in new product introductions in the hair styling and blending categories will drive consumer excitement this holiday season. And, it won’t just be these products that benefit – complementary categories, and products that market themselves as solving similar problems can reap ancillary rewards as well.
The home industry continues to travel along its growth trajectory, but 2018 may look a little different, merely because 2017 results took such a dramatic leap forward. This was especially true in small kitchen electrics, which ended the year with dollar sales up 7 percent, and home environment appliances with 6 percent growth. These will be difficult comps to surpass, but our industry can do it.
Marketing and innovation efforts have improved in the key areas today’s consumers are focused on – health & wellness, entertaining, and convenience. Now, after a particularly strong holiday season, with some big category winners (multi-cookers, air fryers, and robotic vacuums) the industry needs to think about how to keep the spotlight on the home industry. Continued developments in innovation will be critical to staying top of mind with consumers, but those innovations need to have the consumer in mind – the wants and needs of the consumer must be front and center in these endeavors.
Will you be the next must-have item?
The key to success in 2018 lies in delivering products that address the key needs and desires of consumers as they look to enhance their home life in one way or another. Consumers are more engaged in daily activities and more engaged in trying new things. We need to continue to nurture this mindset and push the envelope in the areas that matter the most:
- Healthy living. Every aspect from what consumers eat to their living environment is part of today’s healthy consideration set.
- Unique and influential. The primary influencer has shifted from the retailer, to the brand or product, and now to our circles on social media. Products deemed worthy of social sharing, due to their impact on a consumer’s life, or their role in bringing something unique to it, will be winners.
- Entertaining with style and ease. Consumers are eating at home more and entertaining at home more. But the environment has shifted from a formal one, with an emphasis on the food, to a warmer casual environment that highlights the social aspects.
What other industries can we take cues from?
- Skincare has been a surging segment within prestige beauty, which may spell opportunity for personal care manufacturers. Selfie moments, an aging population, and the emphasis on a “healthy” appearance are trends that our industry can not only connect with, but also offer ways to simplify the process involved in achieving the desired results.
- Smart products were tech leaders during the holidays, and many major home appliance concepts are evolving into reality this year. Small home appliance manufacturers can learn from the smart products that are getting consumers’ attention – think voice activation, cross-product communication, and real-time usage learning communicated back to the manufacturer to fuel product improvements.
The most important thing to keep in mind, when looking for a successful year ahead, is to focus on making the consumer’s life better. If we hold true to this goal, 2018 will be another strong year for the home industry.
Home-related products will continue their hot streak during the 2017 holiday season. Whether they are meant as gifts for others, or something consumers ‘give’ themselves this holiday season, there will be some definite stand-outs because of the added value they deliver.
- Multi-cookers are this season’s ‘must-have’ item for the home, appealing to consumers’ desire for convenience in creating healthy meals.
- Coffeemakers and cookware will continue to be a top holiday draw, driven by a renewed focus this year.
- Robotic and stick vacuums will clean up with innovation and powerful marketing messages around simplifying household chores.
- Portable beverageware makes a great stocking stuffer for just about anyone – a great simple gift to grab that can also have a personal flare with color and design selections.
- Impulse shopping will drive wins in barware, and anything tea-related.
- Oral care, garment care, and other personal care appliances, while personal and practical, will prove to be welcome gifts under the tree, or in a consumer’s own shopping bag.
Early season results reminded of the importance of extending holiday season marketing efforts beyond holiday gifting, also focusing on life needs that are at play during this time. Temperature changes in much of the U.S. drove heaters to be a growth leader. But, stick vacuums, multi-cookers, robotic vacuums, and single-serve coffeemakers were also top performers because they are holiday staples, beneficial in preparing for the needs of the season. Blending and processing products also came to the surface with strong growth – this could also be the beginning of some true holiday shopping as consumers began to take advantage of early promotions.
Today’s consumers are deeply invested in their home life, and they are willing to invest in making sure it is the best it can be, and sharing that desire with family and friends this holiday season.
Source: The NPD Group / Weekly Retail Tracking Service
Excitement and happiness are present for many of today’s back-to-college shoppers, but they also report feeling stressed, anxious, and overwhelmed, especially as moving day gets closer. Combined with the fact that only 37 percent of parents/guardians of college students said they give their student a budget to limit the amount they spend on back-to-school shopping, there is clearly opportunity among these consumers. Manufacturers and retailers with on and off-campus-ready products have barely scratched the surface of their potential to help reduce some of the uncertainty among future college students, and their parents, while also growing their own sales and brand loyalty.
Employ Technology: Put technology to work and link the needs and guidelines for each college to in-store and online promotional efforts. Make your brand a stress-free solution to the consumer’s back-to-college research and planning for both on and off-campus living.
Provide Visual Checklists: Real-life store displays and online images depicting various coordinated college-living scenarios can act as a visual checklist for shoppers, and take some of the guesswork out of the process.
Utilize Events & Incentives: Bring college students and their parents together while providing a fun and productive experience. Educational and promotional in-store events can help back-to-college consumers understand what their budget should look like, and allow them to stretch their dollar a little further.
Eliminate Logistics Concerns: A retailer who can deliver directly to college students’ rooms, and do so as they arrive on campus, will get a top grade from back-to-college shoppers. Eliminate the worry of how to transport new dorm décor from home, or the need to recruit friends to move a compact refrigerator from the car or an on-campus drop off point, and get it all to their dorm room.
Word of mouth is one of the primary methods for students to prepare for college. As back-to-college shoppers talk to their friends, you want to be the resource they promote in their social circles. Retailers and manufactures can help retain more of the excitement and happiness of this major life moment and doing so will help them capture this consumer base as they mature into future life stages. It’s about connecting with the consumer, and connecting with their back-to-college needs.
Source: The NPD Group / LAB Series: 2017 Back-to-School Report
The general thinking around healthy-living has evolved. Instead of “going on a diet,” which is a short-term behavior, more people seem to be thinking of their diet in the broader sense and are focused on eating more healthfully, which for them is a longer-term proposition. This mindset shift is playing out in many home appliance and housewares products.
I’ve been tracking how people eat and drink for nearly 20 years, and when the focus is on being healthy the consumer’s response always indicates a need for more fruit, vegetables, and exercise. Blending and processing products seem to be the perfect solution to address the first two, and even the third if you think about an on-the-go lifestyle. However, blender/mixer/chopper systems and countertop blenders have been on the decline. Dollar sales of the multi-function blending systems were down 7 percent in the 12 months ending March 2016, and another 11 percent in the 12 months ending March 2017*. Traditional counter-top blenders have seen double-digit declines over the past two years*. How can this be?
According to NPD’s Eating Patterns In America, dieting has been declining slightly over the past few years, and doing so across the generations. NPD’s Dieting Monitor also shows that in each of the first three months of 2017, fewer consumers are dieting than during the same time last year. This does not bode well for products that market themselves around a dieting-related behavior, like making smoothies has become.
Dieting has evolved from an activity to a lifestyle change. This is why dollar sales of traditional food processors (+9%), hand blenders (+17%), and even non-electric kitchen gadgets focused on chopping, slicing, and coring (+3%) are all growing. Consumers are focused on integrating more fruits and vegetables into their normal diet, making them ingredients in the healthy foods and meals they are preparing. This way of thinking makes products like multi-cookers very appealing to consumers and sales show it – dollar sales increased by more than 50 percent a year for the past two years.
The “diet” isn’t dead, but the long-term mindset that is emerging around healthy lifestyles is the real opportunity for marketers. Consumers will be more willing to invest more in small kitchen electrics and food prep products that help them achieve their long-term goal of a healthier lifestyle rather than spend money on products that fill a ‘for now’ need. Marketers who embrace the healthy lifestyle proposition consumers are adopting will realize lasting results as well.
*Source: The NPD Group, Inc. / Retail Tracking Service
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.
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.
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