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1 A Harsh Winter Can Warm Up the Home By Debra Mednick, The NPD Group, Inc. Covering Quarter 4, 2014 As the warmer weather is finally upon us, the frigid temperatures endured by most Americans and seemingly unstoppable snowfall in the Northeast this past winter may be more like a distant memory. However, at the time, there were understandable worries as to whether the weather would have a negative impact on sales of home products or would consumers simply turn more often to buying from non-brick & mortar venues such as online, catalog or TV shopping. About Housewares MarketWatch Housewares MarketWatch reports both point-of-sale (POS) and consumer data from NPD databases. The quarterly data covers various product categories within the divisions of Small Appliances and Non-electric Housewares. The information contained on the following pages is offered as a snapshot of a category s performance, both from the retailer (POS) and consumer perspectives. The POS data covers the retail channels of mass/national chains, department stores, specialty stores and drug stores (personal care and home environment only). Each issue of Housewares MarketWatch will feature several categories from the Small Appliances and Housewares divisions. Complete data on a category can be purchased by visiting NPD s website at the Data and Methodology section on page 9 for an explanation of how the data is compiled. Sunny Days Ahead for Non-Electric Housewares When all was said and done, it appeared that if weather had an effect, it likely wasn t a negative one. Looking at the non-electric housewares categories, we had seen a glimmer of optimism at the end of 2014 and, as predicted, demand (unit volume) during Q vs. the prior year moved positively for many of the largest categories (such as everyday dinnerware, cookware and everyday flatware). The pace of sales moved into positive territory, but was not as robust due to a combination of consumers purchasing more open stock, buying on deal or trading down. Categories that realized growth in both unit and dollar sales included: cookware, metal bakeware, everyday flatware and stovetop kettles. What ultimately helped spur sales growth for these housewares categories that have been challenged to grow? Ironically, one factor may have been the extreme weather giving rise to more food prep at home and consequently triggering purchase of more commonly used housewares items. While it s an interesting theory to tie the weather to a purchase pattern, a much bigger factor is first-timers coming into the marketplace younger consumers beginning to set up their home. While growth is certainly good news, total industry unit volume and sales during Q were still below levels two prior with two exceptions: everyday flatware and stovetop kettles. Improved merchandising via carded programs helped stimulate impulse purchases of everyday flatware while the growing popularity of manual coffee brewing such as French press and pourover have invigorated sales of all water kettles, both stovetop and electric. For consumers attracted to products of a vintage era or style, stovetop kettles are a perfect solution while also providing decorative options in color and style, fitting the desire for both form and function. Mixed Results for Appliances With respect to small appliances, first quarter growth for kitchen electrics and floor care was marginal and much softer compared to the trend of the year prior. The trend for personal care appliances was the real surprise after many periods of mainly holding steady or declining, demand and sales appear to be moving in a much more positive direction based on performance during Q Weather trends do not appear to be a factor in personal care, rather the continued popularity of men s facial hair spurring demand for trimmers and related products, as well as the movement toward health and age management, as evidenced by growth in continued on page 8
2 TABLETOP: Dinnerware, Beverageware, Flatware TOTAL TABLETOP DINNERWARE INCOME Percentage purchased by head of household income $448,002 13% 16% 11% 11% 12% 12% 15% 10% Under $15,000 $15,000- $29,999 $30,000- $44,999 $45,000- $59,999 $60,000- $74,999 $75,000- $99,999 $100,000 - $149,999 $150,000+ FEATURES: Fine flatware sales, representing 16 percent of total flatware, are down 21 percent in Q1 15 compared to a year ago. PURCHASE BEHAVIOR: Nearly 70 percent of flatware sold in Q1 15 were planned purchases. PURCHASE INFLUENCE: Half of dinnerware purchased in Q1 15 was on promotion. PRICE SEGMENTATION: During Q1 15, sales of formal fine dinnerware sets priced between $100 and $149.99, which represent 40 percent of units sold, were down 16 percent. PURCHASE MOTIVATORS: When it comes to selecting dinnerware, consumers said appearance, price and brand were the top motivators in Q1 15. ONLINE SALES: Less than 10 percent of beverageware was purchased online in Q1 15. Source: The NPD Group 2
3 COOKING/KITCHEN: Cookware, Bakeware, Cutlery TOTAL COOKING/KITCHEN CUTLERY AGE Percentage purchased by head of household age $761,052 22% 20% 17% 17% 11% 13% FEATURES: In Q1 15, dollar sales of cookware with ceramic coating increased by 25 percent compared to a year ago, representing 13 percent of all cookware sold. PURCHASE MOTIVATORS: When it comes to selecting bakeware, consumers said price, good value and easy to clean were most important to them in Q1 15. ONLINE SALES: 25 percent of cookware dollar sales in Q1 15 were from online purchases. PRICE SEGMENTATION: In Q1 15, unit sales of open stock bakeware priced under $10 were up by 7 percent, accounting for more than 80 percent of total sales. GIFTING: 30 percent of dollars spent on cutlery in Q1 15 were on gift purchases for someone else. IMPULSE: Nearly one-third of dollars spent on cutlery in Q1 15 came from unplanned purchases. 3 Source: The NPD Group
4 Small Appliances: KITCHEN ELECTRICS Price Segmentation TOTAL KITCHEN ELECTRICS $50 - $99.99 TOASTERS PRICE Percentage purchased by price COOKING & SPECIALTY ELECTRICS FOOD PREP/ BEVERAGE $809,409 $1,305,775 3% $25 - $ % $496,367 Under $25 77% FEATURES: Approximately 40 percent of toaster ovens sold in Q1 15 were convection. PURCHASE MOTIVATORS: When it comes to selecting a juice extractor, consumers said price, good value and features of this brand were the top motivators in Q1 15. ONLINE SALES: Nearly 40 percent of all electric kettles sold in Q1 15 were purchased online. PURCHASE INFLUENCE: During Q1 15, more than half of breadmakers purchased were on sale. IMPULSE: Approximately 70 percent of all blenders sold in Q1 15 were planned purchases. Source: The NPD Group 4
5 Small Appliances: PERSONAL CARE HAIR CARE/ GROOMING ORAL CARE, HOME HEALTH, & OTHER PERSONAL CARE $941,723 TOTAL MARKET $1,524,076 HAIRDRYERS INCOME Average purchase price by household income $20 $22 $25 $582,353 Less than $45,000 $45,000 - $74,999 $75,000+ FEATURES: 23 percent of lighted mirrors sold in Q1 15 had 10x or higher magnification. PURCHASE MOTIVATORS: When it comes to selecting a specific curling iron/styling appliance, consumers said price, brand and features of this brand were the top motivators in Q1 15. ONLINE SALES: Only 8 percent of shower heads sold in Q1 15 were purchased online. PRICE SEGMENTATION: 20 percent of hairdryers sold in Q1 15 were priced between $25 and $50, up 4 points compared to last year. IMPULSE: Nearly one-third of all massaging appliances sold in Q1 15 were unplanned purchases. 5 Source: The NPD Group
6 Small Appliances: FLOOR CARE TOTAL MARKET HAND/STICK VACUUMS INCOME Percentage purchased by household income $1,049,048 19% 16% 9% 11% 13% 12% 11% 9% Under $15,000 $15,000- $29,999 $30,000- $44,999 $45,000- $59,999 $60,000- $74,999 $75,000- $99,999 $100,000 - $149,999 $150,000+ FEATURES: Dollar sales of self-propelled upright vacuums grew by 89 percent in Q1 15, compared to a year ago, while the average selling price declined 19 percent. PURCHASE MOTIVATORS: When it comes to a selecting deep carpet cleaner, consumers said brand, price and features were the top motivators in Q1 15. ONLINE SALES: Nearly 40 percent of robotic vacuums sold in Q1 15 were purchased online. PRICE SEGMENTATION: Canister vacuums with an average selling price between $100 and $200 grew by 57 percent in Q1 15 compared to a year ago. PROMOTION INFLUENCE: Approximately 40 percent of stick vacuums were purchased on sale during Q1 15. Source: The NPD Group 6
7 Home: KITCHEN & DINING TEXTILES TOTAL MARKET KITCHEN LINENS AGE Percentage purchased by head of household age $290,333 19% 17% 18% 20% 15% 10% FEATURES: Nearly 40 percent of dollars spent on kitchen linens in Q1 15 were on products with a pattern or print. PURCHASE MOTIVATORS: When it comes to selecting kitchen linens, consumers said appearance, price and material/texture were most important to them in Q1 15. ONLINE SALES: Online sales for kitchen linens doubled its dollar volume in Q1 15 compared to Q1 14, representing nearly 20 percent of total kitchen linens business. DEMOGRAPHICS: 20 percent of kitchen linen dollar sales in Q1 15 came from products purchased by men, a double-digit increase in dollar sales compared to Q1 14. SPECIAL OCCASION: One-third of kitchen linens purchased in Q1 15 were on sale. 7 Source: The NPD Group
8 A Harsh Winter Can Warm Up the Home continued from page 1 massagers and oral care. Although demand remains soft around hair care appliances with a more relaxed approach to hair care, those who are buying are trading up either to more innovative items or simply more premium price points. Despite the relative softness, there were still plenty of kitchen electric categories catching the attention of consumers which revolved around enjoying a hot breakfast (i.e. griddles, waffle makers, breakfast sandwich makers, toasters and toaster ovens) or simply cooking up a warm meal without turning on the oven or using the stovetop (i.e. microwave ovens, slow cookers, electric skillets, combi-grill/griddles and rice cookers). One-pot meals have become especially popular, as have the inclusion of more proteins and rice-based dishes. Sales of dutch ovens and stock pots have also realized an uptick in sales for similar 2 3/18/15 12:52 PM Page 1 reasons. Sales of coffee brewers continue to struggle with measuring up against record-high comps. However, some bright spots are beginning to poke through the clouds demand for drip coffeemakers started to pick up in Q1 2015, although price kept sales growth at bay. Espresso Makers, still a relatively niche segment, is starting to once again experience a rejuvenation in popularity spurred by greater placement and advertising. Sales of coffee grinders and kettles have also benefited due to greater interest in manual coffeemakers. While wildly popular for the past few, growth of blenders and blender systems, the perfect vehicle to help whip up a seemingly nutritious snack or meal replacement full of fruits and/or vegetables and perhaps delivering some vegetarian protein, have started to slow down. As for floor care, overall growth was driven by the core category, uprights. But, stick vacuums also boosted growth with continued and significant trade-up, followed by improvements in sales of hand and robotic vacuums. Versatility, convenience, and to some degree, innovation are the overarching themes in floor care. Older consumers are seeking lightweight options and with an increasing number of homes with mixed flooring, versatile products are increasingly attractive. For more information, contact Janine Marshall at housewares.org/attend housewares.org/exhibit housewares.org/networking Where High-Design and Intelligent Innovation is on Display 2,100 Exhibitors from 6 Continents It s Just Plain Smart! Source: The NPD Group 8
9 DATA AND METHODOLOGY NPD has a standard data model that is used for all categories that incorporates both consumer and point-of-sale (POS) databases. These two data sources are highly complementary and are used to support one another. Point-of-Sale (POS) databases are assembled from retailers' records of actual sales by product as collected at the cash register. Consumer databases are developed using online purchase surveys completed by a largescale rotating sample of consumers. These data produce estimates of sales by product for the total marketplace. More importantly, the consumer surveys capture information about each purchase, such as buyer demographics, the product's intended use and other purchase motivators. CONSUMER METHODOLOGY The NPD online consumer panel is comprised of pre-recruited individuals who have agreed to participate in NPD online surveys and have completed a comprehensive demographic questionnaire. The use of an established online panel assures good cooperation levels and predictable demographic balance among panelists. Consumer panelists are asked about their recent purchases in a survey administered via the Internet. The responding sample is demographically weighted and projected through a series of steps to represent the U.S. population. Each month, over 200,000 individuals are selected from the NPD online consumer panel to participate in the appliance study. Each month, over 30,000 U.S. households are selected for the housewares and home textiles studies. POS METHODOLOGY NPD collects point-of-sale retailer data from selected retailers. These data are the actual sales for the chain on an SKU-by-SKU basis. The data are combined with data from other retailers to produce reports on certain categories by channel, where a sufficient number of retailers are cooperating and where sufficient market demand exists for the database. 9 ABOUT THE NPD GROUP, INC. The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers and service companies rely on NPD to help them drive critical business decisions at the global, national and local market levels. NPD helps our clients to identify new business opportunities and guides product development, marketing, sales, merchandising and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys and wireless. For more information, contact us or visit Deborah A. Teschke, Senior Editor Debra Mednick, Contributing Editor Janine Marshall-Bolton, Contributing Editor Tom Goodman, Design Published by IHA For more information, contact Debbie Teschke at ; or dteschke@housewares.org 6400 SHAFER COURT, STE. 650 ROSEMONT, IL USA TEL: FAX: Source: The NPD Group
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