issue: December 2005 APPLIANCE Magazine
Demographics You Can't Afford to Ignore
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Tim Somheil, Editor
Next month, APPLIANCE magazine will publish its annual Forecast issue. We'll look at economic, political and retail factors impacting the performance of the appliance industry worldwide. But when it comes down to it, it's the customers that drive the industry.
Two of the most important appliance industry customer breakouts are remodelors and baby boomers. Knowing them can help any appliance company clarify its product development strategies-but it's a tricky business, taking the pulse of a customer base.
Remodelors are some of the appliance industry's favorite customers, tending to buy full-featured, high-value appliances. In fact, a new NPD Group study, The Kitchen Remodel: A Consumer Perspective, says that it's the need for a new appliance that often motivates a remodeling project.
The study reports that one in 10 homes remodeled in the previous year, but only one in 20 plan to remodel in the coming year. That's not illustrating a downturn, it is just indicating that remodeling projects are not always planned.
"The data suggests that the purchase of major appliances is a key driver behind the remodeling decision," explains Peter Greene, president of NPD Group's NPD Houseworld division. "So, when a major appliance breaks unexpectedly, it may inspire a homeowner who's already thinking about replacing a worn-out kitchen to get started on that kitchen remodel."
"Remodel" means different things to different homeowners. Most kitchens that are remodeled are 12 years to 14 years old, and the project includes one or more major appliances. Remodelors spend from a $1,000 for a "clean-up" to $28,800 for a high-end remodel, although project costs can go much higher. On average, remodelors are age 44 and up, and those earning $60,000-$74,000 (22 percent of the study) were significantly more likely to plan for remodeling in the coming year.
Remodelors spent more than ever in 2004, with expenditures up
12.3 percent from the previous year, according to the National Association of Home Builders (NAHB). NAHB, reporting from U.S. Census Bureau figures, says Americans spent $198.6 billion on remodeling projects, up from $176.9, making it the largest increase in more than a decade, and NAHB's Remodelors Council(tm) forecast continued growth throughout 2005 to $209 billion, for an increase of 6.3 percent.
"Because of rising home prices, homeowners are more willing than ever to invest in their homes," said NAHB Chief Economist Dave Seiders. "We see this as a continuing trend for several years to come."
The senior housing market is transforming the way builders design and develop active-adult homes, according to NAHB's Seniors Housing Council, and that includes everything that goes into equipping the home.
"Boomers are buying lifestyle," said Chuck Covell, president of Greenbelt, Maryland, U.S.-based Bozzuto Homes. "Today's 50-plus buyers are more affluent and crave a sense of lifestyle when buying a new home."
Covell was speaking at Building for Boomers & Beyond: Seniors Housing Symposium 2005 in Chantilly, Virginia, U.S., where builders and architects met to discuss the demands and desires of this expanding homeowner base. Much of the focus was on the need for these high-end homes to be designed to fit individual lifestyles.
Attendees characterized these buyers as youthful and individualistic. Covell pointed out that baby boomers will continue working in some capacity, trading in a career for part-time work or a job that is more like a hobby. Such boomers will want their homes with fully equipped offices. These buyers also want luxurious master suites and baths, high-tech media rooms and, of course, high-end kitchens.
"Boomers love to socialize, and they want kitchens that are versatile enough for the gourmet chef and stylish enough for entertaining," said Mary DeWalt, MIRM, president of the DeWalt Design Group in Austin, Texas, U.S. "They also favor a design scheme that blends their 'old favorites' with new pieces."
Aging homeowners do not want to face the prospect of being forced, through circumstances, to leave their homes, and increasingly homes are designed to allow seniors to live comfortably, independently and safely for the long-term. NAHB and seniors' association AARP developed a Certified Aging-In-Place Specialist (CAPS) program. CAPS professionals are remodelors, general contractors, designers, architects, and health care professionals.
The design of a home amenable to aging-in-place includes placement and accessibility of appliances. AARP recommends side-by-side refrigerators, for example, which allow access to both the freezer and fresh food sections of the appliance, even from a wheelchair. Rollout shelves add even better access to items that can be hard to reach in the back of the fridge.
Dick Topping, director of Appliance Research, TIAX, LLC, and a regular contributor to our APPLIANCE Engineer section, explored the subject of evaluating consumers interaction with appliances in the November 2005 issue of APPLIANCE. His Open Door editorial, "Building A Supportive Home," described PlaceLab, a fully instrumented living space where volunteers interact with new technologies while their reactions and behaviors can be carefully observed.
Figuring out what constitutes an Accessible Kitchen has also been the focus of the Biomedical, Industrial and Human Factors Engineering department at the College of Engineering and Computer Science, Wright State University (WSU), Dayton, Ohio, U.S. Just glancing over their pros and cons of difference appliance features points to industry opportunities.
Take a component as basic as microwave oven controls. Dial controls are more accessible to the visually impaired, explains WSU, but require grasping and twisting motions, and may be more difficult for those with arthritis. How can a healthy senior be asked to guess in advance if either, or which, impairments might be a problem in the coming years? An appliance control that addresses both issues may have an advantage in this substantial market.
The polarized opinions on the near-term future of the housing market in the U.S. make it difficult to forecast this market. If there is a bubble, and it does burst, will the impact on the strong remodeling market be positive or negative? The baby boomer market is more long-term, and more of a sure thing. Both of these (sometimes overlapping) customer segments will continue buying high-value appliances.
What products or plans do you have in place to meet the specialized needs of special appliance buyers? Tell me all about it: firstname.lastname@example.org.