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issue: January 2009 APPLIANCE Magazine

Forecast: North America
Expanded Web Coverage: Electric Housewares: Weathering the Storm


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by Diane Ritchey, News Editor

Managing the historically strong electric housewares and floor care business during tough economic times is no doubt a challenge.

According to Peter Goldman of the NPD Group in a Housewares Marketwatch report, to counteract the problems caused by the housing market, housewares manufacturers are devising new strategies to get consumers into the stores, including sales promotions, rebates, and new product offerings. Some of those new product offerings in 2008 included Eureka’s envirovac vacuum, an eco-friendlier, full-sized upright that reduces energy consumption, and Bissell's Pet Hair Eraser Corded Hand Vacuum, specifically designed for pet owners.

The economic situation is forcing many consumers to stay home more, and that may bode well for housewares manufacturers, according to Mary M. Rodgers, director of marketing communications for Cuisinart and Waring. She told APPLIANCE, “The economic climate is leading to an increased consumer focus on home cooking and home entertaining. This creates an opportunity for kitchen appliance manufacturers that offer their consumer products and programs to help them maximize their home cooking experience. Cuisinart will continue to focus on products and marketing programs that offer consumers new ways to easily create a variety of dishes in the kitchen. The company’s newly expanded marketing program is designed to keep Cuisinart top of mind via e-mails that highlight product launches, video cooking contests, and new applications in the Cuisinart recipe widget. In addition to the web activities, Cuisinart will continue to support its products with national print and TV advertising, industry sponsorships and other related activities.”

Still, the NPD report said that sales of small appliances were already falling in the six months ending June 2008, with dollar and unit volume dropping by about 6% and 11%, respectively. Kitchen electrics were hardest hit (unit sales down 16%), followed by personal care (unit sales down 13%). Home environment was the least of the three to be impacted, with unit sales down by 5%.

However, said NPD, there were some bright exceptions. In kitchen electrics, for example, rice cookers was one category that grew, with unit volumes up 4% in the six months ending June 2008, compared to the same period one year ago. NPD said that the “trend toward wellness, global influences, and the appeal of versatile appliances has each likely contributed to the notable growth this category has been enjoying.”

Canister vacuums, said NPD, were among the bright spots for floor care, with unit sales up 6% in the six months ending June 2008. NPD said that although canister vacuums represent less than 10% of the total full-size vacuum market, “innovation in this category continues to change consumer perception of these products, once again making them an attractive option in floor care.”

Water filtration devices and air cleaners are two other categories that show promise in the coming years, according to research firm the Freedonia Group. The group said that demand for consumer water purification and air cleaning systems is projected to increase 4.4% per year to $1.5 billion by 2012, and that gains will be driven by consumer concerns about the quality of the air and water in the home, and greater awareness of the healthful and aesthetic benefits of the systems. The aftermarket also plays an important role in the industry, the group said, with sales of replacement filters and membranes forecast to grow 4.8% annually through 2012.

As consumers look for means to reduce the amount of chemicals and toxins they consume, water purification devices may be a growing category. According to Freedonia, water purification systems that feature conventional filtration media accounted for the majority of demand for water systems in 2007, with 61% of sales value. However, it said, faster growth will be registered by higher value reverse osmosis and distillation systems. These systems can process a broader range of contaminants compared to conventional filters.

Among air cleaners, conventional filtration systems accounted for the largest share of value demand with 47% in 2007, because they offer thorough air cleaning and minimal to no ozone production. However, the Group said, electrostatic air cleaners are projected to achieve slightly faster gains through 2012 because they offer improved efficiency, quieter functioning, and low operating costs. Many consumers have shifted away from ionic air cleaners and ozone generators out of concern regarding the amount of ozone— a lung irritant— the systems generate.

In 2007, water purification and air cleaning system demand was dominated by equipment intended for use in a limited area of the house. Point-of-use (POU) water purification systems, which are installed at a single outlet, had the larger share of demand for water systems in 2007. Similarly, portable air cleaners, which are designed to treat the air in a single room, accounted for the larger share of sales of air cleaners in 2007.

The Group said that both POU water purification systems and portable air cleaners are expected to post faster growth through 2012 compared to their whole-house counterparts.

In personal care, NPD said that women’s electric shavers, facial trimmers, and electric shaver replacement parts should also show growth, due to innovations and replacement cycles in the category.

One positive aspect that the housewares industry has going for it are efforts to cater to the “green” movement. Electric housewares are certainly leading the way and catering to consumer’s desire to purchase a kitchen electric that has sustainability and end of life use. For example, according to a Trend Watch article by the International Housewares Association (IHA), the dominant theme at last year’s International Home & Housewares Show was “green”—whether in products on display or as topics in Show seminars and Housewares Design Theater presentations.

According to the article, product designer Mark Dziersk, who spoke at the 2008 Show, describes the changing product development process as moving from “a three-legged to a four-legged stool” that includes sustainability as well as what “works well, looks good, and costs little.” He added that consumers will indeed pay more for a product that includes an authentic element of sustainability.

During a show seminar, “In the Green: Connecting With Environmentally Conscious Consumers,” Jennifer Ganshirt of Frank About Women, noted that while “green is hot, very today and truly everywhere,” the trend is more about marketing and less about true lifestyle integration at this point. The article said that her company’s recent survey of more than 1,000 female consumers found that purchasing “green” makes a difference to women, but they want the green products they buy to also have a reasonable price and good quality. “For retailers, that means embracing green wholeheartedly because savvy consumers know the difference between hype and an innovative, sustainable product that fits their budgets,” the article noted.

According to the article, housewares industry consultant Suzanne Shelton told her Housewares Design Theater audience at the Show that housewares companies should “seize an opportunity” now to connect with green consumers through bold advertising, creative strategies, branding and all their marketing communications in order to differentiate their products and respond to perceptions, skepticism, and prices sensitivities.

Read our greatly expanded online coverage: North America Appliance Industry Forecasts for 2009:

 

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