That's the consensus among top executives at International
Housewares Association (IHA) member companies, but 2004 economic forecasts
diverge. "Cautious optimism" is the mood expressed often, but individual
forecasts range from "double-digit sales gains" to "a tough, slow-growth
year."
For small appliance producers, the first two-thirds of 2003 was "slow" or "stable," but
strong holiday sales are expected to boost year-end results. In all fairness,
2003 sales growth was being measured against what IHA's 2003 State of
the Industry Report shows as a strong 2002, in which IHA members reported
15.2-percent sales gains on average. |
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As for 2004, there are a number of questions: Will strong
2003 holiday sales lead consumers to tighten purse strings during the
first two quarters of 2004? Will the usual focus on the economy during
an election year dampen consumers' urge to spend?
Linda Graebner, president/CEO of Tilia, Inc., observes that, "We have
this elusive recovery, but we're not there yet. I am getting a sense
from our customers that they're optimistic about a good holiday season,
and I think people are cautiously optimistic that we're moving out of
the recession into a better economy."
Continued consumer interest in at-home entertaining and purchasing
up-to-date household products is encouraging to Ms. Graebner. And, unless
interest rates jump, the pace of home buying, remodeling, and refurbishing
will continue to stimulate sales of household goods.
Industry Challenges
The sales outlook is more difficult for companies producing mature
products and/or lower-priced "commodity" lines, which are affected by
mass-merchant-driven reverse auctions. To counter that trend, Matthew
L. Andis, president of the Andis Company, thinks the big challenge and
opportunity going forward will be to establish and build a company's
brand with those same merchandisers.
"The disappearing middle" - the disappearance of mid-priced product
lines - also impacts housewares retailers and suppliers.
"In general, there are only two ways the market will go forward," says
David Sabin, chairman of Salton, Inc. "Either you're going to be in the
commodity, opening price-point business, which will be driven by who's
the most efficient at cost, or you're going to have to uptrend with the
best item, the best features, the best customer-recognized brand - which
allows both vendor and retailer to maximize dollars per square foot."
Mark Bissell, president and CEO of Bissell, tells about retail rebounding
at lower price-point levels, but he also sees a lot of higher-priced
introductions from names like Dyson and Electrolux. "Retailers and manufacturers
realize that chasing the dollar down is not the way to keep our businesses
viable," Mr. Bissell says. "Price points have actually moved up some.
The challenge is to differentiate your company, to offer a value-added
product."
Innovation/Technology
Innovation and technology are differentiating products for personal
care electrics manufacturer Andis, which is winding up a strong 2003
and anticipating double-digit sales gains in 2004.
"We're taking new technologies - including digital readouts, ceramics,
built-in shock protection - that have been successful in our professional
lines and applying them to retail in products such as hair dryers, curling
irons, flattening irons, and hair clippers," says Mr. Andis. "This will
help move price points upward and increase the brand's value to retailers.
It's not easy for consumers to accept higher prices, but as they understand
the technology, they will pay for it."
The outlook for 2004 will be bright for manufacturers that continue
to innovate. We look forward to sharing the results of their continuing
creativity at the 2004 International Home & Housewares Show, March 20-22,
at McCormick Place, Chicago, IL, U.S. |
