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Marketwatch_winter:Marketwatch
1/9/09
3:42 PM
Page 1
Winter 2008
Striking a Balance in an Unbalanced Market
By Peter Goldman, The NPD Group, Inc.
n a challenging economy it’s no surprise that consumer behavior shifts.
Beyond that, preferences and priorities seem to shift as well. When consumers
are challenged with making decisions
between what they want and what they need,
the lines may begin to blur as the impulsive,
extravagant purchases lose their luster and
those that serve a necessary purpose take
priority.
I
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 store, specialty store and drug
store (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
www.npd.com.See the Data and
Methodology section on page 8 for an
explanation of how the data is compiled.
As of October 2008,
92 percent of consumers
surveyed by The NPD
Group thought the U.S.
economy was in or headed
for bad economic times.
This was a nine-point
increase over September.
About half of respondents
indicated they planned to
spend less on items like
appliances, home textiles
and home improvement in
the coming months.
Apparel and footwear,
necessities for all consumers, appear to be holding on to customers who
plan to spend the same
amount of money on
these items as they have in
the past.
With the unemployment rate hitting
6.5 percent in October, 1.7 percentage
points above what it was the same time a
year ago, 72 percent of consumers told us
they were somewhat or very concerned for
the security of their job/income. This
demonstrates the recognition of a personal
reality, an uneasiness that goes beyond just
acknowledging a challenging economy.
The increased concern over personal
employment will likely tighten belts even
further during the critical holiday period.
Coupons, Price Affect Purchases
The survey also told us women are
significantly more likely to take advantage
of coupons to save money, while men are
more likely not to do anything different.
However, men expressed more of an
interest in discount/membership programs
than women. Consumers under retirement
age were more likely than their older counterparts to take advantage of some kind
of money-saving promotional event
or program.
Across small appliances price has long
been one of the most important reasons
for purchase. This has become even more
evident in recent months. In the three
months ending August 2008, for the first
time in three years, NPD’s Consumer
Tracking Service showed price outpacing
continued on page 6
1/9/09
3:42 PM
Page 2
Small Appliances: KITCHEN ELECTRICS
MARKET SIZE
DEMOGRAPHIC ANALYSIS
QUARTER THREE • 2008
UNIT VOLUME IN THOUSANDS
T
M AO TA
RK L
ET
Unit Volume Share
6 months ending — September 2008
14.7 %
7,915
15.7 %
16.2 %
17.1 %
15.9 %
CENSUS (PERCENT
OF POPULATION)
11.3 %
15
SLOW COOKERS
18.6 %
11,970
15.3 %
10,000
20
14.1 %
C
EL OOK
EC IN
TR G
IC
S
15,000
SLOW COOKERS • REGION
Percentage purchased in region versus census
11.4 %
19,885
F
BE OOD
VE P
RA RE
GE P/
20,000
COFFEE
GRINDERS
■
Blade-type coffee grinders
represented 76% of dollar sales
for the category in Q3’08.
5
3.5 %
6.6 %
7.8 %
6.1 %
6.0 %
0
Source: Consumer Tracking Service
4.9 %
8.0 %
10
6.8 %
5,000
0
New
England
Middle
Atlantic
East North West North
Central
Central
South
Atlantic
East South West South Mountain
Central
Central
Pacific
WAFFLE IRONS • AGE OF BUYER
Percentage purchased by age of buyer versus census
Source: Retail Tracking Service
ESPRESSO/CAPPUCCINO
MAKERS
■
Almost 8% of espresso/
cappuccino makers sold
in Q3’08 were 1 cup/
single serve models
Source: The NPD Group
5
0
14.7 %
19.7 %
11.7 %
3.3 %
10
9.1 %
9.0 %
16.1 %
17.2 %
11.7 %
17.8 %
15
18.9 %
68% of sandwich makers
sold in Q3’08 had a
cool touch feature.
■
CENSUS (PERCENT OF POPULATION)
16.1 %
20
16.8 %
SANDWICH MAKERS
17.8 %
WAFFLE IRONS
13-17 years
18-24 years
25-34 years
2
35-44 years
45-54 years
55-64 years
65+ years
1/9/09
3:42 PM
Page 3
Small Appliances: PERSONAL CARE
MARKET SIZE
18.3 %
6.6 %
8.0 %
6.0 %
6.8 %
5.7 %
4.9 %
6.3 %
10
15.7 %
18.6 %
18.1 %
15.9 %
10000
0
11.3 %
24,102
CENSUS (PERCENT
OF POPULATION)
9.2 %
21,459
15
MASSAGING
APPLIANCES
9.9 %
20000
20
12.1 %
30000
MASSAGING APPLIANCES • REGION
Percentage purchased in region versus census
14.1 %
45,561
Unit Volume Share
12.3 %
40000
H
GR AIR
OO CA
MI RE
NG /
O
PE RAL
RS C
ON AR
AL E &
CA OT
RE HE
R
50000
T
M AO TA
RK L
ET
5
HAIR SETTERS
0
New
England
East South West South Mountain
Central
Central
Pacific
8.2 %
9.0 %
8.4 %
11.9 %
45-54 years
11.7 %
35-44 years
14.7 %
17.2 %
16.2 %
15
18.9 %
20
15.8 %
25
10
MEN’S ELECTRICAL SHAVERS
16.8 %
A quarter of hair dryers
sold in Q3’08 used
ceramic technology,
and almost 70% used
ionic technology.
South
Atlantic
MEN’S ELECTRICAL SHAVERS • AGE OF BUYER
Percentage purchased by age of buyer versus census
15.7 %
■
East North West North
Central
Central
HAIR DRYERS
Middle
Atlantic
23.7 %
Hair setters with 20
rollers accounted for
half of the unit sales
in Q3’08.
11.7 %
■
MEN’S TRIMMERS
■
7% of men’s trimmers
sold in Q3’08 were
body groomers.
5
0
13-17 years
18-24 years
25-34 years
55-64 years
3
65+ years
1/9/09
3:43 PM
Page 4
Small Appliances: HOME ENVIRONMENT
( E X C L U D I N G VA C S )
MARKET SIZE
T
M AO TA
RK L
ET
25000
Unit Volume Share
AIR PURIFIERS • BUYER GENDER
Percentage purchased by buyer gender versus census
24,331
20000
60
AIR PURIFIERS
15000
50
54.6 %
51.1 %
48.9 %
45.4 %
10000
40
5000
30
0
20
10
0
Male
Female
AIR PURIFIERS • INCOME
Percentage purchased by income versus census
20
13.2 %
15.0 %
11.5 %
9.9 %
13.7 %
12.1 %
16.1 %
11.3 %
6.5 %
6.7 %
10
13.1 %
16.6 %
17.8 %
15
11.1 %
30% of heaters
sold in Q3’08
used ceramic
heat technology.
7.8 %
■
17.6 %
AIR PURIFIERS
HEATERS
5
0
Under
$15,000
$15,000 –
29,999
$30,000 –
44,999
4
$45,000 –
59,999
$60,000 –
74,999
$75,000 –
99,999
$100,000 – $150,000 +
149,999
1/9/09
3:43 PM
Page 5
Small Appliances: FLOOR CARE
MARKET SIZE
T
M AO TA
RK L
ET
Unit Volume Share
10000
CANISTER VACUUMS • BUYER GENDER
Percentage purchased by buyer gender versus census
9,133
8000
60
6000
CANISTER VACUUMS
50
4000
30
0
20
51.1 %
48.9 %
43.4 %
40
2000
56.6 %
10
0
Male
Female
CANISTER VACUUMS • HOUSEHOLD SIZE
Percentage purchased by household size versus census
10.3 %
15
13.9 %
20
21.4 %
20.1 %
25
15.9 %
30
12.9 %
CANISTER VACUUMS
22.6 %
35
19.3 %
Cyclonic hand
vacuums now
represent less than
half of units sold,
46% as of Q3’08,
compared to 53%
in Q3’07.
■
26.3 %
40
37.1 %
HAND VACUUMS
10
5
0
Single Member
Two Members
Three Members
Four Members
Five or More Members
5
1/9/09
3:43 PM
Page 6
Housewares: NON-ELECTRIC
MARKET SIZE
DINNERWARE
10,430
BEVERAGEWARE
COOKWARE
10000
CUTLERY
6,262
4000
1,713
6000
3,373
FLATWARE
4,080
8000
BAKEWARE
2,090
12000
2000
0
COOKWARE
■
18% of cookware
dollars came from fry
pans/skillets in Q3’08.
FLATWARE
■
Casual flatware
accounted for 58% of
dollar sales in Q3’08.
BAKEWARE
■
Glass bakeware
represented 18% of
dollar sales in Q3’08.
Housewares: Weathering Through the Economic Storm
Continued from page 1
features as consumers’ most
important purchase factor.
When considering the various segments within the
small appliance industry, features and price are consistently the top two reasons
for purchase.
Kitchen electrics follows a
similar pattern to the industry in total with price outpacing features. Home environment appliances have been
consistently driven by price
over the last year – more so
than any other segment.
Personal care appliances continue to be a feature-driven
business, with features still
outweighing price.
For kitchen categories
consumers perceive to be
necessities, make a task easier,
or can be used in more than
one way, features still trump
price. Some examples are drip coffeemakers, stand mixers, food processors, toaster
ovens and slow cookers.
“Green” Loses its Cache
With regard to price and its impact
on decision-making, environmentallyfriendly or “green” products are a strong
and timely example. At a time when many
consumers are concerned about the environment but also concerned with the economy, the decision to buy a product because
it is “green” may not have the cache it did
just six months ago. Given difficult choices, the consumer may have to sacrifice environmental benefits and good “green”
intentions in lieu of financial constraints.
Consumers weighed in on this point
in NPD’s recent Green 2008: Consumer
6
Attitudes and Behaviors report. When
asked about green home products, consumers offered this type of feedback:
“Make it more environmentally-friendly
while keeping the cost down” and
“Especially in today’s economy, I cannot
afford to spend a lot more to be ecofriendly.” While this economic landscape
seems to be opportunistic for CFL light
bulbs, a clear cost-cutting opportunity,
it will be interesting to see whether
energy- and water-efficient, front-loading
washing machines and steam dryers can
sustain their remarkable growth.
Products with tangible benefits are
the ones that have endured the test of time
– and it’s likely they’ll withstand the adversities of today’s economy, too. Fads have
come and gone many times over, but items
1/9/09
3:43 PM
with features based in functionality remain.
NPD tracks sales of various specialty
kitchen electric categories such as electric
kettles, popcorn makers, pizza ovens and
chocolate fountains. By definition these
products are specialized, often times to
just a single use, which makes this an interesting category to watch during challenging economic times when consumers want
to get the most for their money.
Specialty Products Show Growth
The specialty kitchen categories that
exhibited double-digit growth this past year
(12 months ending August 2008 vs. prior
12 months) are jar openers, popcorn makers, tea makers and electric kettles. All four
of these categories perform a specific task
in an efficient manner for the consumer.
With the exception of popcorn makers,
these specialty products may be used daily
to enhance the quality of our everyday
lives, particularly in this environment of
increased “cocooning” and “stay-cations.”
Page 7
The growth of jar openers, though
still a relatively small category, is noteworthy at 75 percent. This is a product that
fills a need, perhaps making an everyday
task easier for the large number of aging
baby boomers in the U.S.
Regarding tea makers, according to
NPD’s National Eating Trends, per capita
or per person consumption of tea in the
home has been steadily increasing over
the past five years (12 months ending May
2008). Between the health benefits being
promoted and the cost of buying a cup of
tea at a local café, it’s no surprise that tea
makers and electric kettles are demonstrating significant growth.
When it comes to appliances, and
specifically small appliances, consumer
purchase behavior in terms of the types
of items they are buying has not changed
dramatically in the most recent six months
of this economic downturn. Consumers
are spending more time at home and they
are selectively continuing to spend money
7
on the items that they feel will make that
time more enjoyable.
At the same time, consumers are wary
of making changes and heading in new
directions, as demonstrated by the caution
expressed over environmentally-friendly
products and the investment necessary for
many of these categories. In the headier
days of 2005 to mid-2007, consumers
migrated up the price spectrum and premium products sold very well. The higherincome consumers who drive the premium
price segments are not making changes yet.
However, those consumers who were trading up to make aspirational purchases in
recent years are now facing the question
of whether “good” is “good enough.”
They’re realizing that in this economy,
it’s all about striking that delicate balance
between wants and needs.
Peter Goldman is president of the Home
Section at The NPD Group. These are the opinions
of Goldman and NPD. For more information,
contact Goldman at 516-625-6136.
1/9/09
3:43 PM
Page 8
DATA AND
METHODOLOGY
NPD has a standard data model that is used
for all categories, although it is modified to
suit the needs or characteristics of each. The
standard model incorporates both consumer
and point-of-sale (POS) databases. These two
data sources are highly complementary and
are used to support one another-each making
the other stronger.
Point-of-Sale (POS) databases are assembled from retailers' records of actual sales by
product as collected at the cash register.
These databases are highly reliable and provide census counts of sales by product and
price for participating retailers. Not all retailers participate, however, so informed estimates are made for product sales in non-participating retailers in a process called "projection" or "POS projection." The completed
sales data are valuable to clients trying to
understand which products or items are selling well and which are not, at which prices
and in which channels. The finished POS data
describe the product, retail channel and price.
They do not, however, address the buyer of
the product.
Consumer databases are developed using
product purchase surveys completed by a
large-scale rotating sample of consumers.
These data also produce estimates of sales by
product and retail channel, as does a POS
database. More importantly, however, the
consumer surveys capture information about
each purchase not available in the POS databases, buyer demographics, the product's
intended use and a variety of other characteristics. These facts help clients understand why
products are selling well or poorly and help
them better understand consumers' motivations. One additional advantage to the consumer surveys is that there are no "missing
retailers" from the database since the information is gathered from panelists directly and no
retailer cooperation is required.
CONSUMER METHODOLOGY
Most consumer data in the U.S. are gathered from periodic samples of individuals who
are asked about their recent purchases.
Respondents report certain details about the
type and nature of their purchases in a survey
administered via the Web. The responding
sample is demographically weighted and projected through a series of steps to represent
the Total Adult (18+) and Total Teen (13-17)
U.S. population.
Each week, over 145,000 individuals are
selected from the NPD online consumer
panel to participate in one of three weekly
studies. The NPD online consumer panel is
composed 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 cooperators.
Most survey work is completed via the
Internet. Internet users are known to have
certain demographic and behavioral biases not
found in the total population, though these
are rapidly diminishing over time. A process
of sample selection and respondent weighting
is used to control demographics, however,
reducing some of the biases in the sample.
Extensive research has shown that by effectively weighting the sample, the Internet
yields superior data quality (coverage) than do
offline methodologies.
ABOUT THE
NPD GROUP, INC.
The NPD Group, Inc. (NPD) is a global market information company that
measures product movement and consumer behavior across a broad range
of industries -- apparel, automotive
products, consumer electronics, cosmetics and fragrances, food, foodservice,
footwear, housewares, information technology, interactive entertainment, toys
and music. NPD's clients, many in the
Fortune 500, use this insight to uncover
market opportunities, strengthen channel relationships and benchmark industry performance. Since 1967, NPD has
introduced numerous industry firsts,
most recently combining and calibrating
information from consumer panels and
point-of-sale tracking via its flagship
services, the NPD Worlds. The firm has
offices and affiliations in 60 countries.
For more information on The NPD
Group, visit www.npd.com.
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.
Data are not available from all retailers,
however. The available data are projected to
cover the missing (non-cooperating) retailers
within each channel in most of NPD's categories. In certain circumstances, brand share
weights are applied as well to compensate for
missing retailers with a different brand mix,
to more accurately reflect the marketplace.
Those adjustments are generally guided by
inputs from either consumer panel data or
actual in-store audits.
8
Deborah A. Teschke, Senior Editor
Peter Goldman, Contributing Editor
Janine Marshall-Bolton, Contributing Editor
Tom Goodman, Design
Published by IHA
For more information, contact
Debbie Teschke at 847-692-0110; or
[email protected]
6400 SHAFER COURT, STE. 650
ROSEMONT, IL 60018 USA
TEL: 847-292-4200 FAX: 847-292-4211
www.housewares.org
092408B/2100

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