Summer 2009 The Importance of a Brand - International Housewares

continued on page 7

Branding, one of the bench-marks of marketing, helps in gen-erating awareness and recognition,with the goal of building loyaltyamong your customer base. In thesmall appliance categories, con-sumers rank brand as the thirdmost important reason for makinga purchase – showing the weight abrand name can hold and the valuebrand marketing can add. In thenon-electric housewares categories,where brand is not as crucial topurchase decisions, 45 percent ofall housewares dollar sales betweenAugust 2008 and April 2009 camefrom brands that the consumerssurveyed could not recall (“notspecified”). That amounts to $2.9billion in sales occurring withoutany brand recognition in a span ofnine months.

Top Reasons for BrandPurchases

What role does brand play inthe housewares market? How doesthis multi-billion dollar industrysustain itself with almost half of itssales coming from brands that areessentially question marks in consumers’minds? Other basics still rule in housewares:functionality, design and cost are the mostimportant elements for these categories.Consumers have told NPD their top reasonsfor purchasing a housewares product areprice, good value, appearance, onsale/promotion and easy to clean. Theseproducts are truly focused on meeting con-sumers’ needs and appealing to them visually.

It really isn’t a surprise that when itcomes to cooking or preparation productssuch as pans, bakeware or knives, cost andfunctionality are key consideration drivers.Among tabletop items such as glasses,dinnerware and flatware, appearance plays alarger role, along with cost. These samethings are important for purchases of “notspecified” or unknown brands, showing

About Housewares MarketWatchHousewares MarketWatch reports

both point-of-sale (POS) and consumerdata from NPD databases. The quarterlydata covers various product categorieswithin the divisions of Small Appliancesand Non-electric Housewares.

The information contained on the following pages is offered as a snapshotof a category’s performance, both fromthe retailer (POS) and consumer perspectives. The POS data covers theretail channels of mass/national chains,department store, specialty store and drugstore (personal care and homeenvironment only). Each issue ofHousewares MarketWatch will featureseveral categories from the SmallAppliances and Housewares divisions.

Complete data on a category can bepurchased by visiting NPD’s website atwww.npd.com.See the Data andMethodology section on page 8 for anexplanation of how the data is compiled.

The housewares market is home to manywell-known brands; and more than a fewquickly come to mind when thinking of

categories from cookware and bakeware to cutleryand tabletop. However, brand is rarely the firstthing that comes to mind when making a house-wares purchase. In fact, The NPD Group’s newConsumer Tracking Service for the housewaresmarket ranks brand ninth among consumers’ topreasons for purchase.

Consumers have told NPD their topreasons for purchasing ahousewares product are price,good value, appearance, onsale/promotion and easy to clean.

The Importance of a BrandBy Peter Goldman, The NPD Group, Inc.

Summer 2009

NewEngland

ELECTRIC CANOPENERS

CENSUS (PERCENT OF POPULATION)

ESPRESSO/CAPPUCCINO MAKERS


ELECTRIC CAN OPENERS • AGE OF BUYERPercentage purchased by age of buyer versus census

0

5

10

15

20

25

Source: Consumer Tracking Service

ESPRESSO/CAPPUCCINO MAKERS • REGIONPercentage purchased in region versus census

0

5

10

15

20

25


2.4

%

9.0

%

16.6

%

4.9

%

1.5

%

14.1

% 16

.6 %

4.7

%

6.8

%

22.5

%

18.6

%

20.4

%

13.9

% 16

.8 %

11.7

%

4.9

%

20.5

%

18.9

%

20.3

%

11.7

%17.2

%

17.6

%

14.7

%

15.9

%

2Source: The NPD Group

Small Appliances: KITCHEN ELECTRICS

MARKET SIZEQUARTER ONE • 2009UNIT VOLUME IN THOUSANDS

0

5000

10000

15000

20000

25000

TOTA

LMARKE

T

COOKI

NGEL

ECTR

ICS FOOD P

REP/

BEVER

AGE


21,665

9,063

12,602

19% of toastersales came fromlong-slot models inQ1’09, up fromonly 8% in Q1’08.

TOASTERS

In the first quarter of2009, blenders with plasticcontainers brought in only25% of dollar sales forthe category, down from30% last year.

BLENDERS

In Q1’09, stand mixersrepresented 75% ofdollar sales of allmixers, down from78% in Q1’08.

STAND MIXERS

13 – 17 years

18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

3.1

%

6.0

%

12.5

%

11.3

%

8.2

%

6.6

%

14.5

%

15.7

%

DEMOGRAPHIC ANALYSISUnit Volume Share

6 months ending — March 2009

Source: Retail Tracking Service



3 Source: The NPD Group

Small Appliances: PERSONAL CARE

MARKET SIZEQUARTER 0NE • 2009UNIT VOLUME IN THOUSANDS

0

10000

20000

30000

40000

50000

TOTA

LMARKE

T

HAIR C

ARE/

GROOMING

ORAL CARE &

OTHER

PER

SONAL

CARE


42,616

19,90422,712

Pulsating showerheadsaccounted for half of thecategory dollars in the threemonths ending March 2009.

SHOWERHEADS

Manicure/Pedicure beautyservice items gained 7share points, nowaccounting for 17% ofpersonal wellness categorydollars in Q1’09.

PERSONAL WELLNESS

Rechargeable oral careappliances gained someshare in Q1’09, now 16% ofunit sales, up from almost15% the same time last year.

ORAL CAREAPPLIANCES

IRONS


HAIRDRYERS • REGIONPercentage purchased in region versus census



0

5

10

15

20

25


IRONS • BUYER GENDERPercentage purchased by buyer gender versus census

0

10

20

30

40

50

60

70


4.9

%

4.0

%

38.6

%

11.3

%

6.2

%

6.6

%

14.2

%

15.7

%

61.4

%

48.9

%

51.1

%

21.0

%

18.6

%

14.5

%

15.9

%

6.6

%

6.8

%

14.1

%

14.2

%

7.3

%

6.0

%

11.8

%

HAIRDRYERS


NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific




Male Female

WATER FILTRATION DEVICES


WATER FILTRATION DEVICES • REGIONPercentage purchased in region versus census

0

5

10

15

20


WATER FILTRATION DEVICES • BUYER GENDERPercentage purchased by buyer gender versus census

0

10

20

30

40

50

60


5.9

%

4.9

% 6.0

%

11.9

%

11.3

%

51.1

%

53.8

%

48.9

%

46.2

%

19.2

%

6.8

%

18.6

%

5.8

%

15.9

%

14.8

%

14.1

%

10.3

%

8.9

%

WATER FILTRATION DEVICES


Source: The NPD Group


4

Small Appliances: HOME ENVIRONMENT(EXCLUDING VACS)

0

5000

10000

15000

20000

TOTA

LMARKE

T


16,730

Single packs ofreplacement filters lostshare to multi-packoptions, though they stillrepresent 57% of unitsales in Q1’09.

WATER FILTRATIONREPLACEMENT

FILTERS

NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

10.0

%

6.6

%

13.1

% 15

.7 %



Male Female


Source: The NPD Group5

Small Appliances: FLOOR CARE


0

2000

4000

6000

8000

10000


TOTA

LMARKE

T

8,053

Fixed stick modelsnow account for thelargest share of thecategory, at 49% ofunits in Q1’09, with2-in-1 conversionmodels at 36%.

STICK VACUUMS

Single Member

Two Members

Three Members

Four Members

Five or More Members

UPRIGHT VACUUMS


UPRIGHT VACUUMS • AGE OF BUYERPercentage purchased by age of buyer versus census



0

5

10

15

20

25

30


UPRIGHT VACUUMS • HOUSEHOLD SIZEPercentage purchased by household size versus census

0

5

10

15

20

25

30

35


10.3

%

13.6

% 16.4

%

21.4

%

32.5

%

26.3

%

18.2

%

19.3

%

19.3

% 22.6

%

UPRIGHT VACUUMS


13 – 17 years

18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

0.7

%

9.0

%

7.7

%

11.7

%

22.0

%

16.8

% 19.3

%

18.9

%

25.9

%

17.2

%

15.9

%

11.7

%

8.5

%

14.7

%


Open stock flatwaresales increased by 26%in Q1’09, compared todollar sales the sametime last year.

FLATWARE

Dollar sales of pressurecookers grew by 22%in Q1’09, compared toQ1’08

COOKWARE

Source: The NPD Group

Housewares: NON-ELECTRIC


6

0

2000

4000

6000

8000

10000


8,86

2

4,77

4

1,75

0

1,54

0

DINNERWARE

BEVERAGEWARE

COOKWARE

BAKEWARE

FLATWARE

CUTLERY

3,58

1

3,22

0

In the six months endingMarch 2009, the #1 reasonfor purchase of a bakewareproduct is price, followed bygood value and easy to clean.

OVEN OR MICROWAVEBAKEWARE

BEVERAGEWARE


DINNERWARE • HEAD OF HOUSEHOLD AGEPercentage purchased by age of head of household versus census



0

5

10

15

20

25


BEVERAGEWARE • HEAD OF HOUSEHOLD GENDERPercentage purchased by gender of head of household versus census

0

20

40

60

80

00

17.9

%

51.1

%

48.9

%

82.1

%

DINNERWARE


18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

6.4

%

11.7

%

17.5

%

16.8

% 22.7

%

18.9

%

21.7

%

17.2

% 18.6

%

11.7

% 13.1

% 14.7

%


Male Female




surprising similarities in reasons for purchasecompared to the industry as a whole.

Could there be an opportunity to buildon consumers’ practical and emotionalresponses by affiliating those key character-istics with a brand? When asked if the state-ment “willing to spend more on brands”described them, 59 percent of consumerssaid it did. On average, consumers spent $4more on housewares purchases where theyknew the brand than they did on theunknown brand purchases. Those brandedpurchases represent more than half of thedollar sales in the market – $3.6 billion overnine months.

Brand Effect is MixedWhether for a set of pots and pans or a

fine china placesetting, brand didn’t makeit to the top five reasons for any of thehousewares categories NPD tracks.However, many brands that were recog-

nized and ranked tops in terms of salesalso, logically saw brand as one of the topfive reasons for purchase. This is particu-larly evident in the cookware, bakeware,dinnerware and cutlery categories. It isimportant to note that approximately 40percent of consumers surveyed said theywould definitely purchase the same brandagain in these categories; when looking atthe top brands, that number increases to65 percent.

While the data are clearly mixed, pur-chases influenced by brand have a fewthings going in their favor — the likelihoodof repeat purchases, consumers’ willingnessto spend more and, with nine months ofdata collected, greater than 50 percent ofsales. In addition, we’ve already seen a num-ber of brand and line extensions comeabout as a result of “casualization” and achanging economic climate. These exten-sions bring new competition from more for-

mal brands, established brands and thosesuccessful in other categories and industries.

Traditional thinking tells us brand loyaltyleads to repeat purchases, but the house-wares industry may be different, respondingto a different set of stimuli. The importanceof brand in this marketplace is still in ques-tion, split almost down the middle based onsales figures for the August 2008 to April2009 period. With this unique balance andthe changes occurring around us, thehousewares industry should pay close atten-tion to its consumers and their preferences,in an effort to better understand the impor-tance of brand as an influence on the con-sumer’s decision-making process.

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.

7 Source: The NPD Group

The Importance of a BrandContinued from page 1

8Source: The NPD Group

ABOUT THE NPD GROUP, INC.

The NPD Group, Inc. (NPD) is a glob-al market information company thatmeasures product movement and con-sumer behavior across a broad rangeof industries -- apparel, automotiveproducts, consumer electronics, cosmet-ics and fragrances, food, foodservice,footwear, housewares, information tech-nology, interactive entertainment, toysand music. NPD's clients, many in theFortune 500, use this insight to uncovermarket opportunities, strengthen chan-nel relationships and benchmark indus-try performance. Since 1967, NPD hasintroduced numerous industry firsts,most recently combining and calibratinginformation from consumer panels andpoint-of-sale tracking via its flagshipservices, the NPD Worlds. The firm hasoffices and affiliations in 60 countries.For more information on The NPDGroup, visit www.npd.com.

DATA AND METHODOLOGYNPD has a standard data model that is used

for all categories that incorporates both con-sumer and point-of-sale (POS) databases.These two data sources are highly comple-mentary and are used to support one another.

Point-of-Sale (POS) databases are assem-bled from retailers' records of actual sales byproduct as collected at the cash register.These databases are highly reliable and pro-vide census counts of sales by product andprice for participating retailers. The complet-ed sales data are valuable to clients trying tounderstand which products or items are sell-ing well and which are not, at which pricesand in which channels. The finished POSdata describe the product, retail channel andprice. They do not, however, address thebuyer of the product.

Consumer databases are developed usingproduct purchase surveys completed by alarge-scale rotating sample of consumers.

These data also produce estimates of sales byproduct and retail channel. More importantly,the consumer surveys capture informationabout each purchase, such as buyer demo-graphics, the product's intended use and avariety of other characteristics. These factshelp clients understand why products are sell-ing and consumers' motivations.

CONSUMER METHODOLOGYMost consumer data in the U.S. are gath-

ered from periodic samples of individuals whoare asked about their recent purchases.Respondents report certain details about thetype and nature of their purchases in a surveyadministered via the Web. The respondingsample is demographically weighted and pro-jected through a series of steps to representthe Total Adult (18+) and, for appliances,Total Teen (13-17) U.S. population.

Each week, over 35,000 individuals areselected from the NPD online consumer panel

to participate in the appliancestudy. Each month, over 30,000U.S. households are selected forthe housewares study.

The NPD online consumerpanel is composed of pre-recruited individuals who haveagreed to participate in NPDonline surveys and have com-pleted a comprehensive demo-graphic questionnaire. The useof an established online panelassures good cooperation levelsand predictable demographicbalance among cooperators.

POS METHODOLOGYNPD collects point-of-sale

retailer data from selected retail-ers. These data are the actualsales for the chain on an SKU-by-SKU basis. The data arecombined with data from otherretailers to produce reports oncertain categories by channel,where a sufficient number ofretailers are cooperating andwhere sufficient market demandexists for the database.

Deborah A. Teschke, Senior EditorPeter Goldman, Contributing EditorJanine Marshall-Bolton, Contributing EditorTom Goodman, DesignPublished by IHA

For more information, contact Debbie Teschke at 847-692-0110; [email protected]

6400 SHAFER COURT, STE. 650ROSEMONT, IL 60018 USATEL: 847-292-4200 FAX: 847-292-4211www.housewares.org

Summer 2009 The Importance of a Brand - International Housewares

Documents

Transcript of Summer 2009 The Importance of a Brand - International Housewares