Hanging Around the Home1 Mar, 2009 By: Jacqueline Renfrow Response
The economy has created a thriving environment for DR marketers to advertise housewares that make life at home easier and more enjoyable.
The country is in a recession and all households are cutting back on travel and entertainment expenses. So what's left to do? Get comfy at home with some great products that make cooking, styling, sleeping, cleaning and entertaining a pleasure.
Vita-Mix has been benefiting from live demonstrations on television since 1949.
While the economy has taken its toll on housewares, there are still great opportunities for direct response marketing in this space because of the make-life-easier nature of these products. And beyond the everyday value of housewares, from a marketer's standpoint, the opportunities in DRTV remain wide open in 2009, due to lower media buying costs thanks to the pulling back of advertisers in other industries. It is time to strike while the iron — or oven, coffee pot, hair curler, etc. — is hot.
"For all the supposed disaster, sales are seeming to stay up. Response is not really suffering," says Doug Garnett, CEO of Portland, Ore.-based Atomic Direct and a member of the Response Editorial Advisory Board (EAB), about the DR housewares market.
The industry is cyclical: product lines come in and out of popularity and the DRTV scene. "They tend to swim on and off, stay around a bit, and then go away," says Garnett. What's back in vogue? Haircare goods, such as colorers, straighteners and curlers. Also, home heaters, mops and food storage products — all with a slant on saving money.
While some of the bigger marketers are looking at online communities, mobile and other emerging DR avenues, nothing yet can compete with TV's mass marketing appeal.
Aero Products Intl. Inc. attributes DRTV with helping it earn 40 percent of all sales in the air-bed category. Demonstrations of the AeroBed on television — and now online on YouTube - build value for the brand.
"There is no better brand builder or driver than DRTV," says Rob Medved, president of Burlington, Wis.-based Cannella Response TV and also a member of the Response EAB. "Relatively speaking to the amount of revenue that can be driven, the cost of entry can be decent. Once you've spent the money on production, you've either made it back or you haven't, but after the first airing you'll know if you have a hit."
Perhaps most importantly, retailers are interested in the products that have proven their worth on DRTV.
"The big box retailers have all embraced the format and actually encourage their companies and the product developers to do infomercials. That's why it continues to do so well. It's been that way for a few years," says Alex Dinsmoor, vice president, business development at Script to Screen, located in Santa Ana, Calif.
It is a great time for housewares manufacturers to invest in DRTV because media rates appear to have dropped dramatically. With pharmaceutical and auto companies advertising less, demand is lower, which yields lower rates for those marketing infomercials. "It's more cost effective than it has been in years," says Dinsmoor. "People are still faced with the challenges of everyday life and cooking for a family. And these are household solutions that are going to help people save money, provide value and provide solutions to everyday challenges."
What's missing from DRTV so far in 2009? Experts have noted a lack of cookware in the housewares category. "DRTV and housewares go together extremely well because demonstrations sell, but the brands aren't there right now that you'd expect in the cookware category. [There are] no pots and pans at all on TV now," observes Garnett.
He says cookware should be taking advantage of DRTV, especially to fight back at what is going on in retail. And while he notes that Web 2.0 and social networking are currently in vogue for advertisers, products will not make much headway without the support of television. "You can put demonstrations online, but TV is still magic for driving volume for people," he says.
Keurig is leveraging consumer excitement about coffee to engage them in blogger outreach activities and other online communities.
Rich Thompson, vice president of marketing, Graham Professional, and former director of marketing for the DuPont Teflon brand has spent years in the housewares industry and knows that the cyclical downturns in the economy cause consumers to evaluate and cut expenses outside the home. "Usually the decision-maker of the home, typically the wife, says, 'I need to upgrade my cookware,' or, 'I could really use that new Cuisinart,'" says Thompson. "Their tendency is to spend money on things that can help them save money, rather than going out."
But Thompson predicts a tough year ahead, as those in the industry look to steal existing business away from others rather than grow the industry.
One problem facing the housewares industry is the small margin under which many of these manufacturers work. With budget cuts and restraints put on by retailers, marketers have to weigh the benefits of building a campaign and gaining retailer and consumer trust while not breaking the bank.
"The squeeze they have been put under from major retailers has probably made them look inward for more cost-saving opportunities rather than growth," says Thompson. As a result, he has noticed there are fewer Internet marketing campaigns to drive consumers to housewares sites. He adds, "If they are doing these banner ads, they're doing low spends in a short amount of time; their frequency or lack thereof is not helping much. You can't dip your toe in the water and then say it doesn't work."