Housewares/Hardware Markets: ’Wares in Demand … Everywhere

StoreBound introduced the Sobro coffee table, priced at $1,499, in 2017 on its crowdfunding platform.

Just what people are and aren’t willing to pay for never ceases to amaze Evan Dash, CEO of New York-based StoreBound, a product innovation company that helps inventors develop and distribute products to retailers. The wavering is especially relevant in the housewares category, where figuring out just how much money a consumer will shell out for a particular product can be a crapshoot.

“One of the frustrations in housewares is that consumers will go out to dinner a few nights a week and think nothing about signing a $100 tab,” says Dash, a longtime International Housewares Association (IHA) board member. “But when it comes to buying a coffee maker, they’ll agonize over a $29.99 model versus a $39.99 model.”

The problem, says Dash, is that there simply isn’t enough “feature and aspiration” built into the typical housewares product. “We’ve found that when we nail the product, and if it’s something consumers really want, and it creates a unique experience for them,” says Dash, “the price point falls pretty far down on their list of considerations.”

The Instant Pot enjoyed massive success on Amazon in 2017,
both as part of the e-retailer’s Prime Day event and during
the holiday season.

That’s exactly what happened when StoreBound introduced the $1,499 Sobro coffee table last year. Categorized as “lifestyle furniture,” Sobro comes with a built-in refrigerator, Bluetooth audio, charging station, and lighting. Launched on Indiegogo in March 2017, the product was a “runaway success on the crowdfunding platform,” according to Dash, with more than 2,000 backers pledging about $1.5 million. The Sobro began shipping to backers in October 2017, the same month it launched in Best Buy’s Smart Home flagship store.

StoreBound is now working on a number of follow-up products while also exploring the convergence of technology in the kitchen (i.e., voice control and artificial intelligence [AI] integrated into small kitchen appliances). Dash plans to use his winning combination of crowdsourcing and social media to promote his firm’s innovative products, which include The Laundry POD and the PancakeBot.

“We’re leveraging a huge social media following and able to market to that group on a regular basis, and under terms and conditions that we can control,” says Dash, whose firm overlays analytical tools on top of its social media to figure what is and isn’t resonating, and to make decisions based on that data. In an interesting twist, the company utilizes crowdfunding campaigns for product testing. 

“We introduce a lot of products at trade shows, where it’s one thing for somebody to tell you ‘Oh, I love your prototype, that’s great. I’m interested in it,’” Dash explains, “but it’s a far different thing when consumers worldwide take out their credit cards and pre-order a product that doesn’t even exist yet. That gives us a different level of confidence, in terms of our product development, and pushing different new concepts forward.”

On the flip side, a crowdfunding campaign that doesn’t resonate with the target audience is usually a warning sign. “We’ve had a number of unsuccessful crowdfunding campaigns,” says Dash, “that have saved us from spending hundreds of thousands of dollars in tooling, further development, inventory, and marketing.”

Porter Cable Miter Saw
The Porter-Cable folding miter saw gained success at Lowe’s
retail locations following a DRTV/web campaign.

On a Roll 

Housewares and hardware products are both hot right now, with much of the demand being driven by the proliferation of home-oriented cable TV shows, plus an increased emphasis on the do-it-yourself (DIY) approach to home remodeling. Watch an episode of Property Brothers and see how the twins take an older property and make it into something modern and special, for example, and it won’t be long before you’re shopping online or offline for the same special touches that the hosts are integrating into their clients’ abodes.

These and other trends shine through in the IHA’s most recent numbers, which put the global housewares industry at $355.4 billion in 2016, up 2.4 percent over the prior year. “That was pretty nice growth and it [illustrates] great health in the industry,” says Perry Reynolds, IHA’s vice president of global international development. Sales in North America rose by $4.9 billion in 2016 (representing 24.5 percent of the total world market), according to the IHA.

“Based on these numbers, the housewares industry is on quite a roll,” says Reynolds. “Every day I read about another company that’s getting into the business; the appetite from the consumer side just doesn’t stop.”

He credits better product design and increased functionality with helping to drive the market, which has benefitted greatly from the uptick in e-commerce sales during the past few years. 

“A peeler has been a peeler for 40 years, but the market really broadened when companies started to get more creative about their products, and about how they go to market,” Reynolds observes. “Now, we’re looking at an epic shift in how companies reach their customers — namely, direct or through retail — and how they balance that with online retail.”  

Nielsen Housewares Cable Rankings

The Amazon Effect 

In 2017, Amazon very consciously – and publicly – turned its attention toward housewares. Long populated by Keurig coffee makers and Magic Bullet blenders, Amazon’s Home and Kitchen section ramped up its game last year when it launched Amazon Home, a dedicated store that lets customers shop by category or room; access seasonally-curated “gift guides”; and view Kitchen Shorts video recipes.

“Pulling in an estimated $8 billion in U.S. sales during 2017, housewares is one of Amazon’s bread-and-butter product groups, second only to consumer electronics,” according to One Click Data’s Nathan Rigby, partner sales and marketing. Total housewares sales on Amazon.com during 2017 were 20-percent higher than in 2016, the company reports, and were driven by kitchen appliances such as air fryers, sous vide cookers, and the Instant Pot, with strong performances from emerging product categories such as floorcare and home environment.

“It’s impressive to see that Amazon continues to make monumental gains in housewares,” says Rigby. “In fact, they’ve made it even more of a core initiative during the past 52 weeks and their success is very transparent in how they want to win. At this point, Amazon and its Alexa product are at the nexus of retail and the Internet of Things (IoT) and providing relevant solutions to consumers’ problems.”

Rigby sees this momentum continuing as more millennials become homeowners and integrate more smart devices into their abodes. 

Drilling down to the individual product level, Rigby says several brands are standing out right now in housewares, where incumbent brands are “doing really smart things,” in terms of both direct-to-consumer and performance-based marketing. Instant Pot, for example, sold almost a quarter of a million units on Prime Day alone and became one of the biggest gift ideas of the holiday season.

“The eight- and six-quart models of the multi-function pressure cooker were the two bestselling housewares items of 2017 on Amazon,” One Click Retail reports, noting that this time-saving kitchen appliance has captured the public’s imagination, ranking as a bestseller for more than two years straight and still growing in popularity.

“The success of the Instant Pot can teach us a lot about Amazon shoppers,” says Rigby. “Namely, that they are at a stage in life where they are investing heavily in their homes, but they are highly interested in convenience and in economy of space.”

Joining the Instant Pot are the Phillips Air Fryer, the iRobot Roomba, and Dyson vacuums, all of which have managed to “figure out how important e-commerce is to their futures,” says Rigby, and are using data to gain intelligence and better engage with their online customers.

“Those efforts are showing in these companies’ use of keyword optimization, via their promotional strategies, and in their market shares,” says Rigby, who expects to see more “blending” of Amazon with individual brands in the near future. “We’re at the point where if you don’t have an Amazon strategy, then you don’t have a retail strategy.” 

Building Blocks 

After posting 5.5-percent growth in 2016, the home improvement products market grew by about 5 percent last year, according to HIRI/IHS Markit, which puts total home improvement products sales at $365 billion for 2017. The professional market increased 3.4 percent in 2017, IHS reports, and the consumer market saw a sales increase of 5.5 percent. “Growth is expected to continue over the next few years at a steady pace with total growth expected to be 4.8 percent in 2018, while 2019 looks to grow another 4.1 percent,” the report adds.

The key growth drivers for this segment — which encompasses the hardware that people use to build, fix, and remodel their homes — include a strong housing market across much of the U.S. and an American consumer whose bank account is being buoyed by recent tax cuts, rising employment, and higher household wealth.

“Income tax cuts in 2018 are expected to fuel an acceleration in spending growth to 3 percent from 2.6 percent in 2017,” IHS reports, noting that the home improvement products market continues to outperform many other sectors of the economy, and that rising prices are boosting the sales value of certain building materials. 

“The effects of stronger real income gains in the macroeconomic forecast for 2018 will be offset somewhat by a further slowing of the growth of existing home sales,” IHS concludes, “and we project growth of home improvement product sales in 2018 near the pace of 2017. Total sales are forecast to increase 4.8 percent in nominal dollars to $381 billion.”

This is all good news for hardware marketers that are using a combination of D-to-C, performance-based, social, and mobile marketing to reach the expanding base of DIY homeowners and small contractors. That’s exactly what Porter-Cable set out to do during fall 2017, when it worked with Portland, Ore.-based Atomic Direct to launch its folding miter saw. “This is a really innovative product that needed TV in order to be able to sell through at retail,” says Doug Garnett, Atomic’s founder and CEO, and a member of the Response Advisory Board.

Carried on Lowe’s shelves under the Porter-Cable brand, the campaign focused primarily on TV and also included a web component — a strategy that Garnett sees working particularly well in the hardware sector.

“As we look at the shift to other performance-based mediums, the biggest impact is still being made by TV,” says Garnett, noting that, in some cases, both marketers and retailers are reluctant to make the investment in inventory that’s needed to support a TV campaign. This, in turn, is pushing more companies to use the web for performance-based marketing. 

“In order to support a TV campaign, you have to be able to put pretty large numbers of units in a store,” Garnett explains. “But when you can meet those demands, TV becomes an extraordinary way to bring a product to market.”

Television also helps product marketers avoid some of the trickier aspects of selling online, where sites like Amazon, Wayfair, Home Depot, and Lowe’s have all carved out significant footprints in the virtual hardware selling space. 

“These are the sites where you can get the best impact for your product right away, and where video and TV, in particular, have the biggest payouts,” says Garnett. “It ends up being a very different thing than what you do via TV.” 

Looking ahead, Garnett sees the “next talent” online as the ability to promote and push out a new product online. He sees Facebook playing a key role in that process (e.g., by utilizing video within the social platform).

“For all of its beauties, if people don’t know you’re there, online can be a difficult place,” he points out. “But once people know you’re there, you get found in searches, and there’s all sorts of cool things you can do; it’s a brilliant place to be.”