WHAT PEOPLE BUY: KITCHENWARE AND ACCESSORIES


Some 56 percent of U.S. households bought kitchenware and housewares in 2003, about even with the 58 percent that did the same in 2001. A category that is often perceived as a household necessity, consumers are encouraged to buy when retailers and marketers give them a reason to replace existing kitchen accessories with the latest models that give new functionality or ease of use. For example, OXO, a division of World Kitchen, is a model of a housewares company that gives consumers a good reason to buy. They have designed and developed a line of can openers, slicers, dicers, peelers, and other manual utensils that provide a measurably better consumer experience in the kitchen. Their ergonomic designs simply fit the human hand better than anything else out there. That gives consumers a well-justified reason to throw out all the old stuff cluttering the kitchen utensil drawer and replace them with new OXO products that, as its Web site says, "feel great, look great, and perform with excellence."

Industry Snapshot

Total spending on kitchenware and housewares, including tabletop and dinnerware products, was $37.1 billion in 2002, up from $35.6 billion in 2000 (see Figure 8.16). That represents a 4.1 percent increase in spending on kitchenware products. Small appliances, many of them devoted to kitchen duty, grew 7.9 percent over the two years, while sales of traditional kitchenware, utensils, cooking equipment, and tabletop grew more slowly—only 3.6 percent in the same period.

 

2000

2002

% CHG '00-'02

Total Personal Consumption in millions

$35,635

$37,104

4.1

Total housewares

30,993

32,097

3.6

  • Plastic dinnerware

1,581

1,622

2.6

  • China and other dinnerware

9,298

9,597

3.2

  • Flatware

3,936

3,915

-0.5

  • Glassware

4,029

4,184

3.8

  • Silver serving pieces

465

455

-2.2

  • Other serving pieces

1,457

1,488

2.1

  • Nonelectric cookware

10,228

10,847

6.1

Total small appliances

4,642

5,007

7.9

Source: Bureau of Economic Analysis; Bureau of Labor Statistics Consumer Expenditure Survey Diary


Figure 8.16: Total Kitchenware and Housewares Industry Snapshot

Salton with sales of $922.5 million in 2002, is a major player in kitchen appliances sold under the Salton name, as well as George Foreman, Toastmaster, Juiceman, Farberware, Melitta, White-Westinghouse, Kenmore, Breadman, Maxim, and others. Every year its product designers dream up new special features to add to their appliances to render last year's model obsolete, so shoppers are justified replacing a perfectly serviceable indoor grill, toaster, juicer, or breadmaker with the latest and greatest. The company's newest strategy is to expand into the bed and bath category with new personal-care appliances that appeal to the company's existing health-conscious consumers.

Retail Overview

Kitchenware and housewares are widely available at every discount department store, traditional department store, hardware store, and virtually every grocery store. Even convenience stores get into the act selling bottle and can openers and other necessities for off-hours household emergencies. The retail market share leaders, however, are the discounters, including the big three—Wal-Mart, Kmart, and Target. In Unity Marketing's latest survey, some 44 percent of shoppers made purchases of these items in discount stores (see Figure 8.17). Traditional department stores, such as Sears, JCPenney, and others, followed close behind, servicing 40 percent of shoppers. Nonstore retailers, including television shopping, the Internet, and mail order catalogs, are a growing source for these goods, with some 10 percent of shoppers making kitchenware purchases without crossing the threshold of a store.

 

EST. SALES 2002

Wal-Mart (4,775 stores)

$10.3 billion

Kmart (1,500 stores)

3.6 billion

Target (1,100 stores)

2.6 billion

Federated Department Stores (450 stores)

1.4 billion

Sears (about 2, 200 stores)

1.4 billion

Bed Bath & Beyond (500 stores)

1.3 million

May Company (450 stores)

1.1 billion

Williams-Sonoma (480 stores)

950 million

Source: HFN magazine


Figure 8.17: Housewares Market Share Leaders

Purchase Drivers

Often viewed as a necessity rather than a discretionary purchase, a significant amount of spending on kitchenware is for storage containers to store all the other unnecessary "stuff" people buy, accumulate, and collect. Along with a clean house, people crave an organized house. As one focus group respondent explained: "With all the men [i.e., husband and three sons] in my house, everything is a mess. I would love to have it better organized. There would be less stress if it was better organized. Right now, it is all ripped apart."

In servicing the need to store the things we buy, Newell-Rubbermaid, a $7.5 billion company, which generates nearly 70 percent of total company sales in housewares products, is on to something. The company has been uniquely successful at taking generic everyday housewares and making them more special, more highly positioned, and more in demand among consumers, through branding. Their housewares brand portfolio includes Rubbermaid, Levolor, Calaphon, Pyrex, and Kirsch. The company has moved up-market in recent acquisitions, such as Paper Mate/ Parker, Burnes of Boston, Graco, and Little Tikes. By adding more exclusive brands to its portfolio, the company is making a strategic move toward selling products that satisfy consumers' emotional as well as physical and practical needs.

Demographic Variables

Being a gender-neutral category, men and women report purchasing kitchenware and housewares accessories nearly equally. Younger consumers under age 35 are the leading buyers in this category, but purchase incidence remains relatively high through age 65 when purchase incidence drops sharply.

Purchase incidence is fairly even across all income levels, but rises sharply among the most affluent households, those of $75,000 and above. Clearly the more affluent have less need to get a couple of more years use out of older appliances and kitchenware and so can respond to marketer's pitches for "new and improved." These consumers also have been investing in kitchen remodeling in unprecedented numbers. After an investment of $25,000 to $50,000 on new appliances, cabinets, countertops, and fixtures, what is a thousand or two more spent on getting new small appliances, cookware, and utensils to update the whole cooking experience?

Household size and presence of children in the home relate to purchase incidence, as the larger households and those with children under age 18 in the home express a greater need to buy kitchenware and other housewares.

Key Demographics of Buyers of Kitchenware.

  • Men and women are equally involved.

  • Trend is toward consumers under age 35.

  • Highest-income households buy more.

  • Larger households buy more.

  • Presence of children increases incidence.




Why People Buy Things They Don't Need. Understanding and Predicting Consumer Behavior
Why People Buy Things They Dont Need: Understanding and Predicting Consumer Behavior
ISBN: 0793186021
EAN: 2147483647
Year: 2003
Pages: 137

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