Find Out What Itâ€™s Really Worth With Better Design
Monday January 21st, 2013 - 1:52PM
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CES in Las Vegas last month heralded the broader launch of Ultra-High Definition TVs. The breakthrough of all those additional pixels you probably didn’t even know you needed was made to sound oh-so affordable at less than $10,000.
Our obsession with high-tech electronic gadgetry often comes without the same price sensitivity that consumers have been conditioned to experience when they’re shopping for a coffeemaker.
The housewares industry is no less obsessed than the consumer electronics industry with implementing the latest technology and design innovation toward the goal of a better life.
Plus, you can get it all for $29.99.
Take that as more irony than sarcasm. The housewares industry produces among the best retail values. By far.
Indeed, housewares may be the most democratic of all retail categories when it comes to catching the eyes of consumers. How else can you explain how the introduction of the latest microfiber mop gets to share the spotlight and the enthusiasm with the launch of the latest robotic vacuum cleaner?
The January 21 edition of HomeWorld Business comes with the annual On Design supplement, our editors’ annual acknowledgements of many of the previous year’s housewares design innovations.
Improved utility and increased desire brought about by leading-edge style, technology, materials and thinking should be the antidote to price-driven merchandising— especially for housewares, in which truly big tickets are the exception.
So, how much more is better design worth? That is a tricky question. But the answer won’t come if the question isn’t seriously and thoroughly considered.
The practice of starting with a desired pricepoint, then designing and building a product from that measure isn’t always a formula for optimum return on investment for the manufacturer or the retailer.
Competitive pricing shouldn’t be relative to pre-determined price slots; it should be relative to what comparable products deliver for the money. Base the pricepoint on what is reasonably required to build a better product.
After the recent holiday season, many retailers were pleased that a late sales surge helped compensate for December’s slow start. Many also lamented that margin was impacted because the later sales came at deeper discounts than planned.
Would that surge have been significantly less robust without additional price reductions? Or were consumers just warming up a bit as they sorted through a major hurricane, a national election, mass violence and concerns about tumbling over a fiscal cliff?
We’ll never know. Fear in business can lead to results that fall short of those from more confident, resolute actions.
This industry needs to adjust its value equation. Why not add a few more profit points for everybody by nudging up pricepoints, all without radically altering the exceptional price/value benefit housewares consumers have been conditioned to expect?
Invest in better product. Price it right, and leave room for just enough promotional activity to keep the consumer engaged.
A new generation of consumers (in age and in mind) wants substantial design— good-looking, high-functioning, long-lasting product. That they might be more cash-strapped doesn’t mean they’ll tolerate lower quality.
They really don’t know how much a good coffeemaker is supposed to cost.
We’re not talking about $10,000 TVs here. Keep everyone focused more on the products and less on the price.
Then we’ll find out what everything is really worth.
Tags: • Housewares •
Welcome to the 14th annual HomeWorld Business Retail Champion edition (May 11, 2015), featuring the first two-time selection: Costco, which also was recognized for its housewares merchandising innovation in 2003.