It’s no secret that digital commerce continues to gain a competitive edge, making it more important than ever to identify new customer bases and new ways to reach consumers. While the inherent convenience offered by the online channel has contributed to its growth, we also see demographic shifts and related life moment milestones further fueling its momentum. Major home appliances are part of this wave, presenting unexpected opportunity for the housewares industry.
Major appliance purchases happen at specific times, the main “life events” being a complete kitchen remodel and a kitchen refresh or update. It may be surprising to many in the housewares industry that overall tabletop spending related to a new home purchase or home renovation was 20% higher than bridal occasion spending on the same products in 2017, according to NPD’s consumer tracking service. Depending on whether they are doing a kitchen rebuild or a refresh, buyers will approach related purchases differently.
By understanding the sequence in which these purchases are made, and what other home related purchases are being made over time, retailers that already have some of a given consumer’s business can attract more of it. Conversely, retailers that weren’t previously in that buyer’s trajectory have an opportunity to insert themselves into it— whether they play in the major appliance or home improvement market, or not.
Kitchen suite buyers— that is, consumers buying all major kitchen appliances (refrigerators, dishwashers, and ranges)— are likely embarking on either a kitchen remodel or refresh. NPD’s Checkout e-commerce data, analyzing purchases at the receipt level, show that online kitchen suite buyers spend an average of $30 more per person on non-electrics housewares purchases than non-suite buyers. Further analysis of this data paints a dynamic picture of these consumers, showing their purchase rate of a variety of home-related products over the months prior to and following their kitchen suite purchase.
Buyers appear to furnish their kitchens with small kitchen appliances at the same time as the kitchen suite purchase, and acquire the non-electrics housewares items later when they are looking to entertain in the home and show off their new and improved kitchen. Retailers have a window of opportunity to either keep or capture this customer for the additional purchases that help to deliver on the desired new look and feel in the kitchen.
Taking Hold Of A New Opportunity
Understanding where opportunities exist outside your categories is a viable way to grow in this market. Over the course of two years, home renovation buyers (those who purchase kitchen suites and home improvement products) spend a quarter of their online wallet on small appliances, and an additional 16% on other home goods. Complementary retailer partnerships have been a frequent occurrence over the past year, creating an opportunity for a home improvement outlet to partner with a housewares retailer in order to capture incremental market share among home renovation buyers.
The home renovation consumer’s incremental spending on seemingly unrelated products for the home indicates that capturing this consumer’s attention can prove particularly rewarding for small appliances and non-electric housewares. Checkout e-commerce data tells us that the home renovation consumer spent 23% more on tabletop purchases than the average non-electrics housewares buyer, more than 50% more on home environment appliances, and more than double on small kitchen appliances. Expansion into complementary product assortments, and winning some of this home renovation related market share, is another trend for our industry to consider.
Driving It Home With The Consumer
The major appliance category is moving inexorably online, which calls for a whole new set of strategies on the part of all home retailers to help consumers with a solution to their life moments. While newer online players are attracting many customers in an emerging pattern of direct-to-consumer, it’s important to remember that the retailer who has already built a relationship with their customer has some leverage.
Existing consumer relationships should be nurtured by offering customers the products, brands, and shopping experience they have come to expect from brick and mortar brands they are comfortable with. Data can help see the hidden product relationships and purchasing sequences, revealing where else your customer is shopping, what your competition is offering, and where it’s possible to insert oneself into the buyer’s path to purchase. It all comes down to understanding the consumer.
Joe Derochowski is executive director and home industry analyst at The NPD Group. He can be reached at [email protected].