24 Oct 2008
Homing In On Hot Sellers(HKTDC Houseware, Vol 01,2009)
Amid economic doldrums and environmental concerns, low-price eco houseware looks set to sell well
Inexpensive household necessities, home entertainment and improvement products, especially eco-friendly or value-added varieties, are likely to emerge hot sellers in the face of currently flabby economies.
This was the prognosis delivered by industry experts at a seminar on trends in lifestyle products held on 22 April 2008 as part of the HKTDC Hong Kong Houseware Fair.
"It is one of the most difficult times in the US housewares market and there are many challenges," said Peter Giannetti, Editor-In-Chief of US-based business-to-business magazine Home World Business.
The key challenges were rising prices for fuel, raw materials and Chinese mainland labour, plus a weak US dollar, which combined to substantially increase supply chain costs.
"In a soft economy, shopping habits change; the price-and-value combination looms large," Mr Giannetti reasoned. "As a result those dealing in necessities or lower price-point items will be winners and those that deal in products that do not need to be replaced will lose."
Feeling the pinch will be such wares as decorative lighting, vacuum cleaners and certain cookware, while winning categories include cutlery, kitchen tools and small kitchen appliances, he reckoned.
He predicted growing demand for existing "hot-spot" segments, which include home entertaining, eco-friendly or "green" lifestyles, outdoor living, and health and wellness. "The current hot spots thrive in a soft economy."
Home entertainment, for example, enjoys year-round merchandising potential when money is tight and consumers prefer entertaining at home to going out. "Wine accessories and bar/cocktail products that incorporate casual yet elegant designs have a growing market in the US," Mr Giannetti observed.
Among other home entertainment favourites are portable ice makers with a retro feel reminiscent of the good old days, and innovative coffee- or tea-making utensils such as double-walled coffee cups.
A similar trend has emerged on the other side of the Atlantic. "Given the rising cost of property in the UK, many people are choosing to stay where they are, and spend money on home improvements and making their homes a trendier place in which to entertain more," imparted Sue Marks, Editor of UK magazine Progressive Gifts & Home Worldwide.
Japan, meanwhile, has seen substantial growth in homeware and DIY hypermarkets, reported Life Style Industry News journalist Shingo Maeda.
"Consumers are looking for products that are durable and functional with a good price, especially younger consumers aged 20-30 years old," he said.
Eco-friendly houseware promised the biggest opportunity as consumers become increasingly environmentally conscious. "The green category is the single biggest trend in the US market," maintained Mr Giannetti.
Growth potential for eco-friendly products is especially pronounced in kitchenware, as a recent survey by Albing International Marketing (AIM) indicated that 53% of US consumers did not recall seeing "green" kitchen products.
However, it may take more than environmental friendliness for these products to hit the big time, as 95% of respondents said they would buy green products only if they had the same price as non-green versions.
Mr Giannetti noted consumers also wanted green products that performed well and featured trendy designs. "The industry also needs to give consumers more information about how and why the products are green, and more certification is needed."
Some companies were already well on the way to success through kitchenware and tableware products that are stylish, durable, yet biodegradable. "This product area is a big growth market," he said, and added that consumers were also responding well to green non-stick cookware free of certain chemicals currently in standard non-stick products.
Also gaining popularity were home bamboo products featuring stylish designs, Mr Giannetti said.
The UK was equally keen on planet protection. "Eco products are at the forefront of suppliers' and consumers' minds in the UK," Ms Marks advised, and cited recycled teak mirrors as examples. "Products need to make a difference to the environment and to the consumer's life."
The wave was sweeping Japan as well. "The green trend is also impacting the trends in Japan, particularly with food-related products," noted Mr Maeda, and underscored the nation's stress on safety for both the environment and consumer.
Safe and sound
"Safety and quality are the number-one priorities and consumers are looking for product certificates," he observed, and noted that some consumers are contacting manufacturers directly regarding product safety.
For all houseware types, advised Mr Giannetti, the key was to add value to the product by promoting its quality, durability, versatility and degree of differentiation from the pack. Other speakers reported consumers' liking for functional and innovative offerings.
Meanwhile, emerging markets with booming economies were seeing an increased demand for houseware.
In Poland, for example, spending on household goods grew 18% in fiscal year 2006-2007, and 39% of the population visited homeware hypermarkets each month, according to Jerzy Osika, President of Polish firm Promedia Co.
Armed with such useful intelligence, houseware traders look certain to be home and dry in overcoming any challenge.
Current trends in houseware design were highlighted by seminar speakers at the HKTDC Hong Kong Houseware Fair 2008:
Text by Vicki Williams