No doubt, the economic landscape is challenging right now. But the market for home and housewares has historically been pretty resilient during difficult economic times. (After all, our homes are important to us, no matter the circumstances.) And consumers are more home-focused than ever before. That means the question to be asking in the coming months is not so much whether consumers will be buying for their homes, but what and from where.
“There’s definitely some challenges out there, and we do think there will be some more choppy waters in the next few months,” said Don Unser, Circana president, Thought Leadership, at IHA’s CHESS event in October. But he went on to explain that the housewares industry is in what they at Circana call “a market share jump ball period.” In other words, there’s an opportunity for companies to change the way they connect with consumers and “an opportunity for consumers to broaden their horizons in terms of the products they interact with.”
Retailers who inspire consumers with innovative and useful products, who connect with them on deeply felt needs and aspirations, and who do so at appealing prices, will likely be rewarded.
Compared to 2019, the number of general merchandise units has been flat or declined for the last 15 months (as of August), according to Circana/Retail Early Indicator. But beauty, housewares and small appliances maintained positive unit growth.
Within home, some categories are starting to experience softer unit demand, most notably those that involve time- or labor-intensive forms of cooking. But when it comes to dollar spend versus 2019, there’s been positive growth across most categories, according to Circana/Retail Tracking Service.
Consumers are still spending of course, they’re just being more selective about what they buy and how much they spend on it. When you look at general merchandise categories that are doing well, a few important themes emerge, said Joe Derchowski, Circana vice president and home industry advisor.
Spending on essentials is not a surprise, but the continued growth of prestige beauty might be to some. Innovation in marketing and new products are likely inspiring consumers here, and causing many to feel like high-end beauty products are necessary for returning to in-person activities and/or contributing to feelings of positive wellbeing.
The return to work/school/activities is also an important theme, as are deeply felt desires for mental and emotional wellness, along with different or unique needs as a result of hybrid work arrangements.
So, what’s driving sales of home and housewares products? The renewed desire to entertain guests in our homes is important, and likely a factor in home décor spending tracking 3% above 2022 (year-to-date), according to Circana Retail Tracking.
The return to work/school/activities has renewed consumers’ desire for convenience. Also, popular hybrid work arrangements create dueling needs: office days require products for transporting beverages and meals (as well as a need to get dinner on the table quickly and easily), while remote work days cause storage and space-related needs at home (in addition to increasing usage of our kitchens).
Importance of Value
Affordability is relative of course, so it’s important for retailers to focus on data or insights from their own customers… or at least consumers with similar demographics.
But no matter the income level or age group, a survey from McKinsey & Co. found that pricing will be consumers’ No. 1 consideration this year when shopping for holiday gifts. At 66%, that’s seven percentage points higher than last year, and considerably ahead of the next considerations (product availability—36% and convenience—33%).
In the end, it might come down to perceived value. “Our best-in-class clients are tweaking their value messaging right now,” said Unser.