Cocooning still carrying core categories: mass 'Ikeas-ization' puts furniture in hot growth seat - home goods & housewares - trends

DSN Retailing Today, Dec 15, 2003 by Mike Duff

the tried-and-true home goods categories gory has faired rather well in the last two years, considering the defensive spending posture adopted by American consumers in the wake of 9/11. And now that consumers are growing more confident, the category is likely to stay strong. That doesn't mean, however, that Americans suddenly have the confidence to venture into radically new home goods offerings. In fact, if 2004 were to have a mantra in home goods, it could be characterized as the strengthening of key core categories, such as domestics, small electrics, furniture and appliances.

A slow but steady change in lifestyle has also had a considerable effect on home goods in the mass market. For instance, as Americans spend more leisure time out of doors, outdoor lighting has become more prevalent at mass, with much of it being sold at big-box home centers and discount stores. But the one area where mass has witnessed its most rapid and sustainable home goods growth is in RTA furniture.

Ikea first made inroads in the United States when baby boomers were young singles looking for alternatives to traditional living and bedroom sets. But Ikea and others, including discounters, home specialists and warehouse clubs, are set on broadening the appeal of their particular manner of selling furniture, whether it be RTA desks or leather sofas. Furniture initiatives at mass have enjoyed success. Cost Plus World Markets, for one, has expanded its presence in furniture, which has generated much of the incremental growth it has enjoyed on the non-consumables side of the business. It will continue to press furniture initiatives in 2004. "We are exploring the media market as far as media cabinets, lots of entertainment pieces," Stephen Higgins, Cost Plus vp of merchandising, said in a November conference call. "That could be a good growth category for us in the future. We're seeing opportunities at the opening price points and in trading that customer up as we go forward."

Price and shopping convenience lure consumers to mass-market home goods as they adjust to the self-service presentation. They are making the move to mass in furniture, as demonstrated, and appliances, where companies like Best Buy, Lowe's and The Home Depot have emerged as top retailers even as warehouse clubs have begun creating their own niche. Not every purchaser will shift to buying appliances and furniture in the mass market. They haven't in other categories even as mass-market retailers have become leaders. Rather, as mass-market players expand their presence in those categories, they come to set a standard for value to which other retailers must respond.

In terms of goods, consumers continue to ask for more convenience and better results from home products. Coffee makers that provide a better cup of joe are coming on in the market, and ice cream machines are getting another look from consumers now that they've been made simpler to use.

In floorcare, vendors are partnering to provide innovative products that give consumers more choice and convenience. Hoover is among those driving the business. With FloorMate, it pioneered a new approach to bare floor cleaning as well as partnerships with Lysol and Old English that gave consumers confidence in a breakthrough product. Partnerships will be a bigger factor in home retailing going forward, with an agreement between Applica and Procter & Gamble expected to produce several products over the next few years.

Of course, nothing in floor care is quite as revolutionary as the Roomba robotic vacuum. Not only is it the first mass market-oriented robotic household device in floorcare, but it may help automated products in other segments break through. The world, it seems, is ready. In a survey, the United Nations Economic Commission for Europe concluded that "household robots are now on the verge of taking off." The survey asserted that sales of such devices--developed for such tasks as vacuum cleaning, lawn mowing, window cleaning and other types--could increase to around 700,000 between 2001 and 2005. But once they hit the mass market, they'll really take off.