Consumers make themselves at home

Discount Store News, Oct 26, 1998

There's more of a celebration of home today. People are enjoying their homes much more, and they're focusing primarily on decorating for a casual lifestyle.

If money spent is a measure of a category's importance to American families, consider that U.S. households spent an average of $560 each on housewares in 1997, according to combined statistics from a variety of federal government sources. That's less than half as much as they doled out for restaurant meals-- but far greater than fruits and vegetables ($467) dairy products ($304) and even educational expenses ($481).

Housewares may be entering a renaissance age, where its product mix is evolving to neatly capture the needs of the aging Baby Boomer generation. "We've seen a shift in focus toward home health items and a casualization of both home and work environments," observes Perry Reynolds, director of marketing and trade development, National Housewares Manufacturers Association.

"Many of their children have left home, and the Boomers are leading a more relaxed lifestyle. As people travel more, they absorb other cultures and are making their homes more eclectic. They love Italian coffee, they know what specific Oriental and European cuisines taste like, and they're doing more home preparation of foods in order to recreate these experiences," he adds. "There's a new spirit behind this shift to home cooking as entertainment."

Indeed, adds Jack Lewis, president and COO of Texas-based Garden Ridge: "There's more of a celebration of home today. People are enjoying their homes much more, and they're focusing primarily on decorating for a casual lifestyle. Boomers' average income and age have increased over the years, and our customers keep pushing us to sell better quality merchandise."

Garden Ridge is a 27-store chain of home decor superstores averaging 120,000 sq. ft., primarily in the Southeast. The vast expanse of its stores enables Garden Ridge to sell opening price points and better goods to be a destination for a cross-section of customers. It is a category killer in the truest sense of the word-devoting, for example, 25,000 sq. ft. to floral stems, artificial flowers and bushes compared to the typical 12 to 24 linear feet of a mass merchant.

Another sign of Boomers' changing needs and tastes: the popularity of products that require life experiences to appreciate, such as room dividers with an inset series of photo frames to display pictures of grandchildren, travel and more.

Beyond the casualization sought by Boomers who are feeling some economic and spatial freedom for the first time in their lives is the rise of the Xer generation, the 20-somethings to whom a casual lifestyle is the only one they know.

Moreover, the rapid surge in home offices as people devote portions of their homes to work pursuits has caused a sales surge in storage and organization products. Indeed, between entrepreneurism and telecommuting, 43 million Americans already work at home, and IDCILINK expects that will exceed 50 million by the year 2000. Moreover, the National Federation of Independent Businesses says 5 million Americans started 3.5 million businesses in 1995, many of them at home. This ongoing trend will continue to influence housewares choices.

No wonder then that housewares has grown by 6.1 percent annually over the latest five-year period to $40.54 billion or $388.80 per household, when looking at the NHMA subset of categories most closely linked with the trade group's member base. By contrast, the broader, more traditionally defined housewares industry has climbed by 2.5 percent annually over the latest five-year period to $58.37 billion (including retail and wholesale sales), or $559.80 per household.

This is the first year in which the NHMA adopted a five-year moving-average growth rate. Reynolds cites two reasons: "The Department of Labor survey seems to be more intuitively rational if it is taken over a longer period of time than one year. Their respondent base shifts each year, and items like sewing machines are bought twice in a lifetime by a family, so we want a longer view. The 6.1 percent growth rate we cite is more reflective of our business."

The three dominant trade classes for housewares sales continue to be discounters/supercenters, department stores and specialty chains--which racked up more than half of total retail housewares sales in 1997, says NHMA. The mass merchants alone accounted for 33.1% of the volume, or $16.8 billion of the $50.9 billion in retail housewares sales. This is a significant gain fox mass merchants, whose share was 28.9 percent in 1996.

"We have to look at housewares as solving human needs within a social context," explains Reynolds. "As people cross the 50-plus barrier and beyond, they're making sure their homes are healthful places to live. You may have to stretch your imagination, but that can go from food preparation on antimicrobial cutting boards to water and air purifiers to aromatherapy to wheels on garbage cans."

That may be true, but style is equally important across the breadth of housewares categories. Garden Ridge, for example, plans a color palette for its merchandise 18 months in advance and changes it quarterly. "This gives our shoppers continuity, and makes it convenient for them to bring together a coordinate look for their homes, says Lewis, who sees a faster track today for the development of new products. He is glad to see "a dynamic environment with vendors anticipating what merchants want."