Gadgets crack open margins

Discount Store News, Jan 4, 1999 by Mike Duff

There is something in Americans that loves gadgets. And now may be the ideal time to make kitchen gadgets and accessories highly accessible to shoppers, given the relatively good margins of these items and their ability to provoke impulse purchases, not to mention the present economic situation that has consumers willing to spend.

Once the consumer catches gadget fever in any retail category, it never really subsides. But after the initial fervor, consumers usually become much more cautious and sophisticated. Novelty isn't enough anymore, the product has to make sense and be affordable.

One retailer that is making the most of its kitchen accessories offerings is Service Merchandise. In its new superstore format (unveiled recently in Bradenton, Fla.), the company has greatly expanded the range and depth of its kitchen gadget selection. And since the chain's product is often available in pegboard packaging, expanding kitchen accessories and gadgets is usually easy to accomplish.

As is often the case at Service Merchandise and Bed Bath & Beyond, a lot can be accomplished by just climbing a wall, showcasing more product and creating a space that is among the most conspicuous and eyecatching in the store. But Service Merchandise isn't just expanding kitchen accessories in its Bradenton test, it's expanding its retrofitted store base as well as part of an effort to get more product out from behind the service counter and in front of consumers.

"The margins are good, it's an easy department to operate and ties in with our initiatives in customer service as it maximizes the impact of the product lines," said Laura Ellis, a Service Merchandise spokeswoman.

Indeed, one way in which merchandising kitchen accessories has changed today involves how closely the items are tied to cookware. While a lot of that has to do with retail adjacencies, manufacturers also have built upon the idea of linking cookware and gadgets, adding design elements that make kitchen accessories more compatible to the various styles currently evident in cookware.

In a Target store in College Point, N.Y., for example, kitchen accessories were merchandised on two facing 24-ft gondolas just beyond cookware, a perfect example of the evolution of the kitchen accessory. Of course, the basic products are still available, such as the metal-stem manual can opener, retailing at $1.99 and displayed in a basket hooked into a pegboard. Better items were more conspicuously displayed For example, hanging out nearby were flat metal can openers with plastic-wrapped grips in white and hunter green for $2.99. A larger, slightly more stylish variation in white and purple was available just above for $5.09.

Such a good/better/best selection of private label manual can openers might have been considered more than adequate a few years ago, but not anymore. Across the aisle from the no-name range of products, Target offered a selection of both private label and name-brand accessories, each with a benefit story or manufacturer tradition to lure shoppers and justify a premium price point. For example, under its stainless steel brand Chefmate, Target offered a variation on the stem can opener that included a flat metal hooded bottle opener for $4.99.

Target also offered two branded lines of kitchen accessories, T-Fal, with a range of plastic tools for use with non-stick cookware, and Oxo. Among the American pioneers of ergonomic design in housewares, Oxo has a variety of products with large soft grips intended to make kitchen tasks easier. In Oxo's SoftWorks line, Target displayed a manual can opener with an oversized grip and crank for $9.99.

Thus Target, in a product segment as simple as can openers, offered six skus that had a variety of different appeals. Besides the opening price point products, the store had items intended to match the funky color pallets popular in cookware and tabletop, as well as plenty of the versatile white. It also had a stainless-steel product available as well as an item with an ergonomic feature for older shoppers and those who prefer an emphasis on functionality.

Of course, not every kitchen accessories product was available quite so abundantly or in all product lines. For example, only two cheese slicers were available, both private label, but the spread between their prices gives some sense of bow much of a premium. Target feels it can expect from step-up customers. The opening price item retailed for $1.99, the other for $5.99.

Conversely, the store bad a considerably wider array of some items--food tongs, for instance In its no-name private label line, the store carried two wire skus at $1.79 and $1.99, as well as more dramatically styled flat metal salad tongs in stainless steel for $9.99. The Chefinate line included two items, utility tongs at $4.99 and salad tongs at $8.99 T-Fal plastic tongs retailed for $4.99, but no corresponding Oxo product was displayed.

In ice cream scoops, it was Oxo, not T-Fal, that offered its SoftWorks item at $5.99. In addition, Target carried a no-name stainless steel item at $3.99 and a Chefinate product for $8.99. Two opening price point products in the no-name line were available at $2.99. One was a solid scoop, like all the others available, the other was a trigger-action item.