Housewares merchandising needs a touch of romance

Discount Store News, August 4, 1997

Kmart is moving its housewares department closer to soft goods in most Big K retrofits as it strives to improve productivity in the stores through updated and improved department layouts and selection, with some added help from more logical department adjacencies. The strategy also taps into the major trend in the home category: the close relationship between soft and hard home. Keeping the two parts of the home category in close proximity is working for retailers. Many are benefiting from cross-merchandising and cross-selling techniques. An example is home decor items such as picture frames and framed art merchandised with bed and bath.

Citrus colors--lime, orange, yellow and blue--are not only the hot colors in apparel but are making a comeback on retail shelves in related categories. Caldor has made a big statement with home accessories such as party tubs, wastebaskets and tote baskets in the '70s color palette. Also hot are wall clocks, tea kettles and ceramic mugs in these trendy colors.

Curved designs and rounded edges are changing the shape of housewares. Toasters, hand mixers, coffee makers and can openers are more ergonomically designed and fashionable. Finishes are changing in small appliances as well. Chrome is being used as an upscale alternative to black, white or the hugely popular forest green and was spotted on Target's shelves as part of its private label Chef Mate small appliance line. Caldor and Kmart have each invested in Toastmaster's Chromatics line of chrome electric appliances, which includes a toaster, waffle baker, can opener and hand mixer.

Breadmakers, now primarily a fourth quarter business, have suffered from increased competition and price erosion. Price tags have dropped from a high of $131.90 in 1995 to below $99 in the first quarter of 1997. These changes enable discounters to stock a greater number of products. Wal-Mart and Venture have each stayed true to the $99 and below price level, while Kmart has been more aggressive in stocking a wide sampling from a low of $79 to a high of $169 for West Bend's 2-lb. Automatic Bread and Dough Maker. The next generation of products marry breadmakers with other appliances like toaster ovens to help incite interest in the category and restore price points.

Floor care continues to grow despite a high saturation level estimated at 97%. Powering this growth are technological advancements such as increased cleaning power, dirt sensors and improvements in cleaning tools. Some of the latest on the market are The WindTunnel by Hoover, The Whirlwind by Eureka and Fantom Thunder Vac by Fantom Technologies, which tout cleaning power comparable to severe weather conditions. These upgraded models, with HEPA filtration systems, on-board attachments and the elimination of filter bags, have brought price points up to about $300, enabling retailers to cash in on greater margins.

Bigger was definitely better in storage as 50-gallon containers that can hold toys, seasonal clothing and everything else cluttering closets and basements began to muscle their way onto shelves. Retailers reacted by investing more space in the category. Caldor, for instance, added 15% to 20% more space to its storage area this spring but will be cutting back sku counts by 15%, preferring to carry just the best movers.

Health concerns continue to fuel consumers' thirst for air and water purifiers. Target has taken a leadership role by doubling its space for water filtration over the past two years and rolling out a new planogram that focuses on signage written in layman's terms, detailing the different products and the benefits of each. Wal-Mart debuted a new header program for its water filtration this summer. Caldor used its weekly circulars to get the message out by devoting a full page to "healthy living," which features these products and the benefits of each.

Suggestive selling is not a choice anymore in housewares but a necessity, as pressure from home furnishings superstores like Bed Bath & Beyond, HomePlace and Linen's Things have prompted discounters to get creative. ShopKo and Target, two of the best in visual merchandising, have effectively displayed dishes in table settings and have shown ceramic bowls and platters merchandised in themes such as Chinese, Italian or Tex-Mex.

Appliances went unplugged as cordless products found a home. Black & Decker was a pioneer with its VersaPak power tools system in 1995, followed by housewares in 1996. A new entrant for the upcoming holiday season is the ScumBuster Outdoor, a cordless, water-immersible scrubber with three attachments. Sanyo also came to market with its Cord Free Collection, which features an electric cheese grater, salt and pepper mill, can opener, hand blender and food chopper/processor, all with interchangeable, rechargeable battery packs.

Housewares Productivity

Department size         3,655 sq. ft.
Sales per sq. ft.             $273.59
Turns                            3.11
Initial markup                 35.84%
Gross margin                   30.46%