Domestics

Discount Store News, Oct 20, 1997

Cannon is the only domestics Power Brand. Its reach is so commanding that it is the top Power Brand overall, reigning above the likes of Kodak and Coke. Cannon's share of consumers' and retailers' combined preference is more than twice as strong as the magnitude of 24 of the other 38 Power Brands.

In the domestics category, no other brand has even a 10% share, while Cannon has over the years consistently held more than half of the preference of all retailers and consumers polled in the Power Brands study.

Only one other domestics label even qualifies as a "near" Power Brand: Martha Stewart Everyday.

It may be shocking that the only apparent contender to Cannon with its decade upon decade of brand building and broad retail distribution, is a relative upstart that is only now available at a single chain, Kmart.

But there are good reasons why an exclusive private label line has emerged as a would-be brand with major potential.

According to discount retailers, there were few, if any, significant new entrants in either private label or brands over the past four years in domestics, which has remained among the lowest-scoring departments in this regard. By comparison, 43% of retailers cited H&BC and 38% cited candy and snacks as having added new private label brands during the past year, and more than a fifth cited these two categories as having new national brands in the store. While the field of key vendors of domestics has dramatically consolidated, the more seductive margin structure of the upstairs market has beckoned for the remaining players. Designers have also come into wider distribution through licensing arrangements.

Meanwhile, while some manufacturers have continuously improved their relations with mass merchandisers--adding newer and better quality products, rolling out line extensions, improving packaging and replenishment--from a brand-building standpoint, none of the active brands has made any recent impact in the mass market.

The high point for Cannon's competitors, in the estimation of retailers, came three years ago. In 1994, 19% of retailers polled called one of the Pepperell/Lady Pepperell/WestPoint labels a best performing brand. Also in 1994, 18% of retailers gave J.P. Stevens best performing brand status. But this brand complex has dropped to a combined 14% share in 1997.

In general, domestics is not a brand-driven category in the discount channel.

Product, selection and promotion are the consumer loyalty factors. The Cannon brand has crafted a lasting relationship with these factors in the mind of the consumer, thus it stands as the exception in domestics.

Cannon has cruised along with a 70% preference level among discount shoppers since at least 1993, although this level dropped to 62% last year and is now down to 53%. Nevertheless, no other label registers higher than 3% among consumers polled in the 1997 Power Brands study. And over the last five years of the study, no discount channel national brand has achieved higher than a 6% share. (Even Fieldcrest, Cannon's sister brand for department stores, has never been cited by more than 8% of consumers during this period.)

The Martha Stewart Everyday label has not yet reached very far into the consumer's mind. However the stage is set. The label has latent interest, the new product lines and packaging reflect great thoroughness of preparation, manufacturers have poured an extraordinary level of resources into the supply line, and the reach of the multi-media campaign by Kmart will begin to dovetail with Martha Stewart's efforts elsewhere.

Sixty-two percent of Kmart shoppers have a brand preference in domestics, compared to 59% of Wal-Mart shoppers and just 39% of Target shoppers (who generally expect to find high quality from Target house brands). Ironically, Kmart's lead in brand preference could increase if consumers continue to view Kmart's Martha Stewart Everyday label as a brand.

As for the long term, Cannon is stronger with older consumers and must work to shore up brand awareness among Busters. Two-thirds of Empty Nesters and one half of Boomers prefer Cannon, while only one-quarter of Busters select Cannon.

Kmart, with the Martha Stewart Everyday program, has an opportunity to cement a relationship within the trend-friendly and household-forming ranks of Busters.

Over half of the Busters have no compunction about buying private label, and nearly three-quarters have no brand preference at all in domestics, compared to about half of Boomers and Empty Nesters.

As the marketplace awaits the culmination of the Pillowtex-Cannon merger, few observers expect the Cannon brand to change course for the worse. The brand could emerge a more empowered champion than ever. However, the field is open for any number of contenders.

One indication of things to come is the exclusive contract, effectively starting in January 1998, between WestPoint Stevens and Target for WestPoint's Ultra Touch bed and bath label, widely familiar with consumers as a result of a decade on the shelves at a variety of discount chains. The Target product development and store brand marketing machinery could elevate Ultra Touch into prominence in a relatively short time.