Housewares Executives Bullish About 2017
Many housewares executives are bullish about 2017, despite the political and economic uncertainty that characterized 2016 both in the United States and around the globe. With a close eye on the new administration, industry leaders will also be focusing on the continued transition to seamless retailing, opportunities to connect directly with consumers digitally and keeping the industry fresh and relevant to today’s consumers.
Global housewares spending rose to $346.9 billion (an increase of 4.8 percent) in 2015 – the most recent available statistics, according to the International Housewares Association’s (IHA) 2016 State of the Industry Report. In the United States alone, housewares expenditures increased 9.4 percent.
Anecdotally, it appears that 2016 may not boast gains as high as 2015. “We felt that business conditions (in 2016) were somewhat challenged by uncertainty, based on most economic reports, which seemed directionless,” said Chip Steidle, CEO of John Ritzenthaler Co. “As the year wore on, the election added to that uncertainty and became a negative distraction, and most likely impacted consumer sentiment.”
Many executives cited increased spending and consumer confidence in recent months and are optimistic it will continue in the coming year. “Much of the negativism…the questioning…that was around in 2016 has faded away,” said Bill Endres, president of Select Brands.
“The climate feels to have turned decidedly optimistic,” added Steidle.
President Trump It Is
With the U.S. presidential election now decided, the impact of the Trump administration could have mixed results for the housewares industry. Obviously, a trade war and tariffs would be detrimental for the industry, but other possibilities such as “interest rate increases and tax reform could help the economy and encourage business investment,” said Will Symonds, president of DKB Household USA Corp. “This would drive job growth, inflation, and consumer confidence.”
Needless to say, housewares executives will be watching the Trump agenda closely. But it’s important to note that housewares sales typically fluctuate less than the overall economy."
As Greg Cairo, IHA Board Chairman and president of Groupe SEB USA, reasoned, “Cooking and taking care of the home will continue to be part of everyday life. Consumers will want the best quality cookware and home appliances that fit their lifestyle. We will continue to innovate and offer consumers valuable products, great quality and durability at the best price.”
Retail in Transition
This year will continue to be a transitional time for both retailers and housewares manufacturers aspiring to give consumers a seamless buying experience regardless of the channel they are using.
“Many retailers are still in the mindset of thinking of online and offline as two separate channels,” said Cairo. “While other retailers have quickly adopted that the new normal of omnichannel is here, they are having to change the entire infrastructure of their consumer touch points to gear up for this shift.” Add in the newer, more agile online-only sellers, and you have an environment that Tony Kircher, president of Winix America & Winix Europe, called the “wild west of online retailing.”
Yet Kircher and others believe that this challenging environment actually represents the industry’s biggest opportunity.
“It’s all about using bricks and mortar to support online retailing and vice versa,” said Endres of Select Brands. “The most successful people in our industry will find a way to marry the two.”
Endres believes new models that help create a seamless shopping experience are on the horizon. “I believe there’s a smaller retailer out there that is up-and-coming that is going to have a profound impact on our industry,” he said. “Maybe it’s a hybrid of a bricks-and-mortar store with online ordering kiosks, but it will probably have a smaller footprint and be more educational in nature.”
While the transition period may not be smooth, “we are comfortable with the evolution to omnichannel retailing and see it as the avenue for faster and less expensive improvements to our brand awareness,” said Mark Buss, CEO of govino LLC. Added Rob Kay, chairman and CEO of Taylor Precision Products Inc., “Our philosophy is to have the product available everywhere we can, and leave it up to the consumer to decide where they would like to purchase.”
The Millennial Effect
No generation seems to get more attention than millennials. While their actual buying power is still limited, there’s no disputing they are at the forefront of many trends influencing the consumer marketplace. First is the increased role of digital marketing and the use of social media. According to Kris Malkoski, president, global business & chief commercial officer of World Kitchen, LLC, the result is a dramatic increase in her company’s digital marketing budget in this year. “Globally, our investment in digital and e-commerce…will double in 2017 over 2016,” she said.
Engaging those consumers online with authentic content – not advertising per se – that can be shared is key to millennials and, increasingly, other generations. “We’re successfully communicating with consumers through Facebook, Pinterest, Instagram and our GoodCook e-club, which is loaded with great content, recipes, how-tos, photos, contests and videos,” said Brett Bradshaw, president of Bradshaw International Inc.
These housewares executives are also planning to address millennials and their influence on the consumer marketplace in other ways including product customization, lower price points and updated branding and design.
The Role of Innovation
When business is booming – and even when it isn’t – housewares executives agree that close attention needs to be paid to keeping product offerings fresh and relevant to today’s consumers. That might mean brand new products, items that incorporate today’s technology or updated functionality and design.
“Innovation is the lifeline of the industry,” said Cairo. “New product offerings to make people’s lives easier, save them time or offer better solutions create a reason to purchase. New technology like apps and connected devices will create loyalty and continue to increase product usage. As manufacturers, we need to continue to innovate with the right solutions that make sense for our consumers and the market.”
Yet the retail industry’s current challenges don’t necessarily create the best environment for supporting innovation. “Some retailers are very resistant to playing an active role in launching new products and building the demand with the consumer,” said Evan Dash, CEO of Storebound. “At the end of the day, suppliers are left to spend all the money to market new product launches while absorbing all the risk from any retailers who decide to try to capitalize on early trends.”
It’s another case for leveraging all channels available – in addition to connecting with consumers directly through digital media. “The continued growth of e-commerce and omnichannel marketing is a huge opportunity around the globe,” concludes Malkoski. “China is even further developed than the U.S. and represents fun and exciting ways to get our message to our target consumers.”
Products from these executives’ companies and more than 2,200 other exhibitors will be on display at the 2017 International Home + Housewares Show March 18 – 21 at Chicago’s McCormick Place. To register for a show badge or for more information, visit www.housewares.org