Quarter 1, 2012 Marketing to Millennials – A Retro Approach · Marketing to Millennials – A Retro Approach By Perry James, The NPD Group, Inc. Millennials are clearly an important

continued on page 8

another 16 percent. In the 12 months end-ing March 2012, 18 to 34-year-oldsaccounted for 26 percent of small applianceand 30 percent of non-electric housewarespurchases. At more than a quarter of themarket, Millennials are clearly an importantsegment that demands attention in order tomaximize their yield today and beyond.

Segmenting this group further, 18 to 24-year-olds increased their small appliance dol-lar spending by 3 percent in the 12 monthsending March 2012, while 25 to 34-year-olds spent less compared to the previousyear. Both segments increased housewaresspending during this timeframe. This is agroup of consumers that can have a realimpact on business for many years to come,so understanding and engaging them now isessential.

In many cases Millennials are purchasingsmall appliances and housewares productsfor the first time, so they are in need of

information and education to help themfind the right product for them. As wouldbe expected in the current economic condi-tions, price and good value are the topmotivators for Millennials when deciding topurchase a specific small appliance or house-wares item. Within small appliances, thesefactors—and the focus on trusted brands—have increased in importance to 18 to 34-year-olds in the past year. Those same pur-chase motivators have become less impor-tant to this group when purchasing house-wares products, while factors like coordinat-ing with other products owned and beingeco-friendly have captured more of theirattention.

In-Store ExperienceIsn’t Dead Yet

Millennials are aware of, educated onand influenced by various trends in today’s

About Housewares MarketWatchHousewares MarketWatch reports

both point-of-sale (POS) and consumerdata from NPD databases. The quarterlydata covers various product categorieswithin the divisions of Small Appliancesand Non-electric Housewares.

The information contained on the following pages is offered as a snapshotof a category’s performance, both fromthe retailer (POS) and consumer perspectives. The POS data covers theretail channels of mass/national chains,department stores, specialty stores anddrug stores (personal care and homeenvironment only). Each issue ofHousewares MarketWatch will featureseveral categories from the SmallAppliances and Housewares divisions.

Complete data on a category can bepurchased by visiting NPD’s website atwww.npd.com.See the Data andMethodology section on page 8 for anexplanation of how the data is compiled.

Millennials have become an area offocus for many marketers. Born inthe early 1980s or later, and also

known as Gen Y, these consumers can begetting ready for college, starting a family oftheir own or anything in between, makingthem a uniquely challenging, but opportu-nity-rich target audience.

According to the U.S. Census, 18 to 24-year-olds represent nearly 12 percent of thepopulation and 24 to 34-year-olds represent

Quarter 1, 2012

Marketing to Millennials – A Retro ApproachBy Perry James, The NPD Group, Inc.

Millennials are clearly animportant segment thatdemands attention inorder to maximize theiryield today and beyond.

■ The top three reasons consumerspurchased a specific brand of toasteroven were the price, it was a brandthey trust and it was a good value.

TOASTER OVENS

■ More than 10% of juiceextractors sold in Q1’12had 3 or more speeds.

JUICEEXTRACTORS

■ 6% of hand mixerssold in Q1’12 had10 or more speeds.

Source: Consumer Tracking Service

Source: Retail Tracking Service


HANDMIXERS

Source: The NPD Group 2

MARKET SIZEQUARTER ONE • 2012UNIT VOLUME IN THOUSANDS

Small Appliances: KITCHEN ELECTRICSTO

TAL

MARKET

FOOD PR

EP/

BEVER

AGE COOKIN

G &

SPEC

IALTY

ELECT

RICS


27,263

12,87314,390

Male Female

Single Member

Two Members

Three Members

Four Members

Five or More Members

FOOD PROCESSORS

CENSUS (PERCENT OF POPULATION)

ELECTRIC GRILLS


ELECTRIC GRILLS • BUYER GENDERPercentage purchased by buyer gender versus census

DEMOGRAPHIC ANALYSISUnit Volume Share

6 months ending — March 2012


FOOD PROCESSORS • HOUSEHOLD SIZEPercentage purchased by household size versus census


13.0

%

41.7 %

35.4

%

10.5

%

26.4

%

21.8

%

19.5

%

14.9

%

58.3 %

22.1

%

50.9 %

14.8

%

49.1 %

21.5

%

Source: The NPD Group3


Small Appliances: PERSONAL CARETO

TAL

MARKET

HAIR CA

RE/

GROOMING

ORAL CARE,

HOME

HEALTH

, & O

THER

PERSO

NAL CARE


59,327

27,74731,580

IRONS


NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

Under$15,000

$15,000 –29,999

$30,000 –44,999

$45,000 –59,999

$60,000 –74,999

$75,000 –99,999

$100,000 –149,999

$150,000 +

MASSAGING APPLIANCES


MASSAGING APPLIANCES • INCOMEPercentage purchased by income versus census




IRONS • REGIONPercentage purchased in region versus census


14.6

%

14.3

%

4.3

%

4.8

%

13.6

% 14.7

%

15.5

%

4.0

%6.

7 %

23.3

%

19.3

%

8.1

%

5.9

%

11.4

%

5.5

%

15.7

%

7.1

%

13.1

%

12.4

%

24.8

%

9.4

%

12.1

% 14.0

% 15.1

%

13.9

%

13.0

%

9.0

%

11.1

%

6.2

%

13.2

%

16.4

%

14.1

%

3.6

%

9.7

%

■ The top three reasonsconsumers purchased a specificbrand of lighted mirrors werethe price, liked how it looksand it was a good value.

LIGHTED MIRRORS

■ 65% of men’s electricshavers sold in Q1’12 were triple head/foil.

MEN’S ELECTRICSHAVERS

■ 17% of showerheadssold in Q1’12 hadsix or more settings.




SHOWERHEADS

■ 59% of air purifiers sold inQ1’12 were tower style.


AIR PURIFIERS

■ The top three reasons consumerspurchased a specific brand of airpurifier in Q1’12 were the price,features and it was a brand theytrust.


AIR PURIFIERS



Small Appliances: HOME ENVIRONMENT(EXCLUDING VACS)


TOTA

LMARKE

T

20,393

0

5

10

15

20

25HEATERS


13 – 17 years

18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

Under$15,000

$15,000 –29,999

$30,000 –44,999

$45,000 –59,999

$60,000 –74,999

$75,000 –99,999

$100,000 –149,999

$150,000 +

HEATERS


HEATERS • AGE OF BUYERPercentage purchased by age of buyer versus census




HEATERS • INCOMEPercentage purchased by income versus census


11.6

%

8.9

%

9.4

%

20.9

%

14.3

%

24.4

%

15.1

%

17.5

%

16.1

%

17.8

%

13.0

%18

.1 %

15.5

%

17.4

%

10.3

%

13.2

%

11.1

%

15.2

%

12.6

%

14.7

%

13.2

%

16.3

%

11.9

%

15.2

%

14.1

%

6.3

%

3.9

%

8.9

%

9.7

%

3.4

%



Small Appliances: FLOOR CARE

■ 52% of upright vacuums sold inQ1’12 were cyclonic.


UPRIGHT VACUUMS

■ The top three reasons consumerspurchased a specific brand of uprightvacuum in Q1’12 were the price, thefeatures and it was a brand they trust.


UPRIGHT VACUUMS


TOTA

LMARKE

T

9,033

DEEP CARPET CLEANERS


13 – 17 years

18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

Single Member

Two Members

Three Members

Four Members


DEEP CARPET CLEANERS


DEEP CARPET CLEANERS • HOUSEHOLD SIZEPercentage purchased by household size versus census




DEEP CARPET CLEANERS • AGE OF BUYERPercentage purchased by age of buyer versus census


12.7

%5.

0 %

16.3

%

16.6

%17.8

%

8.3

%

34.9

%11

.6 %

26.4

%

8.9

%

20.6

%

17.5

%19

.5 %

18.1

%

15.8

%17

.8 %

22.1

%18

.5 %

16.0

%

13.2

%

21.5

%

15.7

%

10.5

%

14.7

%

■ The top three reasons consumerspurchase specific bakeware in Q1’12are price, good value and easy to clean.

OVEN ORMICROWAVEBAKEWARE

■ 14% of Q1’12 flatwaredollar sales came fromplace settings.

FLATWARE

■ 2% of cookware sold in Q1’12 wasPTFE/PFOA free.




COOKWARE


MARKET SIZEQUARTER ONE • 2012DOLLAR VOLUME IN THOUSANDS

Housewares: NON-ELECTRIC


STOVETOPCOOKWAREDINNERWARECUTLERY OVEN ORMICROWAVEBAKEWAREBEVERAGEWARE FLATWARE

$810

,438

$251

,376

$222

,752

$181

,600

$179

,865

$127

,020

FLATWARE


NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

Single Member

Two Members

Three Members

Four Members


DINNERWARE


DINNERWARE • HOUSEHOLD SIZEPercentage purchased by household size versus census




FLATWARE • REGIONPercentage purchased in region versus census


22.1

%

5.9

%

3.2

% 4.8

% 6.7

%

13.8

%

1.2

%

13.6

%

4.7

%

15.5

%

21.9

%

38.0

%

19.3

%

10.5

%

5.2

%

16.7

%

11.4

%

26.4

%

11.4

%

16.9

%

7.1

%

19.5

%

7.1

%

13.5

%

15.7

%

14.8

%

16.6

%21

.5 %


QUARTER ONE • 2012

Home: KITCHEN & DINING TEXTILES

Find Exhibitors and Do Business Year Round atwww.housewares.org/housewaresconnect365

• Search for new suppliers

• Find the latest new products

• Plan your Show visit

■ More than 8% of kitchen & diningtextiles dollar sales came from onlinepurchases for the six months endingMarch 2012.


KITCHEN & DININGTEXTILES

PLACEMAT/NAPKIN SET • COLOR OF KITCHENPercentage of unit volume share by color of kitchen




PLACEMAT/NAPKIN SET


15.7 %

White Light Color - Solid Dark Color - Solid Pattern or Print Other

32.5 %

29.4 %

13.8 %

8.7 %

2013

MARK YOUR CALENDAR!

to register:www.housewares.org/attend


MARKETING TO MILLENNIALScontinued from page 1

marketplace. They pay attention to style,image and brand as well as price and value.Retailers and manufacturers can play a com-plementary role, alongside peer and parentalrecommendations, guiding these consumersthrough the decision tree and helping themunderstand what they need, while conveyinga message of “fashionable savings.”

Online dollars accounted for 13 percentof small appliance sales and 8 percent ofnon-electric housewares sales across all agegroups in the 12 months ending March2012. Surprisingly, older consumers aremore likely to purchase these productsonline. Eleven percent of Millennial smallappliance dollars were spent online, upslightly from the previous 12 months. Sixpercent of the dollars spent by Millennialson non-electric housewares products camefrom online purchases, remaining flat com-pared to the 12 months ending March2011. The older half of this generation, age25 to 34, is more likely to make purchasesonline than their younger counterparts, buteven they aren’t doing as much onlineshopping as consumers aged 35 and up.The in-store experience isn’t dead yet; justlook at the traffic that goes through anApple store.

Among 18 to 34-year-olds who madesmall appliance purchases online, most ofthe pre-purchase research done was onproduct review websites, followed by retailerwebsites. Millennials who purchased smallappliances online between April 2011 andMarch 2012 over-indexed on doing pre-purchase research through social networksand blogs, but these methods are not yetwidely used even among Millennials. MostMillennials who did pre-purchase researchfor a small appliance item did so by visitingstores to see the product. This is a genera-tion that is hungry for information anddirection, but is taking a more traditionalapproach to educating themselves and mak-

ing purchases, possibly lookingfor a more of an experience andan opportunity to interact withproducts and people directly.

Shopping Behavior isContrary to Expectations

Approximately 90 percent of18 to 34-year-olds who visited astore to see a product or ask aquestion went on to purchase theitem in the store, and 6 percent purchased iton the Web, indicating very little “show-rooming” is currently occurring among thisage group. This behavior is contrary to theexpectation of this young generation, somarketers may need to adjust their mindsetin order to connect with these consumers,creating messaging and personal approachesthat will not just promote, but really get theconsumer involved with the product.

The Millennial generation is in a con-stant state of change, due in partto the sheer nature of their youthbut also as a result of the challeng-ing economy that surrounds them.They are facing a growing burdenof student debt, a shrinking jobpool and the worst economicrecession since the GreatDepression. Despite all of this, TheEconomy Tracker, our resource formonitoring consumers’ perceptionsof the U.S. economic environ-ment, shows Millennials are moreoptimistic than any other agegroup right now.

This is a tech-savvy generationthat is shopping online less thantheir parents and grandparents,they are conscious of cost andtrends and in some cases, they putimportance on brand as well. Thatfocus on a trusted brand implies aloyalty that could be even more

valuable if captured now, in the early phaseof their spending potential. The optimismand confidence that the Millennials possessare key points for manufacturers and retail-ers to be aware of as they make use of cre-ative new approaches to gain the attentionof, and keep up with, this unique andimportant group of consumers.

Perry James is president of Home & OfficeSupplies at The NPD Group. These are theopinions of James and NPD. For more information, contact James at 516-625-2349.


ABOUT THE NPD GROUP, INC.

The NPD Group is the leadingprovider of reliable and comprehensiveconsumer and retail information for awide range of industries. Today, morethan 1,800 manufacturers retailers andservice companies rely on NPD to helpthem drive critical business decisions atthe global, national, and local marketlevels. NPD helps our clients to identifynew business opportunities and guideproduct development, marketing, sales,merchandising, and other functions.Information is available for the follow-ing industry sectors: automotive, beauty,commercial technology, consumer tech-nology, entertainment, fashion, foodand beverage, foodservice, home,office supplies, software, sports, toysand wireless. For more information,contact us or visithttp://www.npd.com/.

DATA AND METHODOLOGYNPD has a standard data model that is used

for all categories that incorporates both con-sumer and point-of-sale (POS) databases.These two data sources are highly comple-mentary and are used to support one another.Point-of-Sale (POS) databases are assembledfrom retailers' records of actual sales byproduct as collected at the cash register.

Consumer databases are developed usingonline purchase surveys completed by a large-scale rotating sample of consumers. Thesedata produce estimates of sales by product forthe total marketplace. Moreimportantly, the consumer sur-veys capture information abouteach purchase, such as buyerdemographics, the product'sintended use and other purchasemotivators.

CONSUMERMETHODOLOGY

The NPD online consumerpanel is comprised of pre-recruit-ed individuals who have agreed toparticipate in NPD online surveysand have completed a compre-hensive demographic question-naire. The use of an establishedonline panel assuresgood cooperation levelsand predictable demo-graphic balance amongpanelists.

Consumer panelistsare asked about theirrecent purchases in asurvey administered viathe Internet. Theresponding sample isdemographically weight-ed and projectedthrough a series of stepsto represent the U.S.population. Eachmonth, over 200,000individuals are selectedfrom the NPD onlineconsumer panel to par-ticipate in the appliance

study. Each month, over 30,000 U.S. house-holds are selected for the housewares andhome textiles studies.

POS METHODOLOGYNPD collects point-of-sale retailer data

from selected retailers. These data are theactual sales for the chain on an SKU-by-SKUbasis. The data are combined with data fromother retailers to produce reports on certaincategories by channel, where a sufficientnumber of retailers are cooperating andwhere sufficient market demand exists forthe database.

Deborah A. Teschke, Senior EditorPerry James, Contributing EditorJanine Marshall-Bolton, Contributing EditorTom Goodman, DesignPublished by IHA

For more information, contact Debbie Teschke at 847-692-0110; [email protected]

6400 SHAFER COURT, STE. 650ROSEMONT, IL 60018 USATEL: 847-292-4200 FAX: 847-292-4211www.housewares.org

Documents

Quarter 1, 2012 Marketing to Millennials – A Retro Approach · Marketing to Millennials – A Retro Approach By Perry James, The NPD Group, Inc. Millennials are clearly an important