Winter 2010 The Aging Consumer: Spending More on Small ... · rent economic situation. We may have...

continued on page 7

cent between 2000 and 2008. It now repre-sents 24 percent of the overall population,which grew by 8 percent in the same timeperiod. NPD’s Consumer Tracking Serviceshows consumers age 55+ accounted for 24percent of small appliance unit sales and 30percent of dollar sales in the 12 monthsending November 2009. As we note laterin this article, in addition to being a largeand growing cohort this group has thepotential to spend much more than theaverage consumer.

It’s true that small appliance sales aredown compared to the same time two yearsago (-12 percent in units and -8 percent indollars), but we see smaller declines whenfocused on this particular age group (-9percent in units, -5 percent in dollars).These numbers show that this segment ofthe population is one that is growing in sizeand importance.

The 55+ consumer spent an average of16 percent more on their small appliancepurchases between December 2008 andNovember 2009, and a few categories werewell above that 16 percent. This segment,representing the older half of the BabyBoomer generation and the generations thatcame before the boomers, spent about 20percent more than the average consumer onmen’s electric shavers and canister vacuums.This group is spending about 30 percentmore on items that add to their comfort,such as humidifiers and fans. Oral hygienealso appears to be important to older con-sumers, as they purchase electric tooth-brushes that cost 40 percent more than theaverage model and other electric oral careitems at double the price the average con-sumer spends.

Although the 55+ consumer may in

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 store, specialty store and drugstore (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.

Over the past two years we’ve beencaught up, and understandablyso, in the challenges of the cur-

rent economic situation. We may have for-gotten about an important consumertrend happening in our industry. TheU.S. population is aging, and with thisshift comes changes in consumers’ needs,desires, concerns and abilities.

According to the U.S. Census, the por-tion of the population age 55+ grew 22 per-

Winter 2010

The Aging Consumer: Spending More on Small AppliancesBy Peter Goldman, The NPD Group, Inc.

The 55+ consumerspent an average of16 percent more on

their small appliancepurchases between

December 2008 andNovember 2009

MW_Winter_09:Marketwatch 4/7/10 12:38 PM

� The average selling price of electricrotisseries grew to $127 in Q3’09, a 13% increase vs. Q3’08.

Source: Retail Tracking Service

SPECIALTYKITCHEN

ELECTRICS

� Combination type electric grills/griddles gained five dollar share pointsin Q3’08 vs’07, but lost a point and ahalf in Q3’09.


ELECTRIC GRILLS/GRIDDLES

� Burr coffee grinders aregrowing in share over blademodels, representing 28.6%of dollar sales in Q3’09.


COFFEE GRINDERS

Source: The NPD Group 2

Small Appliances: KITCHEN ELECTRICS

MARKET SIZEQUARTER THREE • 2009UNIT VOLUME IN THOUSANDS

TOTA

LMARKE

T

COOKI

NGEL

ECTR

ICS FOOD P

REP/

BEVER

AGE

Source: Consumer Tracking Service

21,729

9,509

12,220

DRIP COFFEEMAKERS

CENSUS (PERCENT OF POPULATION)

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

Five or More Members

TOASTERS


TOASTERS • HOUSEHOLD SIZEPercentage purchased by household size versus census

DEMOGRAPHIC ANALYSISUnit Volume Share

6 months ending — September 2009


DRIP COFFEEMAKERS • AGE OF BUYERPercentage purchased by age of buyer versus census


10.8

%

10.3

%9.

0 %

1.3

%

4.7

%

11.7

% 13.1

%

16.8

%

18.8

%

18.9

% 24.0

%

17.2

% 19.0

%

11.7

%

19.1

%

14.7

%

34.3

%

26.3

%

18.6

%

19.3

%

22.6

%

19.6

% 21.4

%

16.7

%


Source: The NPD Group3

Small Appliances: PERSONAL CARE


TOTA

LMARKE

T

ORAL CARE &

OTH

ER

PERSO

NAL CARE

HAIR C

ARE/

GROOMING


44,546

20,98723,559

� Mirrors with one or two lightsettings accounted for morethan half of the categorydollars in Q3’09.


LIGHTED MIRRORS

� Straighteners grew in dollar sharein Q3’09, compared to last year,and sell at more than double theaverage price of curling irons.


CURLING IRONS/STYLERS

� Hand-held and back/bodymat-type massagers continueto gain dollar share, both areup four points in Q3’09,compared to Q3’08.


MASSAGINGAPPLIANCES

FACIAL TRIMMERS


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 + Teens withNo Income

NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

FACIAL TRIMMERS • REGIONPercentage purchased in region versus census




SHOWER HEADS • INCOMEPercentage purchased by income versus census


4.3

% 4.9

%

6.3

%

11.1

%

13.4

%

12.9

%

16.6

%

16.1

%

14.6

%

13.7

%

15.2

%

11.3

%

11.5

%

14.3

%

13.2

%

11.3

%

6.5

%

3.5

%

0.0

%

13.5

%

14.1

% 15.9

%

15.9

%

6.1

% 6.8

%

17.8

% 18.6

%

8.6

%

12.9

%

7.5

%

6.0

%

11.3

%

5.1

% 6.6

%

17.0

%

15.7

%

SHOWER HEADS




Small Appliances: HOME ENVIRONMENT(EXCLUDING VACS)



TOTA

LMARKE

T

23,932

� Utility heaters nearlydoubled in dollar sharecomparing Q3’09 andQ3’08.


HEATERSAIR PURIFIERS


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

Five or More Members

AIR PURIFIERS • HOUSEHOLD SIZEPercentage purchased by household size versus census




AIR PURIFIERS • AGE OF BUYERPercentage purchased by age of buyer versus census


15.7

%

10.3

%

7.5

% 9.0

%

14.7

%

29.0

%

26.3

%

19.5

%

19.3

%

12.8

%

22.6

%

23.0

%

21.4

%

24.4

%

11.7

%

19.1

%

16.8

%

7.6

%

18.9

% 20.3

%

17.2

%

9.6

% 11.7

%

11.6

%

AIR PURIFIERS



Source: The NPD Group5

Small Appliances: FLOOR CARE



TOTA

LMARKE

T

8,017

� Bagless upright vacuumsrepresented 87% of dollarsales in Q3’09, down slightlyfrom the previous year,partially due to a $10 declinein average selling price.


UPRIGHT VACUUMS

DEEP CARPET CLEANERS


Male Female

NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

DEEP CARPET CLEANERS • REGIONPercentage purchased in region versus census




DEEP CARPET CLEANERS • BUYER GENDERPercentage purchased by buyer gender versus census


2.8

%

4.9

%

19.5

%

18.6

%

14.5

%12.7

%

15.7

%

11.3

%

7.1

%

6.6

%

6.0

%

6.2

%

6.8

%

5.9

%

15.9

%17.6

%

14.1

%

13.6

%

58.7 %

51.1 %

DEEP CARPET CLEANERS


48.9 %

41.3 %



Housewares: NON-ELECTRIC



10,0

75

6,98

6

3,03

7

1,93

1

1,77

7

DINNERWARE

BEVERAGEWARE

COOKWARE

BAKEWARE

FLATWARE

CUTLERY

3,73

9

� The top three reasons consumerspurchased stovetop cookware inQ3’09 were price, good value and easy to clean.


STOVETOPCOOKWARE

� Open Stock flatware dollar salesgrew 10% in Q3’09 vs Q3’08.


FLATWARE

� Pie dishes, springform pans and loafpans each grew by more than 5% indollar sales compared to Q3’08


BAKEWARE

FLATWARE


13 – 17 years

18 – 24 years

25 – 34 years

35 – 44 years

45 – 54 years

55 – 64 years

65 years +

NewEngland

MiddleAtlantic

East NorthCentral

West NorthCentral

SouthAtlantic

East SouthCentral

West SouthCentral

Mountain Pacific

FLATWARE • HEAD OF HOUSEHOLD AGEPercentage purchased by age of head of household versus census




BEVERAGEWARE • REGIONPercentage purchased in region versus census


9.0

%

0.0

%3.

1 %

4.9

%

13.5

%

6.0

%

8.0

%

6.8

%

5.4

%

15.9

%

14.1

%

16.1

%

5.9

%

18.9

% 24.4

%

15.0

%16.8

%

21.0

%

11.7

%

19.4

%

17.0

%

18.6

%

17.2

%14

.1 %

12.4

%11

.3 %

11.7

%

15.7

%

10.1

%

14.5

%

14.7

%

6.6

%

BEVERAGEWARE



coffee grinders, toaster ovens,slow cookers, electric skillets andbare floor cleaners. Homing inon these commonly used cate-gories where the 55+ consumermakes up a disproportionateshare of the dollar sales, thereare a few potential explanations.These consumers have told usthat as they age brand and fea-tures grow more important.The 55+ group may be migrat-ing to the premium segmentbecause of the status a productaffords them. Perhaps theirincome allows them to be morebrand aspirational, bringing withthat the features that offer easeof use, convenience and ulti-mately, the best toys! It may be

as simple as a desire to enjoy the finerthings as they enter a new life stage, a timewhen they can focus on themselves, andtheir own wants and needs.

Despite the possibility offuture income concerns, agingconsumers certainly are a sourceof valuable opportunities intoday’s marketplace. Given theirpotential for establishedlifestyles, disposable income,brand aspirations, demographicsize and purchase influence,these consumers represent a vastresource of purchase potentialand they will play a large role inproviding a boost to business foryears to come, even in an econo-my that is slowly recovering.Given this group’s purchasepower, plus the foregone con-clusion that the 55+ cohort willgrow in size as more BabyBoomers join its ranks, it is criti-cal that we do not lose sight ofthe opportunity this group rep-resents.

some cases be approaching or even beyondretirement age and could be concernedabout their “nest egg” in today’s economy,it seems that overall the group emphasizesthe value of the things they purchase overthe price. Small appliance consumers age55+ told NPD that features, price andbrand are the most important criteria inmaking a purchase. However, what happensto the importance of these purchase motiva-tors with age is also worth considering.

As this demographic ages, brand and fea-tures continue to increase in importance,while price becomes less of a factor. Inaddition to brand and features, value, easeof use and promotion also become increas-ingly important with age. Alternately, price,product appearance, friend/family recom-mendation and performance become lessimportant as the consumer ages. The focusseems to be on brand trust and getting thefunctionality (features) they want for a pricethey feel is fair.

Other areas where the 55+ consumercurrently over-indexes (40 percent or moreof dollar sales) include drip coffeemakers,

7

The Aging ConsumerContinued from page 1

We’ve all been hunkered down, reactingto a challenging economy, rightfully so.However, perhaps it is time to re-focus ourenergy on this highly lucrative target demo-graphic – and what may be the biggestmarketing opportunity in our lifetime –rather than continuing to focus on what wasthe biggest recession of many of our life-times!

Peter Goldman is president of the Home Section at The NPD Group. These arethe opinions of Goldman and NPD. For more information, contact Goldman at 516-625-6136.

Source: The NPD Group

March 6 - 8 • McCormick Place, Chicago


8Source: The NPD Group

ABOUT THE NPD GROUP, INC.

The NPD Group, Inc. (NPD) is a glob-al market information company thatmeasures product movement and con-sumer behavior across a broad rangeof industries -- apparel, automotiveproducts, consumer electronics, cosmet-ics and fragrances, food, foodservice,footwear, housewares, information tech-nology, interactive entertainment, toysand music. NPD's clients, many in theFortune 500, use this insight to uncovermarket opportunities, strengthen chan-nel relationships and benchmark indus-try performance. Since 1967, NPD hasintroduced numerous industry firsts,most recently combining and calibratinginformation from consumer panels andpoint-of-sale tracking via its flagshipservices, the NPD Worlds. The firm hasoffices and affiliations in 60 countries.For more information on The NPDGroup, visit 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 assem-bled from retailers' records of actual sales byproduct as collected at the cash register.These databases are highly reliable and pro-vide census counts of sales by product andprice for participating retailers. The complet-ed sales data are valuable to clients trying tounderstand which products or items are sell-ing well and which are not, at which pricesand in which channels. The finished POSdata describe the product, retail channel andprice. They do not, however, address thebuyer of the product.

Consumer databases are developed usingproduct purchase surveys completed by alarge-scale rotating sample of consumers.

These data also produce estimates of sales byproduct and retail channel. More importantly,the consumer surveys capture informationabout each purchase, such as buyer demo-graphics, the product's intended use and avariety of other characteristics. These factshelp clients understand why products are sell-ing and consumers' motivations.

CONSUMER METHODOLOGYMost consumer data in the U.S. are gath-

ered from periodic samples of individuals whoare asked about their recent purchases.Respondents report certain details about thetype and nature of their purchases in a surveyadministered via the Web. The respondingsample is demographically weighted and pro-jected through a series of steps to representthe Total Adult (18+) and, for appliances,Total Teen (13-17) U.S. population.

Each week, over 35,000 individuals areselected from the NPD online consumer panel

to participate in the appliancestudy. Each month, over 30,000U.S. households are selected forthe housewares study.

The NPD online consumerpanel is composed of pre-recruited individuals who haveagreed to participate in NPDonline surveys and have com-pleted a comprehensive demo-graphic questionnaire. The useof an established online panelassures good cooperation levelsand predictable demographicbalance among cooperators.

POS METHODOLOGYNPD collects point-of-sale

retailer data from selected retail-ers. These data are the actualsales for the chain on an SKU-by-SKU basis. The data arecombined with data from otherretailers to produce reports oncertain categories by channel,where a sufficient number ofretailers are cooperating andwhere sufficient market demandexists for the database.

Deborah A. Teschke, Senior EditorPeter Goldman, 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


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