LAS VEGAS — It's a rough field out there for housewares retailers and manufacturers as competition gets fierce and their target customers become fragmented into a proliferation of life styles, age and income levels.
"There are plenty of danger signals but the opportunities are tremendous," said Malcolm Sherman in his keynote address to members of the housewares industry during the First House World Expo recently held at the Las Vegas Convention Center.
Director for the National Mass Retail Institute and former chairman of Zayre Stores, Sherman said that the end of a period of stability is nearing, with some deflation in retail prices. As a consequence, he said "a tough trade bill--almost a certainty, a continuing lower-value dollar increasing the cost of imports; higher oil costs, etc., all conspire to suggest some retail inflation is ahead just as we all have learned to live with stability or deflation.
"The low-cost operator will be king," he continued. "Huge operations with very low margins such as Price Club and B. J.'s Wholesale Club are hitting pieces of the business."
A Shrinking Market
Another trend affecting the industry is that the middle market that has given business to mass merchants and discounters has been shrinking.
"The middle class that used to be the bread and butter of the Sears and J. C. Penney's of the world is getting squeezed, not quite through extinction, but certainly through rarity, by more affluent yuppies, dinks (double income no kids)," said Ike Lagnado, director of research and store statistics, Associated Merchandising Corp. during a conference session on consumer demographics.
Focusing merchandise groupings on specific targets or specialty retailing could be a successful route, Lagnado suggested. He cited as an example the fantastic growth of San Francisco-based Williams-Sonoma, which specializes in kitchen accessories.
Providing excitement inside the store can also get you that customer in addition to improving service, he added. Other industry leaders suggested the development of more eye-catching and colorful packaging--as the saying goes "unseen is unsold"--and identifying and weeding out slow growth lines (as some small electrics and cookware) more quickly.
The importance of the bridal registry was also stressed, with research showing the tremendous allegiance by consumers to it.
Popularity of Weddings
According to Carl Schichili, Midwestern and Western manager for Modern Bride magazine, marriage as an institution is far from being on the rocks and women want traditional expensive weddings. He estimated that $21 billion was spent last year on weddings, honeymoon trips and necessities. The bridal market also has the highest acquisition rates for kitchen electrics and all the good things the young couple have grown up with.
Another challenge for the housewares industry is to pick the right product trend while at the same time establishing the product's uniqueness. In an attempt to forecast the hot product categories for 1988, a group of panelists in one of about 19 conference sessions discussed some housewares key points as well as 1987 trends:
"It's important to remember that trends in housewares are very cyclical," said Ian Gittlitz, editor in chief/publisher of Housewares magazine. And there is always some new item coming up, he said. "This is what keeps the industry very young: an Oskar food processor one year, a clothes shaver (a battery-operated tool for removing fuzz from clothing) the next.
"White and almond were the dominant housewares colors for the past several years," added Gittlitz, who acted as chairperson at the session. "This year slate blue and mauve became strong as well as gray."
Don Kracke, managing director of the Center for Homewares Design, agreed but said, "I cannot ever believe that a single design direction is going to satisfy everyone." In appliances he strongly suggested interchangeable decorative insert paneling that could come as a kit and would offer design options to the consumer.
"Westwind" or Southwest style (vivid pastels and earth tones in geometric designs) which is doing well in fashion, is also being applied to home furnishings, textiles and area rugs, Kracke said. "There will always be country," he added, and that the goose or duck will still be favored.
"At the end of 1988 to 1989 I see a dominant black and white with a major accent color. If I had one dart to throw, I'd go after a black-and-white cow," he said.
Character licensing was another major trend. "For the past few years, its been widely believed that licensing was dead in housewares," Gittlitz said, "suddenly along came Spuds Mackenzie this summer, a runaway success for Libbey Glass."