I just finished writing my 12th annual housewares trend report and once again the trend that will have the biggest impact on the housewares industry in 2014 is related to the impact the recession and subsequent slow uneven economic recovery is having on consumer spending habits.
The first time I surveyed the HomeTrend Influentials about the economy back in June 2009, 36% said they were more worried about money and what the future may hold they had been in 2008. Only 16% said they were less worried than they had been the previous year. In Housewares TrendTracker 2009, I wrote, “The consumer trends that will have the biggest impact on housewares and home goods manufacturers and retailers all tie back to the recession, how Americans are reacting to the economic downturn and what they are spending their money on.”
Not much has changed in five years. Americans are still worried about money and what the future may hold. In fact, when I surveyed the HomeTrend Influentials in October, 39% said that they are more worried about money and what the future may hold that they were at this time last year while only 11% are less worried.
Frugality is the New Normal
The recession shook most Americans to the core and fundamentally changed their spending priorities. The uneven economic recovery since the recession officially ended in 2009 fundamentally changed their spending habits.
Unlike past recessions, consumers have not gone back their pre-recession spending levels nor will they when the economy finally starts to improve. They have made fundamental and long-term changes in their spending habits. They’ve had to be frugal for so long with no end in sight that frugal spending behavior has now become a fairly deeply entrenched habit.
Findings from the Deloitte 2013 American Pantry Study sum up the mindset of today’s consumers. 94% of respondents said they will remain cautious even if the economy improves. 80% said they are looking closely at every spending category to see where they can save. 72% said that even though they are spending less on products now, it doesn’t feel like they’re sacrificing much.
Today’s Frugal Consumers Are Not Buying as Many Housewares Products as They Used to
Today’s frugal consumers are not buying as many housewares products on impulse as they used to. They are not replacing worn-out items as quickly as they used to. They are holding off on purchasing new housewares products until they can find them on sale.
Today’s frugal consumers may not be buying as many housewares products as they used to. But that doesn’t mean they are not buying at all.
Today’s frugal consumers are buying housewares products that save them money. For example, the SodaStream carbonated beverage maker is selling well despite the down economy in large part because it delivers a cost-saving benefit. 25% of HomeTrend Influentials purchased a carbonated beverage maker in the past year and 9% plan to purchase one in the next year.
Today’s frugal consumers are buying housewares products that meet unmet needs. For example, tablet stands, holders, and covers designed specifically for use in the kitchen are selling well because they meet a need. Two thirds of HomeTrend Influentials who use their iPad or tablet device as a cookbook purchased a stand, holder, or cover in the past year to hold and protect their tablet.
What Housewares Manufacturers Must Do to Get Today’s Frugal Consumer to Buy Their Products
The housewares manufacturers who are going to not only survive but thrive in the era of the frugal consumer are the ones that focus on developing new housewares products that will save consumers time, money, or both. They will spend time and energy uncovering unmet (or undermet) consumer needs and unsolved consumer problems and then will create products that meet the unmet need or solve the unsolved problem.