Posted on November 10, 2011 by
By David Gill
Housewares companies that are doing well, both on the manufacturing and retail side, are the ones that are defining their markets and delivering their products to consumers in appealing ways, said Ken Harris, CEO of Kantar Retail Americas Consulting, at last month's Chief Housewares Executive Supersession (CHESS).
Harris' observations were among a number of presentations about doing business in housewares that were offered at the conference, which was held by the International Housewares Association in the Chicago suburb of Rosemont, Ill., where IHA is headquartered. Along with Harris, conference attendees heard presentations from Kip Tindell, chairman and CEO of The Container Store; Sandy Lincoln, chief market strategist with BMO Asset Management; Sima Dahl, president and CEO of Parlay Communications; and others.
Consumers' changing shopping habits have made it increasingly necessary for vendors and stores to be compelling in their efforts to sell, Harris said. "Consumers are more frugal," he said. "They are making more choices, in particular the choice of 'Do I buy at all?' For housewares, this is where the tire hits the road, because people will replace their housewares and will go with quality."
The increasingly watchful eye shoppers are using on their budgets explains why the industry's growth at retail is being driven by discounters, warehouse clubs and online retailers, Harris said. The growth of online provides a crucial opportunity for the industry in the years to come; Harris projected that online's share of the housewares take will rise from 8 percent currently to more than 40 percent by 2020. "Housewares are ideally suited to online," he said. "There is a high replenishment factor, inconsistent product availability at typical outlets, episodic involvement and ease of comparison."
Tindell, who delivered the keynote address on CHESS' first day, described how The Container Store is oriented around "conscious capitalism," a movement that has united CEOs of a number of business enterprises around the principle of advancing corporate performance and enhancing people's quality of life. As explained on the movement's website, consciouscapitalism.org, this movement orients businesses around a higher purpose beyond profit maximization, managing an organization for the benefit of all of its stakeholders (investors, employees, customers, suppliers and the communities in which the business has locations), leading with a holistic world view beyond business concerns and creating a company culture that embraces trust, authenticity, caring, integrity, learning and employee empowerment.
"This is our profit strategy," said Tindell, who serves as an "ambassador" for the movement. "We create long-term, mutually beneficial relationships with our vendors. We put our employees first, and we balance the needs of our shareholders, our employees and our communities."
In his speech, Lincoln described the occurrences leading to the volatility of the world economy since the summer, and their effect on U.S. consumers. He detailed the "massive regurgitation" of government spending throughout the world, leading to higher government deficits versus gross domestic product, and the debt crises that have afflicted Greece, Italy and Spain. "These macro forces have overwhelmed corporate America and what the consumer is doing," Lincoln said.
In spite of these crises, "U.S. consumers are holding steady," Lincoln said. "They have paid down debt. They still account for 69 to 70 percent of the economy, even on big-ticket items. Gas prices are down and there have been price declines on staples." Looking ahead, Lincoln said he believes there will be slow growth in the U.S. economy.
In her address, Dahl spoke of the growing importance of social media in business. "It has created a social revolution in which consumers take hold of the brand," she said. "You want to get in the game? You do it by create a conversation (on social media) about your brand."
Dahl estimated that there are 1 billion people on social networks on any given day, and recommended three strategies for "getting cozy with your customers: Make your case for your social-media objectives. Find out what social-media sites your customers are using. Tune in to what they are saying, and let them tell you what they are talking about."
From here, Dahl said, a company can "contribute to the social stream. Select a channel. Assess your content. Start a conversation." The most important goal in a social-media strategy is to build a network of "brand champions"--consumers who will push a brand to other social-media users. "The brand is you and this is the age of referral," she said. "Social networking is the amplifier for it all--sales, marketing and the brand."