By Kathleen Kemmet
The home care products industry, which includes household cleaners, laundry care items and air fresheners, has been relatively stable, with about $24 billion in sales and 1.2 percent dollar growth in the past year. But shoppers themselves are changing. Personal experience has become a key component of almost any shopping expedition, with targeted messaging, innovation and enhanced value being necessary by brands in order to continue to win sales and customer loyalty. What is resonating with these product shoppers and how can this help your brand?
Overall, household cleaning products continue to be dominated by big national brands. In fact, 13 $500+ million brands have 52 percent of the household cleaning dollar sales in the U.S. However, while dollar growth is slightly up, unit sales are declining. This is because there is a lot more portion control/unit dosing to help consumers either manage ‘per load’ costs or help drive ease of use when cleaning.
Innovation, private label and e-commerce, in particular, currently offer some of the best opportunities for growth in home care products.
Aligning innovation with key consumer trends allows manufacturers to charge premiums over the competition. These three trends are currently driving home care product success:
- Simplicity – Convenience is hugely important to time-starved consumers, and it is largely considered a cost of entry. Products that make everyday tasks more convenient and simplified designs are helping to streamline life for consumers. And simplicity isn’t just about convenience. It’s about products that are less processed, contain fewer chemicals and are more natural.
- Experience – Consumers are looking for new ways to add excitement, enjoyment and indulgence into their daily lives, and they want to get these rewarding moments within their already-squeezed budgets. Even mundane, everyday tasks have the opportunity to provide small escapes from the daily grind. Sensory stimulation, in particular, works wonders, proven by the growth in the overall air freshener category (+3.0% in dollar sales versus a year ago in IRI’s multi-outlet geography).
- Expectations – The idea of more powerful household cleaning products is not new though it’s a trend that continues to pick up steam. Even so, consumers are not willing, and can‘t afford, to sacrifice results. Innovation in home cleaning makes professional quality products more affordable for all, as technology and know-how seem to continually be raising the bar on innovations entering the marketplace.
Of course, innovation does not have to substantially change the underlying product. Large premiums can be achieved by simple alterations, such as packaging, pack size or the combination of products.
Private label is another area for growth. Compared to total store and other departments, the development of home care private label products is relatively small (7.7 percent, +1.3% vs. PY), suggesting a good opportunity for growth in this space. In some categories in the store, private label share is well developed and growing, such as in refrigerated goods (30 percent, +3.7% versus prior year), health (23 percent, +2.9% versus prior year), general merchandise (22 percent, +3.6% versus prior year) and frozen (19 percent, +3.4% versus prior year).
Interestingly, private label brands aren’t achieving anywhere near the success of national brands despite having access to a fast follower strategy. While cleaning products is a highly planned category (88 percent of buyers made some type of list before they shopped), almost two-thirds (65 percent) don’t specify a brand on their list, and 60 percent are open to being influenced in store. This means private label brands have a good opportunity to be part of shoppers’ consideration set.
The rise of e-commerce will continue to help level the playing field for niche brands to gain share through better sales-based search rankings, which is the digital equivalent of premium shelf space. The clout that CPG companies currently get with large trade promotion budgets at brick-and-mortar retailers don’t matter online. Instead, best-selling search results are determined by algorithms based on consumer response. Consumer interest, rather than trade spending, is what drives online shelf position.
For a home care brand to succeed now and in the future, it takes consumer and competitor understanding, the right product innovation strategies and a well-developed e-commerce plan. The right data and insights can take you there. Even a one point share gain can translate into significant dollars, whether you have a national or private label home care brand. I think it’s worth it, don’t you?
I recently presented at the 2015 U.S. Cleaning Products Conference. If you’d like a copy of my presentation and/or have any questions on key trends or available data in home care categories, email me at Kathleen.Kemmet@IRIworldwide.com.