press release -
International Housewares Association
FOR IMMEDIATE RELEASE:
Contact: Deborah A. Teschke
Senior Manager, Public Relations & Communications
Email Debbie Teschke
HOUSEWARES INDUSTRY RISES TO CHALLENGES OF PANDEMIC YEAR, PREPARES FOR WHAT 2021 MAY BRING
Focus on supply chain management, a truly omni-channel marketplace and changing consumer wants/ needs (for now)
ROSEMONT, IL (Jan. 20, 2021)– If there was one universal lesson from 2020, it was the importance of being adaptable. This was, after all, the year when a pandemic quickly took over the world – complete with retail and manufacturing shutdowns, combined with unprecedented demand for housewares and home goods. As housewares executives reflect on the past year and outline their goals for 2021, there’s consensus that even the best laid plans need to be ready to change.
“Change is inevitable,” said Bill Endres, president of Select Brands and chairman of the International Housewares Association’s (IHA) Board of Directors. “It doesn’t matter what industry you’re in, where you live, or anything else...how we embrace that change and how we address that change is what brings success.”
“Every year, there’s something,” commented Luke Peters, president/CEO of NewAir LLC. “That’s why we always have to be nimble and have the mentality that we’re not going to overreact to the problem of the day...we’re just going to solve the problems that are ahead of us.”
“Disruptors are actually huge opportunities,” agreed Thom Nichols, president of Pretika Corporation. “What we have right now are opportunities to not just sit back and get through this…but to make big improvements for the future.”
As many consumers around the world were forced to – or chose to – shelter at home during the COVID-19 pandemic, demand for home goods skyrocketed. In the U.S. alone, housewares sales jumped 22% in 2020 over 2019, according to The NPD Group. Small appliances increased 25%.
That growth remained consistent through the holiday season (Oct. 3 – Dec. 26), according to NPD. Housewares were up 24% in 2020 over the same period in 2019, and small appliances were up 25%.
Yet, for the most part, housewares inventory has not caught up from manufacturing shutdowns and shipping delays in the first half of the year. Many factories still are operating at limited capacity for health/safety reasons or labor shortages, and delays in outbound shipping and at U.S. ports remain. These are challenges many housewares executives say will continue at least through the middle of 2021, and why Nichols calls the supply chain model a “huge driver to success.”
To adapt to these challenges, many said they’ve added extra touches to move things through the entire logistics chain, in some cases engaging retailers on weekly update calls. Some decided to give production priority to certain SKUs or categories. Others have increased their safety stock, taking the risk of ordering more often and in higher volumes than they normally would.
Some are working to add new production facilities – sometimes in countries other than China – though this is a process that takes considerable time. For those who manufacture in the U.S., the focus is more on working to protect their employees’ health and safety on the job, while finding and retaining new workers.
In the meantime, the retail industry has also undergone a quick and dramatic transformation, adding new shopping services to address consumers’ health and safety concerns, and increasing digital offerings to tap into high demand.
“We’ve talked a long time about omni-channel retailing, but now we’re actually doing it, which is great…because it allows consumers to shop when, where and how they want to shop” said Joe Derochowski, vice president and home industry advisor for The NPD Group.
“The transition to digital exploded in 2020, but it was also good to see some strength in some brick-and-mortar channels,” said Mike Otterman, president/CEO of Lodge Cast Iron.
“I’m excited about the blending of online and in-store to meet consumer expectations at every step along her path to purchase,” added Kris Malkoski, business unit CEO, Food, Newell Brands.
“I’m definitely excited about the expansion of e-commerce,” said Paul Cosaro, CEO of Picnic Time Inc. “It gives more people more access to a more diverse range of products.”
But Cosaro and others expressed concern for small independent retailers who have had more difficulty navigating store closures and integrating e-commerce platforms, as well as other larger retailers who were struggling before the pandemic.
Many agreed that relationships with retailers are more important than ever before. That may mean anything from managing expectations about upcoming shipments and working directly with more than just a retailer’s buying team to offering the services of an internal creative team to help a retailer with design needs.
How Long Will This Last?
Of course, the question on everyone’s mind is how and when consumer behavior (and spending on housewares products) will change in the face of loosening pandemic restrictions
As of early January, NPD predicts overall U.S. sales will stay consistent for first quarter of 2021, then decrease the rest of the year. Compared to banner 2020 sales, small appliances will be down 7% overall and housewares down 9% in 2021. However, compared to a more regular year of 2019, small appliances will be up 13% and housewares will be up 7% in 2021.
But there’s much more at stake than year-to-year sales, emphasized NPD’s Derochowski. “We’re at the beginning of a major transformational consumer shift,” he explained. “How consumers define needs coming out of the pandemic will set a foundation for the next 10-15 years for us to innovate and market towards.”
In other words, it’s not just about meeting today’s or tomorrow’s demand. It’s about anticipating consumers’ needs and building a long-term relationship with them.
As Yvette Laugier, managing director of Peugeot Saveurs North America LLC, said, “We’ve been excited by the opportunity to introduce more consumers to both our brand and the delight in cooking at home,” a relationship and a behavior she hopes they can maintain for the long-term.
It can take time to come down from a year housewares executives called “stunning,” “tumultuous” and “unprecedented doesn’t do it justice.” Yet, there still may be a rough road ahead, as the U.S. is now grappling with extreme political unrest, and several other challenges remain, including tariffs and rising costs.
“We are also seeing product costs increase due to a reduction in the value of the U.S. dollar, increases on raw materials and significant inbound freight expenses,” said Steve Greenspon, CEO of Honey-Can-Do International LLC.
But many housewares companies are forever changed for the better.
“2020 was so difficult, yet so rewarding as strange as that sounds,” said Picnic Time’s Cosaro. “It forced us (as a company) out of our comfort zone more than any of us could have predicted. It helped put everything in perspective and prioritize what matters. I’ve never seen more camaraderie, more teamwork or more engagement than ever before.”
“We’re a much better and stronger company after this year,” added Newair’s Peters. Before the pandemic, Peters had been working to build up a new leadership team and feels “if you have the right people, you can overcome anything,” a sentiment echoed by Greenspon. After making the decision that many office employees could stay remote permanently, Greenspon said he’s been able to make several new hires from across the country...a talent pool he previously would have overlooked.
“2020 was challenging but also uplifting,” said Select Brand’s Endres. “We found new ways to work and to respond to people in need. We became more cognizant of how to make our businesses and personal lives better.”
And since the necessary cancellation of The Inspired Home Show in March 2020, the industry is long overdue for the chance to get together and share all their new products, strategies and ideas. “I’m very excited about the opportunity to get the industry back together in August,” said Endres. “There’s no better way to demonstrate the latest innovation and have so many crucial face-to-face meetings.”
The International Housewares Association is the 81-year-old voice of the housewares industry, which accounted for (US)$364.2 billion at retail worldwide in 2017 ($91.6 billion at retail in the U.S.). The not-for-profit, full-service association sponsors the world's premier exposition of products for the home, The Inspired Home Show, IHA’s Global Home + Housewares Market, and offers its 1,600 member companies a wide range of services, including industry and government advocacy, export assistance, State-of-the-Industry reports, point-of-sale and consumer panel data through Housewares MarketWatch, executive management peer groups, a unique Web-based community at www.housewares.org, group buying discounts on business solutions services and direct-to-consumer engagement through TheInspiredHome.com.