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Small electrics really revved up the kitchen when the Cuisinart was introduced back in 1973 by the late Cuisinart founder, Carl Sontheimer. The innovative new tool was seen as a quick, easy way to prepare fine food and healthy dishes. Influential chefs began touting the product, which in turn influenced American consumers to make their own investment. The rest, as they say, is history.
Little has changed since then. The American home cook is still searching for kitchen appliances that add value to their lives. They’re seeking equipment that increases convenience and efficiency in their kitchens. They want high style and professional design in all price points and in all categories. The trend toward stainless steel appliances con-tinues (despite persistent reports that color is taking over the kitchen), and finally, the American consumer is focused on health. These focuses and trends will play a vital role in the Small Electrics category for years to come.

Market Share

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The International Housewares Association’s 2004 State-of-the-Industry Report shows that small kitchen electrics experienced an overall growth of two percent during the past five years. Kitchen electrics comprise an estimated $7.15 billion in overall housewares industry sales. Specialty Stores represent $551 million in small electrics sales versus the Department Stores with $1.59 billion. Discount Stores represent $1.68 billion, according to the IHA study, while Gourmet/Gift Stores garnered another $200 million of the category.
The new and continued trends outlined in this analysis will continue to feed that growth and push overall sales higher. Specialty/Gourmet Stores will play an important part in the category’s development as the mid-field players struggle against changing consumer shopping preferences and increasing price competition.
The IHA reports that Discount Stores and Supercenters continue to lead housewares retailing with their annual sales totaling more than two times that of the next largest channel, Specialty Stores. This channel also sees the majority of its sales in household electrics (21.7%), cookware and bakeware (10.6%), and space organizers, closets, and clothing care (10.8%). Supercenters continue to drive this channel's growth, while Discount Store sales are growing by single-digit numbers.
Specialty Stores account for 12.2 percent of all direct-to-retail housewares sales. Stores like Williams-Sonoma and Linens ’n Things dominate the category with top sales in kitchen tools and accessories. In small electrics however, the Department Stores are the victors, with a large share of their 12.1-percent housewares pie the direct result of kitchen electrics sales.
An interesting note from the IHA is the increase of the Middle Five retail channels' share of the pie by nearly one-and-a-half base points in 2003. This group includes Gourmet/Gift/Novelty Stores and Hardware Stores/Home Centers, as well as Supermarkets, Drugstores, and Warehouse Clubs. Gourmet/Gift Stores have continued to show increased strength by moving past Warehouse Clubs in the sales of housewares with a total of $2.89 billion in 2003.

Practices & Predictions

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The Gourmet Retailer enlisted the help of NPD Houseworld in tracking recent sales in the category of small kitchen electrics. The research found that an overwhelming number — 26.16 million — of drip coffee makers were sold between March 2004 and February 2005. While this number represents a 4.3-percent increase over the previous year, the big winner in the top-growth category was the food processor with a 6.1-percent change for a total of just over five million units sold. Electric can openers also made the top growth list, but for the specialty side of the business, the most impressive news was generated by espresso/cappuccino makers and slow cookers.
Yes, it probably comes as no surprise to gourmet retailers that espresso/cappuccino makers and slow cookers round out the top five growth categories for small electrics. But when you consider these numbers are taken from all retail channels and include all retail price points, the 1.08 million espresso/cappuccino makers and the 9.12 million slow cookers sold during the study period illustrate the strength in these categories. Slow cookers enjoyed a 2.8-percent increase in units sold, while sales of espresso/cappuccino makers increased 3.9 percent.
NPD data also indicates that consumers continue to opt for traditional hues in small electrics, despite news reports that new colors are expected to make registers ring even higher. Of all the drip coffeemakers sold during the study period, 45 percent were white, 44 percent were black, and only 11 percent were other colors. In the food processor arena, more than 50 percent sold were compact units, while 44 percent were full-size models.
When it comes to who is purchasing these small electrics, women make the majority of purchases. The numbers skew slightly higher toward men when it comes to espresso/cappuccino machines with pretty even odds — 46 percent of the units were purchased by men and 54 percent by women.

Trends to Watch

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Food and lifestyle trends will play an important role in the future of small kitchen electrics. The slow food movement, Americans' love of coffee, and healthy eating are trends that will definitely influence the design and sales of kitchen equipment. Also impacting sales will be changes in the demographics of U.S. households. The downsizing of households will present manufacturers with opportunities to develop products for smaller households that range from college dormitories to empty nests. Many believe that trend will help drive sales of the redesigned toaster oven.
"That’s going to be a category to watch," Peter Greene, vice president/general manager of NPD Houseworld, began. "More real commercial-style brands are entering the category. They’re positioning them as a countertop oven."
New introductions will continue to enter the marketplace at all price points. The continued polarization of the marketplace — a thinning of the mid-price product range — will help both mass merchants and specialty retailers. While 50 percent of small electrics are sold in the mass channel, higher-end introductions and the ability to provide one-on-one customer service will boost sales in the specialty channel.
"Clearly anything over $100 to $150 is limiting the marketplace based on income limitations," Greene said. "If I am spending $200 for an application, I am not going to buy it on a whim. These consumers want service. Anything specialty retailers can do to create experiences that drive customers to their shops will help them to compete. It’s all about lifestyles and lifestyle experiences. The specialty consumer isn't about price — they’re about attention."
Focusing on consumer needs and desires is key to success across all categories. Greene suggests specialty retailers provide intimate shopping experiences focused on the needs of both younger stay-at-home parents and older, affluent consumers. The biggest gains in home ownership have been in the under 35-age group due to easy access to financing, so retailers can expect big growth in home improvement projects in this demographic. Providing distractions for children, such as samples, and creating stroller-friendly aisles are just some ideas.
Baby Boomers also account for 52 percent of home improvement expenditures (which are mainly kitchen and bath remodeling projects). Look for many of these consumers to swing their attention to outdoor kitchens that include everything from cooktops to grills to refrigerators. Catering to today's fast-paced lifestyles is also essential.
"Consumers crave convenience, which is why everyone has high hopes for single-serve coffee," Greene said.
That's not to say the higher-end espresso machines will feel a loss. Greene believes those sales will continue for some time, along with new built-in introductions.
Finally, the color story continues to be debated among trend predictors and the media. A recent article in The Wall Street Journal noted that manufacturers are looking beyond stainless steel to colorful collections and even "oiled bronze" hues.
"Stainless steel will also continue to be big. You can come out with any color you want, but for some reason, it’s hard for consumers to replace a working appliance," Greene noted.

Electric Meals

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While plenty of appliances are being sold and numerous kitchens are being remodeled, the plain fact is that people continue to cook less. Last year, just 50 percent of dinner meals were made using stovetops, according to NPD. It's a record low for dinner meals prepared with the use of the stove, down from 58 percent in 1994. Today's consumers want to be able to serve a homemade meal with fresh ingredients for the family, but they are not willing to spend a lot of time preparing meals from scratch.
The IHA's Housewares TrendTracker reports that Americans want their meals on the table (at least during the week) in the shortest possible time. In 2004, 44 percent of all dinners prepared during the week required 30 minutes or less to prepare, up from 40 percent in 1993, according to NPD's National Eating Trends service.
While prepared meal sections and other shortcuts continue to fill the need of time-starved convenience seekers, small kitchen electrics are also aiming at this phenomenon. Slow cookers are continuing to gain momentum in the marketplace with more manufacturers introducing higher-end models and looking to add new features to time-tested traditions.
Also hot are tools that save people time in preparation — choppers and graters that make prep tasks in the kitchen simpler and quick. Be sure to look for equipment that's easy to clean when filling your shelves for this consumer preference because if it’s not easy to clean, it's a waste of your dollars.
When reviewing your own small electrics category, view equipment with the consumer's eye. Consider how often the unit will be used and if it can be stored easily. If it's an appliance that will remain on the countertop, does it fit into the design elements of consumers in your region of the country? If you aren't sure, visit a design center in your city or town and discuss with local designers how their customers are decorating their homes. Partner with these designers to create a program where they use your high-end, design-oriented small electrics as part of their new home design or remodeling programs.
Also be sure to ask yourself what consumer need does the new small electric equipment you're considering bringing into your store satisfy? If you can't find a good answer, you might consider holding your own focus group of VIP customers to discover what they're seeking in new small electric kitchen appliances. Hold demonstration events that pit different brands against one another (you might even consider purchasing a unit you don't stock from another store in your area to illustrate to your customers why you chose the products you stock).
Whatever you do to highlight your Small Electrics Department and educate your customers, be sure you create a fun, informative experience around it. After all, you're not simply selling another toaster oven — you’re selling the new convenience it provides.