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Jun 1, 2010
by Kevin Zimmerman
The home furnishings and housewares segment of consumer goods has come through the economic downturn with mostly flying colors, according to both U.S. government statistics and purveyors of goods in the category. A solid beginning for 2010 is thus expected to expand even further as the year progresses, with many sellers already expecting big things from the holiday season, for the first time in several years. Sales of cars and gasoline helped push up March retail sales figures, according to the Commerce Department, but there are also emerging signs that shoppers are increasingly looking for nonessentials, including home furnishings and housewares, as the economic outlook continues to improve.
The Commerce Department's monthly retail and food services sales report for March showed sales rising 7.6 percent from March 2009, to $363.2 billion, a 1.6 percent rise from February's figures. Excluding the automotive segment, total sales rose by 8.2 percent year-over-year, and retail sales increased by 6.4 percent. Auto sales were up 14.1 percent from a year ago. Another monthly tally of comparable retail sales, by media company Thomson Reuters, found the strongest monthly sales gains for March since the firm first began tracking such figures in 2000. Total sales increased 9.1 percent over its March 2009 figures, markedly better than Thomson's prediction of a 6.3 percent rise. Sales were up 12.3 percent at department stores, 11.8 percent at apparel stores, and 10.1 percent at discount retailers.
Both the Commerce Department and Thomson Reuters caution, however, that the March sales bumps may have been influenced in part by an early Easter, which fell on April 4 this year, and will likely have a negative impact on April sales figures. Still, The International Council of Shopping Centers wasn't looking any gift horses in the mouth. "The calendar shift due to the earlier Easter this year versus last year [April 4, 2010, vs. April 12, 2009] caused [March] sales to surge on an unadjusted basis, but even seasonally adjusted, sales were quite strong as well," said the group's chief economist, Michael Niemira, who also credited unseasonably warm weather around the country (temperatures were warmest in 18 years in many areas) as a contributing factor.
The Commerce Department also reports that consumer confidence has risen of late, despite the continued nationwide unemployment rate of 9.7 percent for much of the first quarter of 2010. On May 1, the Commerce Department reported that the national economy had grown at an annual rate of 3.2 percent for the first quarter, spurred by consumer spending, and marking the third straight quarterly gain. Still, most observers say the economy needs to grow at a roughly five percent rate to have a real effect on unemployment. "The recovery is slowly gaining traction, but it's not growing fast enough now to bring down unemployment and let ordinary Americans feel like they are finally off and running," Mark Zandi, chief economist at Moody's Analytics, said in a statement.
Americans spent more on home furnishings and household appliances, as well as on recreational goods and vehicles, clothing and food during the quarter, but analysts caution that the high unemployment rate, along with slow wage growth and a reluctance or inability to borrow, will probably curb those gains in the near term. Another sobering factor was the news of an Associated Press-GfK poll, conducted April 7-12, which found that only 21 percent of Americans consider the economy to be in "good" condition.
However, "good" doesn't do justice to the way business has been going at Cadence Keen Innovations (www.ckisolutions.us), where senior VP of sales and marketing, Steven Gordon, says things have been, "Excellent. We're having our best year in 12 years, and a terrific first quarter." CKI produces a number of innovative, quality products for the hospitality and retail industries. Its product line includes unique, patented systems for quickly combining two beds into one, a diverse line of cutting edge products to protect mattresses, pillows and box springs, and the "Bed Made EZ," a handheld device that allows users to raise and rest mattresses in a raised position to more quickly and painlessly change linens.
Gordon says that many mattresses in today's homes weigh over 150 pounds each, and that changing linens often requires a mattress to be lifted at least eight times from a stooped position of 14 inches off the ground; combined, such efforts contribute to the back pain suffered by 85 percent of the population. "We're finding more and more mattress retailers and furniture wholesalers who are looking for something to sell alongside their more high ticket items," Gordon says, "and the Bed Made EZ certainly fits the bill." Sales for CKI's bed doubler have increased by 40 percent, he adds, and its mattress and pillowcase protectors and encasements, which protect against everything from allergies to incontinence, have also proven popular. Many of its items are for sale at such retailers as Bed, Bath & Beyond.
"We're taking a very bullish approach to our products this year," Gordon says. "We're increasing our attendance at trade shows and undertaking an aggressive print advertising campaign. We feel that many of our products tell their own story. It's just a matter of getting the word out there."
Business has also been up at Seneca Inc.'s Designcast Specialties (www.thegrilltopper.com), where sales of the Grill Topper (effectively custom designed branding irons that sear a sports team's or company's logo or insignia onto the surface of meat being barbecued) are steadily increasing. "We've seen a nice progression," says division manager, Jory Dyvig. "We've been increasing our licenses on a regular basis. Initially, we expected to add around 12 a year, and by the end of our third year we had 52 schools." Those schools include most of the colleges with major sports programs. Grill Toppers are priced at $18.99 for standard sizes (good for burgers, chicken, etc.) and $16.99 for hot dog toppers. Dyvig says Designcast deals regularly with sports licensing firm Collegiate Licensing Company, and looks to add schools once enough inquiries have been received.
If it seems that connecting with professional sports leagues would be the next natural step, Dyvig agrees. Designcast is in the process of filling out applications with the NFL, with an eye towards having all 32 NFL teams by next year, and feels that Major League Baseball, the NBA and NASCAR would also be natural fits. The company works closely with a vendor at the College World Series, and may experiment with both burger and hot dog grill toppers at the next edition of that event, and plans to roll out Ford Motor Company and even U.S. Army grill toppers later this year. "We're hopping to move Grill Toppers from being a product to being a brand," Dyvig says. "We'd like for people to view it as another barbecuing tool." The company also offers team logo-imprinted grill gloves ($16.99) and aprons ($29.99).
Also aspiring to become a familiar household brand is the Funnel-It, formerly known as the Fun-All (www.thefunall.com), an adjustable device that attaches to the opening of most new bottles (ketchup, liquid soap, motor oil, etc.), that when also attached to a nearly empty bottle of the same brand, can refill the old bottle with a minimum of effort and practically no mess. The company estimates that every American discards an average of 0.37 ounces of product per bottle purchased, which equals one Exxon Valdez oil spill each year in the U.S. alone. While the product has had some success from its website and sporadic demonstrations at trade shows, newly appointed marketing manager Mike Jaksha says the time has come to reintroduce the product to the marketplace, including a new name, website, and a new attitude. "I've spent nearly my entire career bringing products to market," Jaksha says.
Priced at $10 per three pack, the Funnel-It needs to be exposed beyond the flea markets that have been its bread and butter, Jaksha believes. "We're still going to focus on them," he says, "but we want to also bring in market dealers and fair vendors, as well as discount stores. It's a matter of creating consumer awareness of something that can be seen as 'green' and environmentally positive. Saving bottle leftovers is something we should all be doing, so the next big step is getting this product into the grocery stores and the Bed & Baths." The new website, which Jaksha expected to launch in May, will include new images and video content and is, designed to appeal to, "basic human psychology, letting gravity do the work of helping to save money in an environmentally responsible way."
It's currently quiet at Sival, Inc. (www.sivalinc.com), but that's because the company specializes in Christmas lights. "Business dropped a little bit last year, but not as much as we had expected, given the economy," says director of marketing, Leslie Yuen. Sival's line of LED string lights remain very popular, he says, noting that they use a lot less energy than traditional bulbs. "Those do really well with people who are thinking of going green at their homes and restaurants and businesses," he says.
LED lights give off a richer, more vibrant color than incandescent bulbs, Yuen says, and can save more than 90 percent of power used for lighting conventional mini lights. In other words, for every $1 spent on an equivalent incandescent mini light string, 90 cents is wasted. LED lights are also made of break-resistant plastic rather than glass, and generate much less heat than incandescent bulbs do. In addition, Yuen notes, Sival's LED string lights are rated for an average life of 100,000 hours, compared to the 2-3,000 hours average lifespan of incandescents. Sival also offers a number of other lighting options, from paper lanterns and lighting clips and mounts to wedding and party lights. The company requires minimum orders of $100.
Not everyone is doing well in the home furnishings and housewares category, of course. Jason Moore, owner of Peach Fur Fleece (www.peachfurfleece.com), which specializes in wholesale fleece blankets and garments, says new government regulations revising the code of ethics for pharmaceutical companies, which went into effect last year, made a "huge dent" in their business. At issue, he says, was the common practice of "wining and dining" pharma clients with an eye towards doing business. Now, "We're still doing our share of small orders, but the bigger companies have all been scared off."
Peach Fur still undertakes a significant amount of charitable work, Moore says, providing blankets for disaster relief efforts such as the American Red Cross' Haitian outreach, and military support, wherein U.S. soldiers have been able to create some good will by providing blankets to needy families in Iraq and Afghanistan. Peach Fur also sold 12,000 fleece jackets to churches last year, and Moore says the company has a "steady flow" of business with its blankets.
Fleece baby blankets (minimum order of 24) are priced between $5.50 to $9.75, depending on quantity and design, while picnic blankets (same minimum) are priced at $9.35 to $11.25 and fleece blankets go for $4.50 to $19.50, again depending on quantity and design. Peach Fur also offers an array of corporate and promotional gifts (company logo-emblazoned hoodies and blankets, etc.), as well as fleece material by the yard, though Moore says he'll probably be phasing that out, as it's rarely cost effective. He's also hoping to further optimize Peach Fur's website, with more content on its welcome page, and possibly lowering prices. "Anything that will help," he says.
The following were interviewed for this article:
Senior VP of sales and marketing
Cadence Keen Innovations (CKI)
3020 N. Federal Highway, Suite #3
Ft. Lauderdale, FL 33306
Toll Free: 888-222-2217
P.O. Box 365
Webster City, IA 50595
6 Route Y
Arcola, MO 65603
Toll Free: 800-872-5489
Director of marketing
3350 Scott Blvd., Bldg. 20
Santa Clara, CA 95054
Toll Free: 800-777-8667
Peach Fur Fleece
201 Portland Ave.
Huntington Beach, CA 92648
Toll Free: 800-516-0045
Topic: Company Profiles
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