Household products may not generate the sort of volume associated with impulse staples such as confectionery, soft drinks and tobacco, but some cash and carry customers rate them highly for profitability, according to research carried out by HIM.
In a survey of more than 3,000 customers at cash and carry depots it found that just under a third, 885, were household shoppers, but one in eight retailers put household in the top three most profitable categories for their business. Overall it was ranked as the seventh most important category by retailers.
Despite the importance of the category to customers, cash and carries appeared to be failing to satisfy the needs of many, with 10% failing to buy a household item they arrived intending to buy. Out of stocks were the reason given in most cases.
Of the customers buying household products, 24% were buying paperware, 19% buying household cleaning and 12% buying laundry products. This contrasts with the top penetration category of soft drinks, where 88% of all customers buy into it.
Promotions appeared to be a low priority for household shoppers. Of the 44% of customers who said they bought on promotion, only 5% of these said they bought household items on promotion.
This may be partly explained by the fact that 82% of household shoppers say they use a shopping list compared with the average for all shoppers of 74%. With so few customers buying on promotion, HIM says this presents a challenge for the manufacturer – how do they ensure their products are on the shopping list?
One wholesaler that has an unrivalled insight into the household market is DCS, which acts as a distributor for companies such as Colgate, Procter Gamble, Unilever, Sara Lee, SC Johnson Wax and PZ Cussons, and delivers to almost every other major wholesaler in the UK.
Richard Jorden, commercial director of DCS Europe, says the household market has shown minimal but consistent growth year on year. However he adds: “Growth is generally triggered by innovative NPD such as Cillit Bang from Reckitt Benckiser or Procter Gamble’s launch this year into Fairy Dishwash tablets.”
Jorden says there is also growth of big box powders and five litre liquids that people are buying for their own personal use from wholesalers rather than from the multiples with Makro an example of how a new “channel” can be created out of an existing business. “As the multiples have devalued the retail brands and sizes this represents a significant opportunity for wholesalers to increase profitable sales.” he adds.
When it comes to merchandising, Jorden says: “Wholesalers tend to do a good job of household products. The category is generally not as confusing as health and beauty, and most laundry products are stocked in full pallet spaces. One area that we encourage our customers to focus on is brand leaders and core range.”
DCS provides a number of initiatives to help its customers identify which products are core range such as:
l a six-monthly household market review
l a core range catalogue listing the top 10 of each category
l best seller leaflets, tickets and POS
l a bespoke range analysis service
Following a successful toiletries merchandising and POS trial with Landmark at the beginning of last year, DCS recently rolled it out to 38 Landmark members and also included all the household categories. Jorden says: “While it is still early days, the sales are encouraging and we are looking to replicate the success of the health beauty project, where sales grew by up to 38%.”
On promotions he says manufacturers tended to run price discounting, but recently there has been a big move away from this and into price marked packs. Jorden says: “This is helping drive volume as the saving is being passed directly onto the consumer.”
One manufacturer looking to drive demand from the consumer is Procter Gamble, which has launched a major promotion for Ariel. From mid-May to September special promotional packs of Ariel Biological and Ariel Sensitive will feature tokens which can be sent off in return for free tennis equipment. This continues the long-term partnership between Ariel and the Lawn Tennis Association, which in April saw the launch of the Ariel Mini Tennis For Schools programme. One hundred primary schools across Great Britain have been given Ariel Mini Tennis equipment plus training for teachers by an LTA licensed coach to help deliver tennis into schools.
The latest Ariel campaign follows its Ariel Colour Style pound;3m TV and print campaign. Paul Lettice, P G trade marketing manager, says: “Ariel’s research reveals colour is the best kept secret in the laundry category. The market is worth over pound;99m, however only 29% of households buy colour products. We are taking the opportunity to drive awareness of Ariel Colour Style, and drive basket spend and category value.”
Wholesalers have also been able to offer 20% free, price-marked packs across Ariel Biological, Ariel Sensitive and Ariel Colour Style since March. Other P G activity this spring concentrated on a range of its products including the launch of Bold 2in1 Apple Blossom Lime zest, together with its household cleaning brand Flash and dishwashing brand Fairy.
Unilever UK Home and Personal Care has also been active in the laundry category with the launch of a new variant of Surf brand. Available now, Surf Cool Fresh joins the existing Surf variants: Surf Tropical and Surf Sunshine. It will be supported by a pound;7m TV, press and radio marketing spend to reinforce Surf’s ‘Gets rid of 99 top stains’ cleaning proposition.
Packaged in aqua blue livery, Surf Cool Fresh will feature scratch and sniff stickers on pack to heighten consumer appeal in a category where fragrance is increasingly important.
Jane Boret, Surf brand manager, Unilever UK HPC, comments: “Surf Cool Fresh gives consumers a reason for Surf re-appraisal. The concept and fragrance fit with the ‘Cool Freshness’ fragrance trend. Blending citrus with peppermint notes, it exceeds competitor fragrance scores and offers a superior fragrance for consumers.
“In addition, we know that laundry consumers must be reassured that their washing detergent does the basic job of getting their clothes clean – New Surf Cool Fresh will be reassuring consumers on this front as well as keeping pace with consumer demand for fragrance choice.”
In household cleaning, Unilever UK Home and Personal Care’s brand Cif is entering the specialist sector with the launch of two new products; Cif Stainless Steel Gel and Cif Oven Cleaner.
Grainne Tierney, Cif brand executive at Unilever UK HPC, says: “These two product launches have been developed from consumer insights and bring true innovation to the marketplace. Both products offer great efficacy and this, matched with the strength of the Cif brand, will result in significant category growth in the oven cleaner and stainless steel markets. The specialist market is currently worth pound;109m and we expect to see considerable growth following these launches.”