Are They Being Served?

Making items more accessible to shoppers sets the table for retailers to reap bigger profits throughout the store.

It's 10 o'clock on a Thursday night, and you've promised to bake cupcakes for your daughter's third-grade class for tomorrow morning. You're halfway through the recipe when you remember that you threw out the old muffin pan when the pumpkin cupcakes burned last Halloween. Got to get a new one — fast! So you hop in the car, but Walmart is closed, and so is the mall. Luckily, the supermarket is open all night.

Unfortunately, this scenario sums up too many consumers' experiences with shopping for housewares at the supermarket. Operators know that when it comes to the housewares category, most shoppers buy from them either out of convenience or necessity. These products are certainly not new to the supermarket, but for many operators, the category hasn't had the type of bottom-line impact they'd hoped for.

“There is an enormous opportunity to sell housewares in the supermarket, particularly in light of the fact that the other retail channels, where house-wares have traditionally been sold, are trying so hard to get into sales of food products,” says Perry Reynolds, VP of the Rosemont, Ill-based International Housewares Association (IHA).

Sales Potential

Most analysts agree that there's a still under-tapped potential for housewares sales through supermarkets, with some retailers becoming resigned to merchandising and selling these products strictly as convenience items for shoppers already in the store. The question is, how can supermarkets begin to tap into more of the potential housewares sales?

Reynolds believes that supermarkets need to look at how to match their housewares offerings with their customer base, and begin to create merchandising opportunities. “There's enough variety of housewares to fit any economic and shopper criteria,” he says. “Consumers are more willing to purchase food prep products where they purchase the food they are going to prepare.”

There has been some progress made in terms of supermarket sales. According the IHA's latest “State of the Industry Report,” while discount stores and supercenters are still the largest retailers of housewares in total and for each individual category, their share of sales has declined over the past two years. Sales of these products through other retailers, including supermarkets, have increased during the same period.

While food is where the bulk of the sales come from and brings in loyal repeat customers, the housewares category brings supermarkets the benefit of much higher margins to help offset the highly competitive, lower-margin food categories.

Consumer awareness of these products in the supermarket is paramount to elevating the house-wares section from convenience/ impulse to a more prominent position on the shopping list. “It [housewares] does have to be part of your strategic approach to what your customer is looking for,” Reynolds advises supermarket operators.

Filling the Cart

Part of what makes house-wares sales so appealing to supermarket retailers is that these products help spur the sales of other items, specifically the food products that the housewares items were designed to prepare. While most supermarkets set housewares items in a separate section, usually next to the auto parts and shoe care products, more cross-merchandising with food categories may help sales of both.

“The whole idea is to fill the customer's shopping cart, not just by adding the bakeware, but also by adding the food that goes with it,” notes Charlie Antar, director of sales for Brooklyn, N.Y.-based Euro-Ware, maker of Entenmann's Bakeware. “I've seen a lot of supermarkets trending towards [cross-merchandising], not just with bakeware, but [also] with other housewares. One supermarket executive told me he moved the frying pans next to the eggs, and it pumped up pan sales 100 percent. You've got to inspire customers to pick up that extra item and pick up the food ingredients that go with it.”

Antar suggests creating what he calls a “Destination Display,” which mixes in the housewares with food products. For instance, a lot of the Entenmann's Bakeware items are featured on end caps along with cake mixes, sprinkles, frosting and other related products, not only to give consumers everything they need in one spot, but also to create a little story in their minds. This boosts sales of everything on the display, including the bakeware.

“Cross-merchandising is one way supermarkets are maintaining or growing their share of the housewares category,” says David McConnell, president/CEO of the Colorado Springs, Colo.-based Global Marketing Development Center (GMDC). “A lot of smaller chains and independent retailers are relying more on their service merchandiser partners to help them with this merchandising and to set up special merchandising events, such as cooking demonstrations and even appearances by celebrity chefs.”

Similar highly cross-merchandised displays can spur sales of any type of housewares product. As an example, look at the wine section in the supermarket: It's common to merchandise wine with a cheese selection, but retailers can take it a step further and also bring a array of wine implements (corkscrews, aerators, stoppers) cheese boards, knives and even stemware to create a sophisticated party-themed display.

McConnell believes that part of the reason supermarkets have lost some housewares sales in recent years is that many retailers have shrunk the size of their housewares sections to give extra room to center store and fresh food departments. He advises operators not to take too much space away from housewares. “You've got to make sure you don't squeeze down your set to the point that you don't have enough variety and depth of product to make a strategic statement to your customers that you are in this business and have what they need in terms of housewares.”

Think Small

There are a number of current consumer trends that work in supermarkets' favor in terms of selling housewares. One trend that supermarkets can exploit is the movement toward smaller kitchen housewares.

Consumers want housewares that they can afford, but that are functional and in some cases smaller. They don't necessarily want top-of-the-line cookware or small kitchen appliances. This is good news for supermarkets, which generally don't carry the big-name, restaurant-quality kitchen implements. This also piggybacks onto the trend for less expensive housewares, a shift that further favors the merchandise that many supermarkets carry.

Additionally, housewares, especially kitchen products, have become décor items, and shoppers are looking for decorative elements in even the smallest implements. It's no longer enough for a paring knife to be sharp; it has to look sharp as well. Unique shapes, materials and a splash of color often influence shopper purchase decisions.

On the High End

This isn't to say that all housewares sold through supermarkets have to be middle-market or sold at discount. If the supermarket has the right clientele, upscale houseware brands can succeed.

“Our line is an upscale consumer product, a professional product, which works well in stores with an upscale clientele. There is definitely a place for this in an upscale supermarket,” says Joseph Varano, national sales director for Monroe, Conn.-based Victorinox Swiss Army Cutlery.

Victorinox has recently placed a program with Rochester, N.Y.-based Wegmans Food Markets, which included eight to 10 SKUs of pegged knives, creating a mini cutlery section. With an upscale product, Varano suggests that grocers need a little assistance from the store staff to help explain the benefits of the product to shoppers. Victorinox provides training to store associates to help move its products.

One route some supermarket have found successful is the inclusion of quality store brands to their housewares section. “Retailers such as H-E-B have done a great job by bringing in their own store-label housewares line,” says GMDC's McConnell. “The company's GTC brand has sourced some quality-, value- and price-oriented offerings. They are also sensitive to color and style; for instance, they offer a $14.99 blender and a coffeepot, both in red, which is the hot color, as well as a full line of other housewares. Kroger has also done a great job with its own housewares brand.”