With a recession and inflation looming on the minds of many companies and consumers, Joe Derochowski, home industry advisor for The NPD Group, discussed during IHA’s 2022 Connect FALL virtual event where consumers are likely to spend during the next year and how companies can be ready to meet their needs.
Derochowski began by stating prices across all industries have risen not only this year, but last year as well. However, inflationary times have not always impacted consumer behavior, and there are growth opportunities and money to be made in 2023.
Derochowski’s advice for companies navigating the current state of the marketplace included five opportunities to understand consumers and generate growth:
Leverage growing consumer needs.
During a recession, consumers (especially lower-income households) eat at home more often, which opens the door for home-centric items, Derochowski said. Among other burgeoning consumer needs, the return to office has created a space for convenience-based products, which includes products for quick and easy meals at home, portable beverageware and food storage containers. Additionally, pandemic-related concerns about sharing food have begun to dissipate, and it can be expected that shared appetizers, foods and desserts will once again find their way onto tables this holiday season. This opens the door for different types of serveware, entertaining items and specialty food storage.
Expand new audiences.
Derochowski challenged listeners to ask themselves if they are satisfying the needs of all of their markets and audiences. As an example, he noted the Hispanic population is one of the fastest-growing segments of the population and makes up a higher share of the wallet when it comes to such products as traditional blenders and single-serve blending/processing appliances. He asked, “Are you marketing in a way that connects to them?” Companies need to be fully leveraging new audiences, he said.
Discussing execution, Derochowski said kitchen appliances beat out home environment, kitchen electrics, personal care and housewares. While the number of units on promotion increased because of more promotions, the depth of the discount lessened, said Derochowski. He stressed how important it is to win at the execution and to re-evaluate pricing and promotion strategies to gain profit.
“Can we be more nimble?” Derochowski asked, stressing that companies need to adjust more quickly to the needs of consumers. In fans, for example, companies should be aware of changing weather patterns to adjust to purchasing habits.
The adjustment in consumer behavior that is happening now means there is money to be made, Derochowski continued. However, it’s not just about products, he said. It’s also about marketing, continuing to speak to the consumer and inspiring them. He cited such examples as the creation of themed nights, including Meatless Monday, Taco Tuesday and Pizza Friday on social media.
Despite inflationary times, there are growth opportunities if you know where to look, Derochowski concluded.