Sorry, But Power Tools Are Just Better In Person
Every day, new stories emerge that claim Amazon is taking over the retail world. Amazon and its online competitors take a bigger slice of the retail pie each year. But some industries appear to resist the march to online sales more than others. Power tools continue to maintain the majority of their sales through traditional home improvement locations. This trend occurs even with a stratified market for brands and holds steady across the generational lines that often indicate future growth for Amazon and other online-only retailers.
What the best merchandisers provide -- and what Amazon lacks--is the tactile experience that tools on display provide. Home improvement stores offer all the top brands across multiple price points and lay them out in a way that allows customers to both visualize and feel how they fit into home improvement projects. The line will not hold forever, but traditional venues and marketing remain the focus of the immediate future for power tools.
Power Tools Sales and Store Loyalty
For many kinds of products, loyalty creates barriers to entry for new brands but provides little impediment to online delivery channels. For power tools, though, brand loyalty lies not at the product level, but rather at the store level. Home improvement chains have used retailing experience and prowess to build and expand their customer bases, regardless of the type or brand of tool those customers seek to buy.
Based on TraQline's research, three traditional home improvement stores dominate the landscape for sales of power tools: Home Depot, Lowe's, and Sears. The three combine for over 57% of sales for both Millennials and Generation X, and over 53% among Baby Boomers. Amazon sales, in contrast, hover at between 7% and 8% for all three groups. In a world where Amazon has pushed further into almost every product group for increased sales, it continues to lag in the power tools arena.
Hands-On Experience Matters
In analyzing these pieces of data, one immediate aspect that jumps out is the importance of a hands-on retail experience. Online shopping works well for many kinds of products, and that list continues to expand every year. But power tools represent hard, manual labor, and the ability to work with one's hands. Whether this means drilling, sawing, or any other workbench or garage kind of task, seeing and feeling the product before buying continues to matter.
The products lend themselves to a shopping experience that is as much tactile as it is visual. Generations both young and old purchase their power tools in brick and mortar stores more frequently than online.
Further, outlets such as Home Depot and Lowe's offer a clear advantage over their competitors by providing a one-stop shopping experience for home improvement. A consumer can go to either of these stores and find all the tools required for a job, as well as other equipment and supplies, organized and displayed to provide what consumers need. With an array of brands to fit every budget on hand, the store retailing experience reduces the need to comparison shop on that front after the ideas take hold.
Looking Beyond Brand Loyalty
Indeed, one of the interesting aspects the TraQline research notes is the limited extent to which brand loyalty for individual tools seems to matter. DeWalt tools enjoy significant market share, but not so much that the many other available brands fall by the wayside. Retailers can focus on placing products in the best environments to succeed, with an interactive display to allow a hands-on experience.
Online availability will still matter. When over 7% of power tool purchases come from Amazon, the outlet should receive some attention. But home improvement stores dominate well beyond the extent to which the power tools' brand names inspire loyalty. The ability to create a one-stop shopping environment seems much more efficient for power tools than for other categories of product. Stores simply provide ideas and options in a format that lets consumers get a real feel for solutions to home improvement problems they face.
Delivering on What Today's Customers Want
Even with the strength of in-person, hands-on marketing, stores are finding ways to incorporate technology into their retailing. Unlike marketing for other products, power tools lend themselves to a less high-tech, more traditional kind of in-store marketing. The knee-jerk reaction to this may be that staying current courses should be the order of the day. Focus on the right brand, form factor, and product mix, build in-store displays and let the people come, so long as those products sell in big home improvement stores.
This is an oversimplification though. Other factors, such as how different generations shop for products, should be taken into consideration. Millennials have different expectations for shopping experiences than older generations. Rather than a simple display, a recent Forbes article notes that they look for personalization and a customer-centric experience when they shop. For the leading home improvement retailers, delivering on this expectation fits well with how they already do business. They give their customers the ability to see and feel many of the tools they are purchasing, efficiently providing a one-on-one experience with the products.
Further, the displays aren't where the shopping experience ends. For example, Business Insider highlights how Home Depot has focused on developing its mobile app to enhance its in-store shopping experience. Rather than merely turn customers loose to wander in the giant warehouse-style store, Home Depot uses technology to make the shopping process more straightforward and help customers access additional ideas while shopping in a tactile-focused environment.
Driving Sales into the Future
The future of power tools sales should continue to focus on putting them in the right retail environments to succeed. The lack of generational differences in purchasing behavior points to stability in what customers want and expect. A hands-on shopping experience tweaked to maximize a customer focus through a combination of technology, and project-based display should deliver the most significant impact on retail power tool sales.
Not Quite Ready To Cut The Cord
It’s the holiday season, the perfect time to get that special someone the power tools they’ve been dreaming of all year. Changing battery technology has made significant impact on cordless tools in the past few years, especially with lithium ion batteries. However, despite their increased power and decreased weight and cost, portable power tools are having a difficult time breaking 60% penetration.
Now, that isn’t to say that some cordless power tools haven’t become overwhelmingly popular. When looking at which products consumers purchase for the past several years, power drills and impact drivers make up almost exactly half of the eleven portable power tools being tracked by TraQline. Not only are drilling/driving tools dominant, cordless has been the form factor of choice for years (over 80% of the time). Due to this dominance, other portable tools haven’t gained much ground, which has affected overall penetration. For example, according to TraQline, in 2007 the percentage of portable power tools purchased was 53%; in 2017, that number rose marginally to 56%. However, as technology continues to pack more power into a smaller lithium ion (or the next great technology) battery, the market will continue to shift towards cordless.
"Grinding" down in corded
Certain tools have started to gain ground – but they had (and still have) some catching up to do. Routers and grinders have a relatively small impact on the overall portable power tool market, in 4Q end Sept 2017 making up only 6% of all portable power tools sold, but they’re showing large increases in cordless growth. These two categories now boast not only being among the lowest percentage of products sold as cordless but also fastest adoption of cordless: in the 4Q ending September 2008, only 13% of consumers purchased cordless routers. By the 4Q ending September 2017, that has increased to 26%. Similarly, only 7% of consumers purchased cordless grinders in 4Q ending September 2018. In the 4Q ending September 2017, that’s more than doubled, to 15%.
Capping the list of top three corded products purchased is the orbital sander. In order, the current top three corded power tools are:
- Orbital Sander: 87% corded (cordless 13%)
- Grinder: 86% corded (cordless 14%)
- Router: 76% corded (cordless 24%)
On the flip side, the three most commonly purchased cordless power tools are:
- Impact Driver: 84% cordless
- Drill: 82% cordless
- Multi tool: 58% cordless
Cordless impact drivers and drills have a significant impact in this portable power tool category. The next most common item in the mix, the cordless multi tool, is still 24% less than cordless power drills.
Cordless. It's not just for tools anymore.
The impact of cordless technology is spreading to other categories as well. Battery technology is enabling a similar shift to cordless Outdoor Power Equipment. Recent years have seen the emergence of battery leaf blowers, walk-behind, and even riding lawn mowers. Currently, 20% of the ten outdoor power equipment products tracked are battery powered. The top battery powered products for outdoor power equipment are:
- Line Trimmers: 34% cordless
- Power Leaf Blowers: 31% cordless
- Hedge Trimmer: 30% cordless
Cordless portable power tools are more common than corded, but they have yet to take over every portable power tool product category on the market. What battery technology will change the landscape? Stay tuned for our post on battery technology to see what batteries are next that will revolutionize the market.
Here are 7 Key Factors To Conquer Your Competitive Analysis
Today, more companies than ever embrace the concept of data analytics. More data exists than ever before, in more areas than business owners would have dreamed just a decade ago. But with this proliferation comes a modern dilemma: how to make sense of all the available information. When competitive analysis exists for its own sake, those using it get lost in the quagmire. Your business analytics should focus in on what truly matters: how to understand the competitive landscape, and then use that understanding to improve strategic planning. With this in mind, these seven competitive factors should help you focus your competitive analysis.
1. Understand Core Products and Services
Every successful business begins with a product or service. When you move your company into analytics, you should begin with this core. Trying to collect data on the world creates a potentially endless loop of information that you cannot pull back into anything meaningful. Instead of looking at everything your business or a competitor does, focus on the core and what matters most to creating and building on success. This starting point defines the direction for the research and allows your analysis to take shape.
2. Long- and Short-Term Market Trends
The information that matters most to your competitive scan depends on many factors within your industry. For a company emerging into a new niche, some long-term trends in the industry may not matter as much as those short-term trends from more recent quarters. Conversely, examining longer-term data should not create panic if a temporary event creates an alarming data spike. Smart companies look at both long- and short-term trends, but dig deeper to examine the context within which those changes occur. By contextualizing competitive analysis within real-world circumstances, your organization can develop a more complete picture of the landscape in which you operate.
3. Focus on the Right Competitors
Similarly, overreacting to information about other companies in the same market space may be counterproductive when those companies do not compete directly with you. Identifying the competitors inside what Forbes calls the addressable market is key. If your company operates in brick-and-mortar locations without a heavy online presence, competitors operating outside of those physical markets have little bearing on your results. E-commerce trends will matter to anyone working online, but moving in closer to find the competitors penetrating the same markets makes the difference between effective competitive analysis and spinning your wheels in a muddy field of data
4. Focus on the Purpose of Your Competitive Analysis
Smart businesses constantly analyze the competition. But this should never be the end in itself; rather, companies must maintain a focus on the purpose of the analyses. As Entrepreneur states, the purposes of competitive analysis should include fostering strategies to develop a distinct marketing advantage. Collecting data and creating a picture of the competitive landscape serve as tools in the arsenal, rather than end goals in themselves. You should use the information you glean from analytics to build forward toward improving your positions within the competitive market.
5. Be Flexible As Data Shows Popular Trends
While data analysis should aim toward understanding the competitive landscape and building competitive advantages, this process works best when you build and follow a flexible approach to what you see. Data and insights may move in directions that do not align with your expectations or current understanding of the competitive landscape. When surprises pop into the equation, reacting and adjusting well to the new information places you in the best position to succeed. This may mean adjusting your strategies, re-assessing who serves as your primary competitive threat, or even capitalizing on new market opportunities outside your initial business model. Stay nimble by using multiple data sources, finding success where it presents itself, and moving quickly when your analysis turns up opportunities for your business.
6. Don't Respond Too Hastily to Competitive Analysis
At the same time, bailing out of a sound business strategy based on data emerging from your current competitive analysis should not be your first reaction. Competitive analysis identifies emerging and longstanding trends, but often your business strategy is built to withstand some of what comes out of this. When your organization develops a strategy based on market research and a firm understanding of itself and its capabilities, knee-jerk reaction to unfavorable data, or even to data that suggests new opportunities, can push you further from your goals. At times, a full understanding of the data requires you to make smaller adjustments while you stay the course.
7. Move Forward
All of the competitive analyses your company conducts should be part of a forward-looking strategy. You need to look to the past and present as a way of directing moves into the future: for both the industry and company. Analytics necessarily focus on historical data as the starting point; you cannot collect analytical information on what has not yet occurred. But if you remain mired only in what has been without incorporating the information into a set of goals and expectations, you will miss out on the full potential of competitive analysis. Instead, take the historical information you have and identify the trends you can use to chart a more effective course--both to define more clearly what success should include, and then to drive toward that success. The companies that find ways to organize this information within a coherent strategy for the future gain significant advantages over those that fail to do so.
TraQline Competitive Analysis
Competitive analysis in the business world allows companies that work effectively with new information to grow. Not only does historical and current information help your organization adjust on the fly, but emerging trends that the data reflect can help clarify your corporate visions and identify powerful strategies to take advantage of the changing and emerging competitive landscape.
The market research experts at TraQline keep a pulse on these competitive factors as well as market trends, consumer behaviors, and competitor analysis of a variety of different industries. Contact TraQline for the competitor analysis support you need today!
Bottom Line: Urban & Rural targets are different (& similar)
When it comes to urban and rural customers in the USA, there are as many similarities as there are differences. The challenge of marketing to each of them rests not only on understanding the similarities or these two groups, but also learning how the differences can help marketers better communicate directly to them.
The Urban and Rural Communities
Let’s start by understanding the definitions and statistics surrounding rural and urban:
- U.S. Department of Agriculture defines “rural” as everything outside of a metropolitan area.
- The USDA defines “metropolitan” as any county which has a city of 50,000 or more residents and its immediate adjacent counties.
- When the USA was founded, over 90% of the population lived in a rural area. Today only 15% of Americans (around 60 million) live in rural communities.
- There are roughly 250 million Americans living in urban areas.
- Los Angeles has the nation's highest level of density with roughly 2700 people residing in each square mile.
The Truth About Division Between Rural and Urban Americans
In an increasingly divisive landscape, it’s easy to draw lines between rural and urban Americans. And to an extent, many of the stereotypes surrounding both urban and rural populations can be explained by examining the economic and social contexts in which both populations live.
Despite the rhetoric frequently thrown around online and in real life, there are similarities between urban and rural consumers, and context that drives both of those similarities. And while there are key differences between how urban and rural shoppers make decisions, we can also examine what drives those differences.
Where the Paths Cross: Market Similarities
Marketing professionals are keenly aware that one of the major influences on the buying behavior of Americans is characterized by the cultural impact of their separation into urban vs. rural customers.
Globalization has also created many similarities which may not be evident when viewed culturally, but when viewed on a spreadsheet these similarities become evident.
These are essentially two American subcultures that exist. As such, each group can be considered different potential customers. But before separating them into different marketing strategies it is important to keep in mind the fact that there are distinct similarities between the two – which include:
- Differing levels of status and approaches to each level often transcends the rural v. urban divide
- A great deal of interaction between differing social positions and class status
- Multiple concentrations of very specific types of purchasing behavior
- A great influence exerted from one social strata to the next
In other words, both urban and rural customers live in communities that have roughly the same social structure, and those structures tend to behave in similar manners within each of their own differing contexts.
Consumer Distinctions Persist
Despite the similarities, the fact remains that there are still significant differences between customers living in rural as opposed to urban environments. For example:
- Poverty is more prevalent in rural areas – Statistics show that urban poverty tends to be more concentrated because of the nature of cities themselves, and thus it is more visible as a result. But rates of poverty have long been higher within rural communities, which is worth taking into account when considering marketing approaches in non-urban areas.
- Disabilities are higher in rural areas – The percentage of urban Americans with physical disabilities is a little over 11% whereas it is above 17% for those in rural communities. The takeaway for marketers gauging customers' behavior is quite simply that disability matters in rural America.
- Job growth is stronger in urban areas – Translated into customer behavior this reality means that for the rural customer, the Great Recession has not yet ended. A number of factors are behind this phenomenon from mechanization to global influences, but at the end of the day marketers must keep in mind that there is simply less buying power in rural America, and customer behavior reflects this objective reality.
- Entrepreneurs are prevalent in rural areas – One of the biggest differences between the U.S. economy and most others is the number of small start-up enterprises that spring into existence every year. Americans have an entrepreneurial spirit, and this is definitely true in rural America despite the other economic challenges mentioned above. In fact, it is the very absence of industry and salaried job openings in most rural communities that is driving the entrepreneurial surge in these areas. It is frequently the only choice rural residents have to generate new income streams. And it's a reality marketers are well served to be aware of.
The Bottom Line
The bottom line is that the traditionally conservative buying habits of rural America reflect the objective economic context of their lives, just as the somewhat more free-flowing lifestyles and buying behaviors of urban Americans reflect theirs.
The challenge for today's marketers is to know both urban and rural communities' objective similarities and differences and approach the respective customers accordingly. If you are in need of research information, TraQline is here to help! Contact our market research professionals to learn more today!
Walmart’s Douglas Tires gets Rolling with Customers
We have published an updated version of this post to better reflect the tire market in Q2 2019. You can read the updated version here.
The allure of the open road has long been a part of the American mythos. Even as fewer teens are jumping at the chance to get their driver’s licenses, owning and caring for a car is still a part of our collective psyche. As generations of Americans have hit the open road in cars of all shapes and sizes, good tires have been a key component in those road trips. In honor of the SEMA Tire show, here’s a look at what’s shaking in the otherwise calm and unchanging Tire market.
Stability At The Top
Three brands founded in the early 20th and late 19th Century have consistently held the top spot in the US Market. Goodyear and Michelin have repeatedly come in 1st and 2nd in terms of units sold, with Firestone coming in 3rd.
Rumblings Below
While the top three tire brands have held steady, there’s been some movement in the ranks. Most notably, Walmart’s in-house tire brand, Douglas Tires, has been gaining traction. They’ve seen significant YoY unit growth for the past two years, in terms of tires per ticket. This growth is also reflected in Walmart’s position as a tire outlet. This recent growth in Douglas Tires has come at the expense of the brand with the largest share: Goodyear. While they are still the number one player, Walmart appears to be shifting away from Goodyear. They are increasingly moving towards lesser-known brands with smaller market share.
Factors for Growth
There are multiple factors that have led to this growth. For those consumers buying tires, Walmart, one of the nation's largest tire sellers, is drawing more people into its store. Additionally, both its draw rate and close rate have been on the rise for several quarters. In the four quarters ending September 2017, Walmart drew 16% of shoppers and closed 69% of tire sales compared to 15% and 67% respectively just a year ago.
Walmart’s in-house brand is gaining, and most of those gains come at the expense of Goodyear. As the brand mix at Walmart has shifted, you can see an almost equal gain for Douglas. For example, where Goodyear’s market share at Walmart two years ago was nearly 30%. However, the most recent statistics show a 6 percentage point drop for Goodyear while Walmart’s house brands grew from 16 to 21 in the same time period.
Fluctuating Tire Costs
The average price paid per tire for Walmart last year was 30% less than the industry average (WMT=$126 vs. the industry= $158). This is a result of slightly fewer tires being sold per transaction (2.7 at Walmart vs. 3.0 for the industry), smaller (and less expensive) tires being sold, and tires being sold at a lower price. Consequently, despite Walmart’s tire growth in units, the in-house brand makes a very small impact in overall dollar share, just breaking 1% of the market.
Additionally, the lower average price paid per tire for Douglas Tires is more appealing to Walmart’s target demographic. Households making less than $50,000 per year make up 63% of Walmart’s tire purchasers. That same demographic only makes up 42% of tire purchasers nationally.
Walmart has also done well at building brand loyalty in its Douglas Tires. Almost a fourth of consumers indicated that they chose Douglas Tires brand because it was a brand they’d previously owned. This puts them only a few percentage points behind Firestone for brand loyalty; though Walmart still trails behind Goodyear and Michelin for brand loyalty (34% and 47% respectively for the year ending September 2017).
Staying Ahead of Tire Trends
While there haven’t been any major changes in the Tire market over the last few years, there are shifts if you know where to look. TraQline is designed to help you identify even the most subtle changes and trends in your industry and market. This helps your business continue to reach consumers at every turn. Much like the open road, it’s mostly smooth sailing with just enough unknown to keep things exciting. Are you in the tire industry at all? Let us know your thoughts either by tweeting us @TraQline, or dropping a note on LinkedIn. If you are looking for a way to stay ahead in the automotive industry, consider partnering with the research experts at TraQline. For the insight you need to reach your target audience amongst the ever-changing trends, contact at TraQline to get started!
Private Label vs Branded Products: 6 Insights You Can Use
It wasn’t that long ago that private label brands were little more than slightly lower quality generic products. They came in plain packages with big clunky letters stating the package's contents in the simplest possible terms.
While the days of plain and block lettered packaging are essentially long-gone, the private label brand strategy some retailers employ in order to successfully compete with branded products hasn't kept pace with consumers' demands and expectations. Without such a strategy, retailers are frequently short-changing themselves at a time when product leverage is more important than ever.
A Private Label Brand Strategy Cheat-Sheet
There is no one magic bullet for achieving private label brand success. And in examining the approaches employed by the companies who excel at building competitive private label sales, a number of crucial factors stand out.
1. Project Goal
For a private label brand strategy to be successful, it must begin with a core intent of the overall effort. Simply offering a lower-priced alternative is no longer sufficient for today's increasingly sophisticated and informed consumer. This can be anything from establishing a clearly differentiated cohort of product brands which targeted consumers can easily identify, to leveraging brands as springboards for innovation. The most important element here is to attempt to stay ahead of evolving trends and changes in an identified customer base. Sears’ Kenmore brand is an example of partnering with key manufacturers to implement unique features (even before the manufacturer that makes the appliance implements them) in order to differentiate and lure customers to the Kenmore Brand.
2. Customer Identity
Having a clear image of your target customer is crucial to a dynamic private label brand strategy. Is the goal to retain existing customers, pull in new ones – or a combination of both? Have you identified consumer dissatisfaction with an existing branded product that opens the door for your private label? Each of these objectives requires two things: understanding the demographic who currently purchases your product, and identifying where any gaps might be in your target market. An in-depth understanding of your market's demographics will allow you to pinpoint your target with greater precision.
3. Emotional Involvement
One of the most important lessons that Steve Jobs’ career has taught the business world is the vital importance of style. How a consumer feels about a product is something that every private label brand strategy must take very seriously. The simple truth is that consumers tend to gravitate toward, and stay loyal to, brands that succeed in creating an emotional connection with them. Companies with exclusive brands that succeed can all attest to the importance of this component. Whole Foods 360 and Safeway's Organics brands are two prime examples of this approach. These are two examples of how retailers have figured out what consumers are looking for and developed a private label response that can compete with any branded product on the market today. They have succeeded in two ways: understanding consumer desires and developing a seductive product line – aesthetically and substantively – to meet it.
4. Develop Clear Borders
One mistake several retailers have made over the last few years with their private label brand strategy is to over-saturate the identity. Seeing success in one area has led some retailers to extend that private label too broadly throughout their stores: both across product lines and up and down the price range offered. The danger here is to dilute the impact of the private label to such a degree that it loses its special appeal to consumers. Successful approaches have applied private labels with careful logic that corresponds to the judicious use of product positioning. This, of course, works hand-in-hand with the already mentioned elements of the overall strategy.
5. Understand Currents
That is, where things work and why. Understanding consumers' needs and desires is one thing – and an important one – but right next it comes the importance of where to offer your private label brands to maximize their effectiveness. Will they be just on the shelves of your brick and mortar locations? Or online too? Or, conversely, only online? And if you have decided your private label brand strategy calls for utilizing multiple channels, will they each employ a uniform presentation or one customized to fit each channel? This approach to your strategy requires careful attention to balancing the diversity that accompanies going beyond one style offering in just one venue. It can call for a tricky back and forth period of experimentation before the right balance is struck, but the payoff can be significant and is certainly worth the effort.
6. Innovation
Private label brand strategy is perfectly suited for – and works best when combined with - an eye toward uniqueness, mesmerization, and innovation. Such a strategy works quite well in collaboration with independent manufacturers and vendors who are more than willing to join forces to push the envelope on enhancing products that tantalize consumer desires and needs. Keeping an eye out for such opportunities is the essence of both a win-win approach and a key factor in what drives successful private label viability.
Building and Growing Your Brand With Data
The bottom line is that a successful private label brand strategy is, at heart, very adept at mimicking the marketing approaches employed by national branded products that have come to set industry standards for consumers.
Consistent branding and well-thought-out marketing are what underlie branded success – and will, therefore, be central for private label brands as well. TraQline helps you inform your marketing strategy with consumer insights, behaviors, and trends. This customer insight will help you build your brand and reach your target market. With our market research services and industry insight, you can take a data-driven approach to expanding your company. Contact the TraQline experts to get started today!
Do you have experience with private label products? For you, what is the most important factor to consider vs. branded products?
Spending Spree: Where Millennials Spend Their Money and Why
The much-maligned millennial generation has been talked about endlessly and accused of killing everything from napkins to golf. So when millennials aren’t busy destroying industries, where is their money going? We decided to take a look at TraQline’s data to see how millennials compare to the generations who’ve gone before. While it’s hard to generalize what millions of millennials spend their money on, we can examine which categories they’re outspending other generations, what brands they’re spending on, and how they’re buying those products. These first waves of digital native shoppers are spending in categories that reflect their current lifestyles and needs, and are drawn to brands who echo their ease with technology and willingness to go beyond brick and mortar to find what they want.
Where Millennials spend their money
The top 3 categories purchased by millennials account for 64% of all the dollars that the generation spent across the 9 TraQline categories:
- Consumer electronics (25% of Millennial dollars spent)
- Major Appliances (24%)
- Computer/Communication/Home Office (15%)
On the other hand, Millennials spend significantly less than their older peers in the following categories:
- Building or Plumbing supplies (0.6% of dollars spent by Millennials)
- Kitchen & Bath Improvement (0.9%)
- Home Improvement (7%)
The generation that grew up with tech comes of age
Millennials tend to be digital natives, and their spending reflects that. One-quarter of millennials’ spending mix goes to consumer electronics and 15% on computing and home office products. Not only do Millennials place a high value on their tech, but an increasing number of workers choose to telecommute, and/or continue to do work from home during evenings and weekends. We may begin to see even more money being funneled into home office products by this group.
A recent HSBC survey indicates that only 35% of American millennials are homeowners. With millennials in the early stages of starting up their own households, spending mix is significantly higher in categories such as Major Appliances (these expensive purchases make up 24% of millennials’ dollars spent). At the same time, older generations, with their higher incidence of homeownership, are outspending millennials in home improvement areas, such as kitchen & bath, home improvement products, and lawn and garden. These products designed for upkeep and upgrades are naturally purchased more often by those generations who have been homeowners for years.
Brands that Millennials prefer, and how those brands fare with other generations
With tech and appliances being the top purchases for Millennials; and given that tech companies such as Samsung and LG also make successful “techy” major appliance products, the top three brands might be obvious. Accounting for about 28% of their dollar mix – these three companies historically are perhaps best known for their consumer electronics. Samsung, which wins the largest percentage of millennial dollars, has married technology and design to help attract Millennials, as have #2 and #3 - Apple and LG.
It's not all high-tech gadgets and consumer electronics for millennials though. In terms of dollars spent, General Electric and Whirlpool both rank highly with millennials when it comes to making major appliance purchases.
Do millennials shop more online than other generations?
As noted earlier, millennials are digital natives. Most millennials grew up with the rise of the internet and were in high school or college for the ascendency of smartphones. As a result, millennials are more likely to shop online than any other generation. Additionally, almost 22% of all dollars millennials spend on consumer durables is spent online. Only the Gen Z generation – just now growing into adulthood - spends more money online than millennials. Some of the categories where millennials are shopping online significantly more than other generations include:
| Millennial top categories | Next most active generation |
| Furniture & Home Accessories (51%) | Gen X |
| Home Improvement Products (32%) | Gen X |
| Lawn & Garden (46%) | Baby Boomers |
| Consumer Electronics (71%) | Gen X |
That isn’t to say that other generations aren’t shopping online. In fact, members of the Silent Generation (approximately age 72 or older) are more likely to shop for power tools online than the more e-commerce savvy millennials. Additionally, Boomers and members of Gen X are significantly more likely to seek out both small and major appliances online.
How to Reach Millennial Consumers | TraQline
Retail for consumer durables is definitely changing as new generations come of age. Millennials are still participating in the economy, despite the doom and gloom of some news reports. Where they concentrate their spending may be new or different, and reflects their lifestyles, but there’s still plenty that is familiar to older generations. We may even see a shift in how millennials spend as they begin to establish households, though the brands themselves may vary from what previous generations have preferred. What have you noticed about the millennial consumers coming to your stores or buying your products? We’d love to have your insights to add to our data! Leave us a message on LinkedIn, or tweet us @TraQline! If you are ready to reach millennials and other target demographics, let the TraQline data help. With insight into a wide variety of industries, TraQline is here to help your business stay ahead of trends and changing markets. Contact our experts to learn more about TraQline today!
A Brief History of Nintendo
When it comes to video games, there’s something both iconic and endearing about Nintendo. Increased competition in recent years has caused the company to no longer be at the top of the flagpole, but that doesn’t diminish their staying power & legacy. Originally founded to make playing cards in 1889, Nintendo released its first Nintendo Entertainment System (or NES) to the United States in 1985. At the time, home video game consoles were on a major decline in the US. The NES was not a rousing success right off the bat but sales began to pick up in 1986 once the NES was bundled with the blockbuster Super Mario Bros. In its heyday, the NES could be found in one of every five homes in the United States. Characters like Mario and Luigi, Yoshi, and Donkey Kong are part of our cultural lexicon. But most would say that Nintendo’s heyday has since passed. Unit sales for Nintendo branded video game systems has been on a steady decline since 2010. Increased competition from Sony and Microsoft (home of the PlayStation and Xbox, respectively) have eaten away at Nintendo’s shares.
Console innovation is at the core of market share gains
Console sales are cyclical events. It takes many years for a manufacturer to develop a console innovative enough to replace their last system. Typically, following the introduction of a new well-featured console, share for that brand will spike. While getting share is one thing, maintaining market share well into a product’s maturity becomes difficult for the major players. As such, console makers rely not only on new consoles but also proprietary games (like NES’s Super Mario Bros. or Xbox’s Halo) to drive sales well into the product’s life cycle. Nintendo’s last successful and innovative product run was the Wii – which launched in 2006.
The success of the Wii was due to its innovative control system. The Wii not only made the case for motion-sensitive controls, but it appealed beyond hardcore gamers - to the more casual crowd (case in point, my parents love Wii golf.) Many of the games released with the Wii took advantage of the motion sensing controllers to introduce games that anyone could enjoy. Games appealed to more casual gamers, certainly, but more dedicated gamers weren’t left out—suddenly the controller could be a stand in for a character’s sword as easily as it could a tennis racket.
The Wii U(h-oh)
Following the success of the Wii, the introduction of the Wii U was something of a disappointment. While the integrated tablet and controls in one was innovative, there weren’t any major use cases for the system. Despite advertising that you could play games on the control screen, rather than on the television, users were still tethered to the console, if not the television screen. Additionally, Nintendo strictly limited games from outside Nintendo’s developers. With no major blockbuster games from Nintendo and very few games from outside studios, there was little reason for anyone except hardcore Nintendo fans to invest in a Wii U.
Switching things up
Things are brightening for Nintendo with the introduction of the Switch. Per TraQline’s market share tracker of 600,000 annual surveys, in Q1 2017, Nintendo claimed 23% of the unit share for video game systems. The Switch, which can be both a dedicated console hooked up to a television or a portable gaming device, delivers on the earlier promises that the Wii U made. Additionally, the Switch supports multiplayer games even when being used as a portable gaming device. Nintendo has also relaxed its stance on 3rd party games, and already slated content from popular developers. TWICE Magazine notes that there’s been a better than expected demand for the Switch, and that the company is expecting to sell more than 20 million physical games for the console this year. Additionally, several popular franchises, from Minecraft to Pokémon announced Nintendo Switch compatible games at this year’s E3 conference.
Nintendo as the innovator
Nintendo has stayed focused on innovation and fun, rather than the hardcore gamer. Games for PlayStation and Xbox skew hyper-realistic as compared to the more cartoonish, stylized graphics that characterize Nintendo’s game catalogue. While Sony and Microsoft can play down to Nintendo’s graphics capabilities, Nintendo is unable to play up to theirs. This limits the capabilities of the system, and the audience, thus forcing a greater emphasis on innovation and a strong catalogue. When they miss on innovation (such as controls, interactivity, or other) or top games, the impact is felt on the bottom line.
On the other hand, Nintendo tends to be the real innovator in terms of gaming systems. The original NES brought video game consoles to the mainstream. The N64 was groundbreaking for its time. Even missteps, like the much-maligned Wii U, or the Virtual Boy, an even earlier flop, were still unique takes on game play. Ultimately, Nintendo appeals to consumers by playing to its strengths instead of trying to compete in areas that it tends to be weaker. As gaming preferences shift, will this storied brand will find new ways to delight, or be relegated to history? Let us know what you think—either leave us a note on LinkedIn or tweet us at @TraQline.
Sources
http://gizmodo.com/the-surprisingly-long-history-of-nintendo-1354286257
https://www.fastcompany.com/3050016/unraveling-the-enigma-of-nintendos-virtual-boy-20-years-later
https://www.theatlantic.com/technology/archive/2016/12/super-marios-sorrow/511187/
http://gamestudies.org/1302/articles/picard
https://www.forbes.com/companies/nintendo/
https://en.wikipedia.org/wiki/Nintendo_Entertainment_System
https://www.wired.com/2010/10/1018nintendo-nes-launches/
http://www.gamasutra.com/view/feature/167392/sad_but_true_we_cant_prove_when_.php
Amazon Online Retailer Share: Lame or Dominating the Game?
While Walmart still holds the top spot as the world's highest-grossing retail establishment, Amazon holds the top U.S. online retailer position, falling just behind the Chinese firm Alibaba as the world's largest online seller. An annual report from Statista.com shows that Amazon was able to amass almost $136 billion in net revenue during 2016 (an increase of almost 29% over 2015)– and Amazon's reach continues to grow.
Amazon and Amazon Marketplace's power is far-reaching but doesn't dominate all sectors of durable goods’ online sales. While some of these aforementioned sectors do have low rates of internet sales to begin with, recent data offers some hope for other online merchants when it comes to several categories of both large and small consumer durables.
Product Categories Where Amazon Has Dominant Online Market Share
Amazon is active in nearly every U.S. online commerce category and accounts for almost 40 percent of online durable goods sales, according to TraQline, The Stevenson Company’s survey of over 600 thousand consumers per year. TraQline also found that the retail giant enjoys a substantial lead in quite a few categories. Listed below with Amazon’s share of the online market, these product categories include:
- Safety & Security: 59% (down significantly from 2015)
(Smoke detectors, carbon monoxide detectors, and fire extinguishers) - Personal Comfort: 58% (up significantly from 2015)
(Air filters, humidifiers, dehumidifiers, portable fans, portable heaters, and air cleaners) - Portable Audio: 56% (up significantly from 2015)
(Stereo headphones, portable MP3 players, radios, boom boxes and CD players) - Clothing Care: 56% (up directionally from 2015)
(Sewing machines and clothes irons) - Water Products: 54% (up significantly from 2015)
(Water filters, replacement filters, water heaters, water softeners, and water dispensers) - Home Audio: 54% (up significantly 2015)
(Clock radios, home theater systems, home speakers, shelf stereo systems, separate CD players and receivers) - Communication: 53% (up directionally from 2015)
(Cordless telephones and GPS receivers)
While capturing less than half of all online purchases, Amazon still enjoys an impressively large percentage of internet sales in the following categories:
- Kitchen Electronics: 49% (up from 2015)
- Cameras & Camcorders: 47% (up directionally from 2015)
- Hand Tools: 45% (up directionally from 2015)
- Video Gaming Systems: 45% (up directionally from 2015)
- Computing: 43% (up significantly from 2015)
Exceptions to Amazon's Dominance
As mentioned previously, there are also several categories where Amazon not only lags behind, but falls far short, with an online market share as low as 7 percent. The most notable of these, with Amazon's online market share, are:
- Tires: 8% (TireRack.com leads the category with 19%)
- Major Appliances: 8% (Sears.com leads the category with 21%)
- Flooring: 7% (HomeDepot.com leads the category with 35%)
- Kitchen Cabinets & Countertops: 12% (Kitchen Specialty leads the category with 18%)
Analysis of Amazon's Market Performance
Amazon positively dominates many consumer durable categories, but there are a few categories where Amazon's lack of online market share stands out. Larger, durable goods (such as appliances) and items that require installation (such as tires and flooring) are gaps for Amazon. Note that consumables such as soap, diapers, etc. are not included in this analysis. For these larger items, consumers need to touch, feel, and compare them. The added component of professional installation for tires and flooring further complicate Amazon’s challenge in gaining share for these categories.
It is important to note, however, that the categories where Amazon falls short do not have a high occurrence of online sales in the first place. Online purchases only account for 6 percent of total Tire sales and 5 percent of total sales for Flooring. Further, only a slight 3 percent of Auto Jacks & Batteries are bought online. While consumers tend to purchase more Major Appliances online than the aforementioned products, only slightly more than 1 in 10 are internet sales. So, although Amazon may not capture many of the online sales for these categories, the retail giant isn’t necessarily missing out on large profit opportunities as a result.
Conclusion: Amazon Online Retailer Share
For online retailers competing with Amazon, whether large or small, knowing the market share percentages is critical. Competing with the online giant in areas where it dominates the market could be disastrous. Likewise, concentrating on categories for which it falls behind in the overall market could have big payouts. In today's fast-paced, data-driven sales environment, having and understanding the numbers are critical for success.
TraQline Market Insight and Consumer Data
Since 2000, TraQline has been one of the industry’s leading providers of market share and consumer behavior for brick and mortar and online sales of over 200 different consumer durables categories. Our market research professionals offer a wide range of tools, resources, and support to help you stay ahead of trends and keep your business moving forward.For more information or for Amazon’s (or Amazon’s competitors’) historical shares, contact TraQline at info@traqline.com.
Editor's Note: This article was originally published in May 2016. It has been updated to reflect 2016 TraQline Market Share data
EXERCISE EQUIPMENT STATISTICS
1 IN 4 EXERCISE EQUIPMENT PURCHASES ARE MADE BY MEN & WOMEN TOGETHER
When it comes to the “Who, What, Where, When, How, and Why’s” of consumer exercise purchases, TraQline’s got you covered. An internet survey of over 600,000 consumers per year, TraQline gives anyone in the exercise equipment industry a better look at the marketplace, brand and retailer market share, purchase drivers, online sales, evolving feature trends, and more.
TraQline collects this information by product category, including exercise equipment. We collect equipment market metrics including online market share, dollar share, unit share, and draw/close for exercise brands and manufacturers.
Recent Exercise Equipment Market Statistics
Check out this infographic for an illustrated overview of the Q4 2016 Exercise Equipment market
Flex those muscles! Amazon closes exercise equipment sale 75% of the time. Find out their draw rate with our infographic- Nordic Track gets 14.2% of consumer dollars- check out who their closest competition is with our infographic
- 1 in 4 exercise equipment purchases are made by men & women together- See who else is buying with our infographic
- How does the price you pay with Sears for exercise equipment compare to the industry average?
- 42% choose exercise equipment brands because of desired features- Find out what else draws consumers with our infographic
- 1 in 5 consumers buys exercise equipment based on its brand name. See other whys behind the buys here
- Exercise equipment buyers at Walmart spent $240 on average, see how the industry average compares with TraQline
- Previous experience influences 17% of exercise equipment buyers- learn what else drives shopper behavior here!
- Amazon draws in 24% of exercise equipment shoppers- who is their closest competitor? Get the answer with TraQline
- When it comes to exercise equipment, Sears wins just over 14% of consumer dollars. Get more info with our infographic
- 48% of buyers buy their exercise equipment online- See how that compares to in-store shopping with TraQline
- Schwinn Fitness gets almost 3% of consumer dollars. Find out who their biggest competition is with TraQline
- Was more exercise equipment bought online or in-store? Find out with TraQline’s infographic
- Sears closes 66% of exercise equipment sales, what percent of buyers do they draw in? Find out with our infographic
- Walmart draws in 26% of all exercise equipment buyers- find out how often they close sales with our infographic
TraQline Exercise Equipment Research
Get the research help and the market statistics you need with TraQline. Our insights are designed to help you keep your business ahead. Contact our market research professionals today to get started!