About a quarter of American’s $7.385 trillion in personal consumption expenditures is spent on their homes. Spending on the four walls that shelter us topped $1.145 trillion in 2002, and spending on household operations, which includes all home furnishings, cleaning products, stationery and writing supplies, utility expenditures, and domestic services was $748.3 billion. Housing expenditures are rising faster than spending on household operations, as rock-bottom mortgage rates have encouraged more Americans to either buy into the housing market for the first time or trade up to larger, more expensive homes.
An intriguing factoid out of the government’s latest numbers on household spending is that after the cost of electricity, which we all know is going through the roof, the fastest-growing household expenditure category in 2002 was cleaning and polishing preparations, which advanced 8.4 percent to reach $66.8 billion. We can learn something as we consider why people buy things they don’t need. What’s happening in so many other categories of consumer goods is taking hold in the home cleaning category. Consumers‘ expectations are rising and they want an enhanced cleaning experience. The regular everyday brands of household cleaners won’t do anymore. Consumers demand more cleaning power with less effort, which ultimately means a better value. Marketers are responding by enhancing existing brands through better performance or creating totally new products that deliver a cleaning experience never available before. Products like the new Swiffer floor mop from Proctor & Gamble, or the range of cleaning products sold via television infomercials from Orange Glo—including Oxiclean, Orange Glo, and Kaboom—or the Mr. Clean Magic Eraser, which promises to erase away grimy wall stains, are positioned as twenty-first-century cleaning solutions. Because these products really deliver the goods, the companies will gain a loyal shopper who is willing to pay two, three, or even five times the price of the store brand for the extra cleaning performance.
End of Cocooning doesn’t mean end of spending on home
For the past 20 years or so, home marketers have enjoyed a time of remarkable growth as the nation’s consumers devoted their time, attention, and budgets, to home-related purchasing. Cocooning and nesting and all that these concepts imply were the dominant cultural trend. Because all ships rise with a rising tide, many home marketers and retailers enjoyed an extended period of strong and predictable growth.
With the dawn of a new century, some major home players began to sputter, but corporate inefficiencies and management misdirection could be blamed for these problems. As other, better-managed companies began to feel the pinch of reduced consumer spending, a slowing economy and negative impact from September 11 were credited. But something more fundamental was changing in the marketplace, and that is that consumers today are emerging from their cocoons and looking to reconnect with the external world.
Like all things, the cocooning trend must come to an end. It is in its death throes now and only the home marketers who recognize the signs and plan for a future without the spur of cocooning will thrive, even survive.
In January 2003, the New York Times reported that Bloomingdale’s and its owner, Federated Department Stores, are “gambling that the salvation for retail in 2003 is going to come from home furnishings.” Blooming- dale’s invested more than $40 million to open a 140,000-square-foot home furnishings store in Chicago in an abandoned Shriners temple. Federated likely has a winner in this concept, due to its impressive size and the intense attention it is receiving from upper management. Just because the cocooning trend is over doesn’t mean that consumers aren’t going to buy things for their home. In fact, Bloomingdale’s with its upper- income, luxury niche is likely to attract just the kind of customers—that is the mature baby boom generation of affluent shoppers—to make a go of it.
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