Retail Observer

RETAILOBSERVER.COM MARCH 2017 66 L ooking back over the Major Home Appliance (MAJAP) business in 2016, on the surface it would appear it was a year of…. normality? According to Traqline 2016 reporting, going back to 2014 the dollar sales mix of the core home appliance categories remained relatively unchanged in 2016. The refrigeration category, led by the continued growth of the French door business, maintained its mix lead over laundry as the largest business unit in MAJAP land. The dishwasher and cooking categories have been remarkably flat as a percent of the total sales since 2014 as well. Looking solely at the categories, not much has changed since 2014. Of course, there have been changes to the brand and retailer mix of business. Kenmore's continued share decline as Samsung and LG gain. While Sears share losses widen, the home improvement and independent retail channels earned more customers with each unit sold. All of this really does matter and is important to the planning and capture of opportunity, however looking back at the product categories in 2016, all was normal. It has now been over 10 years since any category has had any revolutionary product innovation that changed how customers viewed the kitchen or laundry room. In refrigeration, it was the mainstream adoption of French door, now over 10+ years old. In laundry it was high efficiency front load laundry, also now over 10+ years ago. The introduction of stainless steel is several decades old, and its influence on mainstream kitchens is also 10+ years old. The reality is that over the past 10 years, most of the product innovation has been evolution, not revolution. So what happened in 2016 that may have changed the trends of the appliance industry? The black stainless product introductions took hold and created some opportunity far exceeding forecast and expectations. According to Traqline reporting, the black stainless color option represented 3.8% of the core appliance industry in 2016, however performance was certainly constrained and did not capture all of the demand the new look was creating in 2016. With more product introductions and a greater focus from all of the major brands, the black stainless category will continue its growth in 2017 and beyond. However, black stainless appears to be a shift of sales mix from stainless steel. It remains to be seen if black stainless will drive overall kitchen growth in the future, or simply a short term fad. Either way the customer's connection with black stainless feels more like an evolution and less like a revolution. Connection—that also happened in 2016. For years the appliance industry has been talking about the "connected kitchen" and how connected appliances are going to change the way we cook and clean. For years it has been simply that: talk. Something remarkable happened to the connected kitchen in 2016. Connected Kitchen, meet Alexa and Google; Alexa and Google, meet Connected Kitchen. It was a simple introduction of products that made their way to market, but as the real benefits to the customer started to show, so did the customer excitement. Smartly connected products from Samsung, GE and Whirlpool started to inspire customers with beyond simple notification benefits. Benefits like telling you what was inside your refrigerator as you made your way down the grocery isle. Or connecting your music and entertainment in the kitchen to the rest of your home. Making it easier to order more milk to be delivered as you swig down the last bit from the jug standing in front of your refrigerator, or setting a timer to turn off your oven by simply asking, instead of touching. These benefits began to make connected kitchen real, and could mark the start of a kitchen appliance revolution. Although 2016 will go down and reported as a normal year, there was nothing normal about the products that emerged and how customers will view major home appliances in their home. 2016 could prove to be a marker in appliance history that delivered revolutionary product innovation. And if history repeats itself, appliance retailers can look forward to a decade or more of strong black stainless connected kitchen demand. Derek Mattila Appliance Trends Derek Mattila, Director of Merchandising- Home Appliances Nationwide Marketing Group RO 2016! THAT JUST HAPPENED?

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