More Consumers are Purchasing Home Products Online, NPD Finds
In-store sales still capture roughly two-thirds of all dollars spent on the primary home-products industries, but the gap is closing fast. According to new research from NPD, the percentage of online buyers who are purchasing small home appliances, housewares, home textiles, and major home appliances is on the rise. Between 17 and 20 percent of the U.S. online buying population purchased something from the small appliances, textiles, and housewares categories in 2017, while 2 percent bought higher priced major home appliances.
NPD’s new Checkout E-Commerce Tracing report collected information from more than 3 million consumers through data provided by Slice Intelligence. According to that data, every single one of those product segments was up over 2016.
“E-commerce is an increasingly important part of the home industry’s channel strategy,“ Joe Derochowski, executive director and home industry analyst at NPD, said in a statement. “As consumer expectations around convenience, product assortment, and value elevate, so will our industry’s online opportunities.”
Though the percentages for the home products categories were on the rise, NPD found that, overall, these products are not purchased online very frequently when compared to other industries. For example, online shoppers only purchased small appliances, housewares, and home textile products online an average of two times per year in 2017, and major home appliances were only purchased once.
“The equation for success goes beyond a traditional view of brick vs. click – it’s about understanding how to reach more buyers, get them to buy with more frequency, and give them a reason to spend more on what they purchase,“ added Derochowski. “Regardless of channel, we need to focus on innovative products, and innovative approaches.”
The preference for shopping for major appliances in store was also apparent through data NPD shared with Dealerscope earlier this year. In 2017, the U.S. appliances market was valued at around $46 billion. Roughly $3.78 billion of that value was generated through online sales—a 44 percent growth year-over-year—but that still represents less than 10 percent of consumers’ total major appliance spend last year.
Derochowski told Dealerscope at the time that online major appliance sales would continue to experience growth—as is to be expected in this day and age. But this segment in particular has some serious hurdles it needs to overcome in order to become a serious threat to brick-and-mortar major appliances sales.
“If I as a consumer try to put an appliance in my house and it doesn't fit, how do I return it and get one that does fit? You're relying on the consumer to make the correct choice, and this is where a lot of the planning, and the VR/AR will help the consumer buy the right product,” he said. “But if they end up accidentally getting the wrong thing and they want to send it back, can we do that in a way that's easy for the consumer and yet not run the manufacturer or the retailer out of business. That's where the magic is going to have to happen.”