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The market for wet area products last year was described as inconsistent by many. Thankfully there appears to have been quite the turnaround as many suppliers have reported a fruitful last 12 months and are looking ahead, rather than around or behind them for fear of sinking.
GWA’s Marketing Manager, Jennifer Price, reports positive growth in the market for the Caroma and Fowler brands (amongst others) with a lift in residential activity concentrated around Auckland and Christchurch. There has also been a lift in the commercial side, especially around Auckland, she adds.
Of course, much of this buoyancy in the market is due to the increase in building activity in the Auckland and Christchurch areas, on top of the housing renovation work that continued throughout the recent economic downturn, points out Jennifer Price.
Another supplier that points to the “big two” – in terms of building activity – as key but not unique reasons for the improving market is Burns & Ferrall’s Jeffrey Busbridge.
“Our sales have improved mainly due to the improved market but also due to a lot of new product development we have been doing over the last couple of years that we’ve hit the market with, which has helped.”
STILL MADDENINGLY INCONSISTENT?
Over the last few years in the wet areas market, many pundits have pointed to the inconsistency of the market with some going as far as calling it “stagnant” or “fickle”. Has this changed over the last 12 months? Foreno’s Tim Baker is one supplier that doesn’t think so.
Foreno’s experience over the last 12 months is that inconsistency is still evident: “I guess it’s been quite patchy, no consistency – you’ll have one good month and then one bad one. I think there has been growth in the market but I think it’s been coming in hardware as opposed to the plumbing merchants.”
Also pointing to inconsistency is Jennifer Price at GWA. She comments: “It’s difficult to explain, one month things will be going great and things are happening. The next month will be a bit quieter.”
In contrast, Jeffrey Busbridge doesn’t see as much inconsistency for Burns & Ferrall on an annual basis: “We pretty much know what our turnover will be in any given month based on previous years it’s all the same. October and November are particularly strong and the other months are pretty consistent.”
RENOVATING THE MARKET?
Like many other categories covered in this publication, much of the success experienced in the market for wet area products in recent times is due to rising consents for new builds in the Auckland and Christchurch areas.
Tempering that his view may be different as the company operates mainly in the hardware channel, Tim Baker, National Sales & Marketing Manager for Foreno Tapware, sees the majority of the company’s business coming from renovations rather than new builds.
“Auckland certainly is more focused on renovation. With the price of housing these days I think people are looking to spend more money on renovating their homes.” But new builds are also starting to happen so that will probably drive those markets going forward, he adds.
The difficulty when it comes to looking at the impact of renovations on the market is getting exact numbers and figures to quantify scale and effect. And often the reason for a purchase isn’t obvious.
One supplier commented: “If for every renovation people had to get a permit and that information was released it would be great, but the reality is that people are in-store buying products before anyone realises there is a renovation taking place.”
Backing up this sense that renovations are gaining traction and significance in the market but are difficult to quantify, Sika’s Tony Smith is just one supplier that would like to be able to get a firmer handle on the number of renovations happening in the market.
“The renovation market is so hard to measure – quite often that stuff is not permitted so you’re not able to go somewhere and see the number of renovations that have been performed in New Zealand, it’s all guesswork.”
IS DIY TV SHOWING THE WAY?
Just as “food TV” and baking shows in particular have boosted interest in, and sales of, small kitchen appliances, so the proliferation of home improvement television shows has encouraged an increase in consumer awareness around products and fittings.
While many of these trends may have been evident before, interest has spiked according to suppliers consulted for this article.
When asked about the impact these TV programmes have had on the attitudes and tastes of consumers, GWA’s Jennifer Price points to the increasing popularity of freestanding baths for example.
“I think those shows have an impact on the kind of products that people are looking for. The advent of the free-standing bath was already happening, but it’s been encouraged by what consumers are seeing on home improvement shows. The whole aesthetic aspect and the use of space – people are thinking more carefully about how they use space – and what products will fit and give them the look they are seeking.”
Tim Baker at Foreno sees a shift in how the programmes themselves are targeting viewers, whereas previously they looked to inspirational / aspirational, top-end products, it’s as if the home improvement shows were now focusing on more attainable products.
Baker’s take is that the TV reno shows have made Kiwi consumers more aware of what they can get for their money: “People have realised renovations are not as expensive, certainly more affordable, than they previously thought.”
STYLE WITH SUBSTANCE
Covering this topic in previous years, this magazine found that consumers would look for cost effectiveness above all else. However that outlook was showing signs of change in the bathroom sector last year, and we hear there’s more of the same this year, with consumers tending to look for style first, followed by performance and price.
Looking at some of the trends that were on display at this year’s EuroCucina fair (see sidebar on page 33), style is certainly top of mind when it comes to wet area products for the bathroom. So what are Kiwi consumers looking for when it comes to wet area products?
Obviously this is not an exact science, as GWA’s Jennifer Price points out: “You’ll have some people who are price sensitive. They are prepared to sacrifice on style to get the cheapest price. On the other hand you have people who are looking for both brand and style.
“These consumers will seek out brands first and then make a style choice within those brands. I don’t believe there has been a change in the split between these segments, however the ‘style seekers’ have become more discerning and more informed about the products that they are looking for.”
Tim Baker at Foreno confirms that consumers buying for renovation purposes are very different from replacement purchasers: “I think what people are after is a degree of quality but they want assurance that what they’re getting is fit for purpose.
“I think price is less important if someone is doing a project, if they’re doing up a whole bathroom they’re looking for a style but if they’re just in the replacement market, they’re just replacing an existing tap or shower then that’s when price comes into it.”
But Tim Baker remains quietly confident that quality is more important than price right now: “I just get a feeling that people don’t mind spending a bit more.”
When asked his opinion about consumers’ current emphasis when looking for wet area products, Jeffrey Busbridge at Burns & Ferrall agrees that, although style is important, price is still highly influential.
For example: “There has always been a trend to have good tight radius square bowls. They used to cost a lot of money. What’s happened in the last two or three years is that people aren’t as prepared to pay those higher price but they still want the look so a lot of the market has gone to the mid-range.” Meaning, as usual, the canny Kiwi consumer goes where they can buy the same style more affordably.
Burns & Ferrall’s Busbridge also feels that smaller radius sinks have and will continue to see some growth going forward. Speaking about the EuroCucina show, he also notes the proliferation of standalone bath tubs and small radius sinks.
HIGHER AWARENESS / BROADER AVAILABILITY
Many wet area products, like sinks or waste disposal products have become more broadly available to consumers. Has this impacted much on the mind set of consumers, having more big box stores and appliance retailers stocking these products?
The general feeling from around the market is that consumers are more educated about the benefits and the specs of plumbing products and are therefore more conscious of what they are looking for.
Burns & Ferrall’s Jeffrey Busbridge says products being available through multiple channels has played a part in this: “With sinks going into retailers such as Kitchen Things and Harvey Norman, we’re getting people in our showrooms now that are much more aware of sink brands, the pricing, and the models and ranges available.”
He continues: “The consumer used to have little say into which sink went into their kitchen – it was put in by the joiner and people didn’t put a lot of thought into their sinks. These days that has definitely changed.”
Product knowledge and sharing that knowledge with the consumer is a fundamental when it comes to “wet” kitchen products. Backing this up, Parex Sales & Marketing Manager, Barnaby Thompson, says that when promoting certain products, such as the company’s InSinkErators and Hot Taps, emphasising functionality and performance is important when looking to generate sales.
“We need to make sure consumers don’t forget about the hot water taps and especially the waste disposal. If someone is spending a fortune on a kitchen and they haven’t got a disposal unit then what are they going to do with their food?
“It creates a bad smell in the kitchen, a lot of people don’t have compost bins, so what do they do with excess food? The big message for waste disposals is that they are hygienic and they are also convenient.”
IS SUPPLY MEETING DEMAND?
Merchants and retailers particularly have been working hard to optimise their stockturn in recent years. But this, combined with the market’s apparent ongoing unpredictability, raises the perennial quandary around ensuring stock levels are adequate to meet the demands of the market.
As one supplier put it: “One of the biggest issues for us as a manufacturer is making sure that we’ve actually got the right products to fill the shelves – that’s a real critical thing at the moment, it’s so hard to forecast.”
GWA’s Jennifer Price is another that sees this as an issue
for suppliers: “There is increasing pressure on the retailers to manage their cash flow and that in turn causes issues for the supplier. With the unpredictable market there is less of a buffer for when demand inexplicably lifts since retailers are not holding stock.”
In summary, plumbing or wet area products as relate to kitchens and bathrooms, seem to be sharing characteristics with many other hardware categories, along with the same basic issues and concerns.
The search for retailing efficiency versus an unpredictable market, a rise in the perception of renovation as an affordable step for homeowners, the difficulties around upselling replacement purchases, the sheer unpredictability of the market…
Business as usual in other words.
STYLE AND SUBSTANCE FROM EUROPE
EuroCucina – the International Kitchen Furniture Exhibition – runs concurrently with the International Bathroom Exhibition and alongside the Salone del Mobile every other year at the Milan Fairgrounds.
It’s become an institution over the years and brings together top Italian and foreign manufacturers. This year’s edition, the 53rd, notched up a total of 357,212 visitors – up 13% on 2013.
EuroCucina and the International Bathroom Exhibition not only showed off an infinite range of ideas and solutions for a domestic space that is not just functional, but is becoming more and more of a place for socialising. With more than 130 exhibitors occupying over 23,000m2, it’s Europe’s only major trade show in the field.
As the images show, there was a vast array of stylish and interesting products, with the lamp shower head a standout. Slim rim sinks also seemed to be a popular product with many on display.
Of particular interest to this writer was Kaldewei’s Sound Wave bathtub which can act as a loudspeaker using Bluetooth technology (http://bit.ly/1kSdQNe). (And see the photo with our sidebar “Fixtures outpacing fittings in the US market”.)
All images have been taken from the official website and to see more images follow this link: https://www.flickr.com/photos/isaloni
FIXTURES OUTPACING FITTINGS IN THE US MARKET
According to a study conducted by Freedonia Group, US demand for plumbing fixtures and fittings is projected to advance 6.3% per year through 2017 to $12 billion, boosted by a rebound off a low base of home building.
To quantify this rebound, note that US new housing construction declined significantly from 2006 through 2009 and non-residential building activity fell at double-digit rates for three years beginning in 2009, severely constraining demand for plumbing products. After adjusting for price increases, expected gains through 2017 will still leave demand below the 2007 level.
More not less for fixtures – Demand for plumbing fixtures – showers, baths, sinks – is forecast to advance at a rapid annual pace through 2017. Gains in fixture demand will be driven by increased construction and improvement expenditures as well as increasing consumer interest in design trends. Design trends in plumbing fixtures and fittings can be boiled down to one mantra: “More, not less.”
Investing in the hubs of the home – In the residential market, current trends cast the kitchen and bathrooms as the most important rooms of the house. The kitchen is the “hub” of activity; the bathroom a “sanctuary.” As these rooms grow in size and importance, these trends will propel architects, builders, and homeowners to add value to their homes by installing higher-end, and simply more, fixtures to these spaces, including spa-like showers, large-capacity baths, multiple sinks with specific end uses and aesthetically appealing finishes, and luxurious toilets.
Fittings prices to fall? – Demand for plumbing fittings will grow less rapidly than that for plumbing fixtures through 2017. Growth will be driven largely by consumers trading out older fittings for more efficient ones and aesthetics. Certain fittings categories, such as single-lever faucets, will display above average growth as demographic shifts promote demand for universal design and Americans with Disabilities Act-compliant products, which are easier for older Americans or those with mobility issues to use. Price growth for fittings will be slower than for fixtures, as fittings face more competition from low-cost imports.
IF YOU GOT IT, FLAUNT IT? MERCHANDISING IN THE USA
An article recently published in the North American Retail Hardware Association’s Hardware Retailing magazine looked at “Four trends you can use to boost sales in the plumbing category” (it’s available online at http://bit.ly/1lnInT5).
The article says that economic changes have seen US consumers looking to save money by completing plumbing projects on their own. Therefore retailers should be looking into consumer education. Water conservation is a growing trend in the American market according to the article which looks at tips and examples to help consumers with these issues.
The magazine also has some interesting merchandising ideas for wet area products (again, available online at http://www.hardwareretailing.com/plumbingdisplays/). The examples used vary from the practical – vertical toilet displays to save space – to the creative (a “plunger tree”). The links on the article will send you to Hardware Retailing magazine’s Facebook page and, while you’re there, do make sure to “like” the NZ Hardware Journal!