Regular Price vs. Sale Purchases (Click to view larger)
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It's no surprise to see consumer purchase behavior shift during challenging economic times. Although small appliance sales
declined in 2008—almost across the board—there are differences among the key segments.
"Small appliance purchases on promotion, or at a discounted price, have grown significantly over the past few years," says
Peter Goldman, president of the home division at The NPD Group. The incidence of "on sale" purchases jumped the most in 2008
for overall small appliances, but the trend began before the recession. According to NPD's consumer tracking service, less
than half of small kitchen electrics purchases in 2005 included a discount of some kind, compared with about 57 percent in
2008. On the other hand, possibly due to the products' less expensive nature overall, consumers appear more likely to buy
personal care appliances for the regular price (63 percent).
Why Consumers Make Purchases (Click to view larger)
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Consumers generally plan their small appliance purchases, whether it is a hair dryer, iron, coffee maker or a vacuum. The
incidence of planned purchases of small kitchen electrics increased the most in 2008, almost 80 percent. However, there are
some categories where the ratio of planned purchases to those bought on impulse is much closer. Personal care appliances have
a slightly higher incidence of impulse purchases overall, at 24 percent in 2008, compared with small kitchen electrics or
home environment appliances where impulse purchases are closer to 20 percent of sales. Massaging appliances are the standout
here, with impulse purchases accounting for 42 percent of unit sales in 2008. There also appears to be a shift to necessity when buying for kitchen electrics and personal care. Unit sales of first-time
and replacement purchases are showing some growth this year. Home environment is slightly different, as it is shifting away
from replacement purchases and just showing increases with first-time buyers. NPD is seeing that, for those replacement purchases
growing among the kitchen electrics and personal care products, lower prices are being paid. Although products bought as an
upgrade are slightly less popular than in years past, they do bring in more dollars with prices paid at about 25 percent more
for total small appliances and 70 percent more on home environment appliances. "In general, consumers are becoming more careful and thoughtful in their spending and the ways they make purchases, whether
looking for the best price or approaching purchases as investments in items that are necessities they want to last," says
Goldman.
