Time to Move Beyond the Basics in Bath
April 9, 2007-- Home Textiles Today,
For the bath category, 2006 was the year that the tried and true prevailed. To the extent that the category added a bit of volume, proven winners drove sales.
The bath décor category — comprised of bath towels, rugs, bath accessories, shower curtains, and tank sets — grew, albeit a modest 1%, to $3.737 billion in total sales, up from $3.700 billion in 2005.
But proof that tried-and-true, plain-Jane products work isn't the only confirmation last year offered.
The period gave yawning players a wake-up call that there should be more room for innovation, fashion — in other words, a little risk — to keep the business interesting.
In the towel category, for example, New York-based Loftex Industries evp Gretchen Dale observed a "lack of innovation" over the year.
"There are a million towels out there," she explained, "and many retailers don't give the consumer a reason to buy. It's all driven by price point. Only a few retailers are taking risks. Fashion is a risk, but if you don't have it on the floor, it's pretty boring. If the only difference between solid-colored bath towels is $4.99, $5.99, $6.99, $7.99, $8.99 and $9.99, who cares? It's boring."
The blame seems to straddle both sides — supplier and retailer. But the former argues it is only responding to retailers' requests for "proven winners," as put by Bob Weiss, director of sales and marketing, Central Islip, N.Y.-based Creative Bath Products.
"Industry-wide, no one wanted to try new things, they only wanted to work with what's already selling," he said. Creative Bath in 2006 was a top-five player in two categories — bath accessories with $55 million in sales, and shower curtains with $34 million in sales.
"Home furnishings were very flat and nobody was willing to take a risk because of the business being soft," he said.
Croscill Home Fashions' Carl Legreca, of the office of the president, said he and his team are "just trying to think outside the box a bit more" to get retailers to take a chance, "and not be so, so, so, so, so safe. They need to be safe, I understand, but they also need to take some risks to attract customers."
For New York-based Croscill, bath accessories sales were flat in 2006 at $45 million, positioning the company as the fourth largest category player. But Legreca said what perked up the company's total bath sales were its emerging categories — towels and rugs — as well as shower curtains, all of which saw "a lot" of growth over the year.
"We need to make the category exciting again," he said. "We need to get it up and running again for the consumer rather than just offer her the basic pieces."
The one bath category that seemed immune to innovation neglect was bath rugs, which saw its new construction and fiber offerings translate into added shelf space and considerably higher sales than sister bath categories.
Dennis Fein, vp, bath, Dalton, Ga.-based Shaw Living, has seen since the second half of 2006 some retailers expand their bath rug presentations from eight to 12 colors and make more investments in the retail floor space for this category, "with much stronger presentations."
He added that retailers are also tacking on "additional styles, from four to five, for example, to re-emphasize the classification."
Shaw Living enjoyed a 5% sales increase in 2006, to $57 million in bath rugs sales, positioning it as the fourth biggest player.
A notch above Shaw was domestic manufacturer Maples Industries, based in Scottsboro, Ala., with sales of $120 million — 9% more than it generated in 2005. That growth, the company said, stemmed in great part from product innovation. Arnold Stevens, vp, said bath rugs trended — and continue to trend — higher in terms of total sales than other bath categories because, "brightness, pattern, softness and texture are really driving the sales and business. New fibers have really made bath rugs perform well at retail."
Add to that increased demand from shoppers, due to larger bathrooms and more bathrooms in homes today.
On the flip side of rugs were towels, which in the merchandise-mix pie lost a 2% slice, dropping to 50% of total sales. Picking up those points were bath rugs and shower curtains, 1% each.
Just as Dale of Loftex noted, Vivie von Walstrom, director of design and marketing for Foot Hill Ranch, Calif.-based Venus Home, has seen retailers shy from fiber innovations to keep price points down.
"In an effort to promote sales, buyers over the last few years have bombarded the consumer with nothing but solid towels at ever decreasing prices," von Walstrom said. "I'm now seeing a resurgence of sculpted styles as an alternative. In terms of innovations, the industry has tried introducing bamboo and various other fibers, but they have not been widely accepted."
To drive differentiation in the towel category, New York-based Welspun's director of marketing Bob Hamilton said vendors need to work more closely with retailers to create new methods of communicating product qualities and benefits to shoppers.
"This is an industry that spends nothing on communicating innovation to the consumer," he explained. "And the problem with towels and rugs is that unlike, say, a Cuisinart, they aren't sold in boxes that provide consumers with a lot of information about the product. So unless the store puts a headline ad in the newspaper and runs a series of radio ads or puts in a strong display, the consumer won't know the difference. That's why we've begun working closely with retailers to help promote and develop point-of-sale merchandise to effectively communicate messages to consumers. It is true there are not a lot of things being done, but that is changing."
Aside from belly bands, cuffs, and shelf signage, Welspun recently created a short video that is aired near its towel display at certain retail stores. The results have been "dramatic," Hamilton said.
"We've seen sales increasing already at least 50%," he said, for the company's new Hygro cotton technology towel under the Nautica brand. It retails for $11.99, compared with most of Welspun's target products, which go for $9.99.
The Welspun marketing efforts — coupled with its product innovation — give insight to consumers' willingness to pay higher price points, so long as the product is worth it and the consumer understands that.
Salo Grosfeld, president of Miami-based J.R. United, the fifth largest bath towels supplier with $87 million in sales last year, said category growth is in the $7.99 to $9.99 price range for better quality product.
"We're seeing higher price points do better," Grosfeld said. "These are the better yarn towels — zero twist, micro-cotton, the better yarn composition towel. People are tired of the old, flat-looking towel."
And the retailers selling these goods are the mid-price chains — Kohl's, JCPenney and others — which helps explain the market share boost for this channel in 2006.
Mid-price chains grew the most by a landslide — 11.9% — to $662.7 million. By comparison, department stores — which underwent consolidation last year with Macy's absorbing May Co. and shifting its home focus to a more mid- to high-end brand focus — eked out only a 0.7% gain.
The only negative growth occurred at variety/closeout stores, direct-to-consumer and other, which lost 14% of its market share, dropping its total to $159.2 million from $185 million in 2005.
Distribution Channels ($millions)
2006 total retail sales: $3.737 billion up 1% from 2005
|*Variety/closeout, direct to consumer and other channels such as PXs, grocery stores and other alternative channels.
|Discount department stores||$1,868.5||$1,850.0||1.0%|
|Home textiles specialty chains||673.0||666.0||1.1|
|Home improvement centers||37.4||37.0||1.0|
|Single-unithome specialty stores||37.1||37.0||0.3|
|Source: HTT Research
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