Small Appliance Sales Up 5 Percent in 2012, Reports NPD Group

The small appliance industry had a prosperous 2012. According to The NPD Group Inc., a global information company, U.S. small appliance sales gained 5 percent in dollars in 2012, on top of a 4 percent increase in 2011.  

Noting that unit volume was down slightly, it was a favorable mix of higher-priced product that drove the growth in dollar sales. Clearly, the story is one of trading up, which was evident for the vast majority of small appliance categories. 

Small kitchen electrics saw the strongest growth in dollars, up 10 percent, in addition to the healthy 9 percent increase the prior year. Home environment grew 3 percent in dollars, similar to last year’s 4 percent increase. Dollar sales of personal care products increased more than 2 percent in 2012 and were driven by a nearly 3 percent increase in average selling price. 

“Given the still fluctuating state of the economy, the idea that consumers are spending more on their small appliance purchases seems counterintuitive,” said Debra Mednick, executive director and home industry analyst, The NPD Group. “But, we have learned that consumers will rationalize their spending when products deliver on convenience or performance, despite a premium price point. In fact, consumers may be more attracted to certain premium products and will forgo other purchases to have that ‘little bit of luxury,’” said Mednick. 

In 2012, the Internet and personal connections played an important role in facilitating the growth of the small appliance industry dollars, given their influence on trading up. Online dollar sales increased 24 percent, accounting for 14 percent of industry dollars, compared to 10 percent in 2010. 

Products purchased online garnered nearly 50 percent higher prices than those purchased in a traditional brick-and-mortar store. Sales of small appliance products researched through social media or blogs increased 33 percent, and items purchased as a result of friend or family recommendations saw the largest increase in average selling price. Older consumers purchase higher-priced products, spending more on their small appliances.

“While the millennials are the generation of the future, baby boomers and Gen X are still driving the market,” said Mednick. “Consumers aged 45 and up increased their average appliance spending by double digits. “The evidence of consumers trading up is undeniable, given the prevalence across our industry,” said Mednick. “In spite of, or perhaps because of, economic and personal challenges, consumers are focusing on indulging a bit, and finding value in premium.”