Vacuum cleaner increased competition and improvements in product technology
Technological innovation and increased competition have made the electric floor care market strong in spite of tough economic times.
The attached-tool upright, the latest major technological innovation in the industry, is becoming the most dominant product on the market and is starting to drive full-sized unit sales beyond previous record levels. Full-sized units refer to upright, canister and stick vac units but do not include wet/dry shop vacuums, handheld units or deep cleaning carpet machines–each a dynamic market in its own right.
For the last several years, the full-sized market has been on a plateau. In 1988, sales amounted to 10.6 million units. In 1989, the market hit a peak of 11.37 million units but slid back to 11.1 million units in 1990. Last year, the industry sold 11.0 million units.
This year, the full-sized market is expected to break a new unit sales record–with sales in excess of 11.4 million units.
Deep cleaning carpet machines is a market showing slow, but steady growth. More than 1.6 million units were sold in 1991, and the market is expected to grow to 1.8 million units in 1992.
Growth here is attributed to increased advertising on the part of Regina, television infomercials and increased ad expenditures from Bissell and the emergence of new players such as Blue Lustre.
The handheld market is steady–estimated to be between 8 million and 10 million units annually. Approximately 65 percent of all sales come during the fourth quarter–which gives a clear indication of strong gift purchases for the product.
In this market, there has been a shift away from non-corded to the corded models. Still, non-corded models make up 45 percent of the total market.
All told, the electric floor care industry will ring up more than $2.6 billion at the nation’s cash registers.
Full-sized vacuum cleaners (uprights, canisters and stick vacs) enjoy the greatest penetration into American homes of any small electrical appliance. Approximately 95 percent to 99 percent of the 94 million American households own at least one vacuum. Fifty-five percent own two or more vacuums, and 20 percent own three or more vacuums.
“The predominant consumer is female, aged 25 to 54,” said Dick Smith, Eureka’s advertising manager. “But there’s also another very important market out there. In this country, there are more 25 million households headed by a single male–this is an audience that is too large to be ignored.”
For deep cleaning machines, market penetration is not as great. Only 8 percent of all households own a deep cleaning machine–which leaves plenty of room for growth.
Here, the predominant consumer is female.
“But it’s usually a shared purchasing decision,” said Jim Krzemenski, vice president of sales for Bissell. “And more often than not a person who purchases a deep cleaning machine is also a homeowner. They want to protect their investment.”
While they acknowledge slow, but strong growth, floor care vendors and retailers describe the full-sized market as “flat but extremely competitive.”
“The market is growing, but it isn’t growing wildly,” said Gary Gosztonyi, director of marketing for Ryobi, makers of Singer vacuum cleaners. “Everybody is fighting for share and everybody is taking it out of each other’s hides.”
The attached-tool upright category is the largest, fastest-growing and quickest-turning full-sized product category. It will account for more than 75 percent of all upright vacuums sold in 1992. And uprights account for approximately 68 percent of the total full-sized market.
The attached-tool market is starting to expand the full-sized market beyond previous levels–but it is also eroding the traditional canister vacuum category. At the end of 1992, canisters only accounted for 19 percent of the total full-sized market–down from 25 percent of the market in 1990 and 27 percent of the market in 1989. Even traditionally strong canister floor care retailers, such as Sears, are starting to replace slower moving canister SKUs with new attached-tool units.
The primary reason attached tools are winning the war over canisters, say both retailers and vendors, is the attached-tool upright offers the carpet cleaning capability of an upright with the cleaning versatility afforded by a canister.
But some vendors say attached tool uprights are growing at the expense of canisters, because there is more advertising, promotion, excitement and trade press coverage behind the new units.
“It becomes something of a self-fulfilling prophecy,” said Dave Gault, Hoover’s vice president of marketing. “As retailers slot more space to attached tool uprights, they eliminate canister SKUs. The result is that attached tool uprights are receiving a great deal more exposure than other floor-care product categories.”
“The growth of the attached tool upright category will continue until the canister segment becomes a 2-million-unit-a-year market,” said Dave Jones, president and chief executive of Regina. “Canisters will level off at 2 million, and much of the future growth will be in uprights.”