Baby Durables - US - March 2009

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
EXECUTIVE SUMMARY
Market produces modest gains despite economy
Competition grows as economy worsens
Market drivers predominately offer negative outlook for market
Baby furniture leads sales and growth among segments
Mass merchandisers account for 53% of baby durable sales
Baby durable manufacturer profiles
Innovation driven by value, technology and lifestyle position
Incidence of ownership and how baby durable products are acquired
Influences of purchase
Purchasing habits related to safety issues
INSIGHTS AND OPPORTUNITIES
Safety builds parental trust
Customization gives parents exactly what they need
Getting personal to maximize baby registries
A is for “Alpha Mom”
INSPIRE INSIGHTS
 RULES OF THUMB
What's it about?
What we've seen
Specifics
Implications
Specifics (part 2)
Implications (part 2)
MARKET SIZE AND FORECAST
Key points
Parents still spend money on their babies despite poor economy
Recession will impact the number of births and where consumers shop
Figure 1: Total U.S. retail sales and forecast of baby durables, at current prices, 2003-13
Figure 2: Total U.S. retail sales and forecast of baby durables, at inflation-adjusted prices, 2003-13
COMPETITIVE CONTEXT
The shadow market
Children’s resale
Thrift stores/Not for Profit
Internet resellers
Advantages for baby durables marketers
SEGMENT PERFORMANCE—OVERVIEW
Key points
Figure 3: Total U.S. retail sales of baby durables, by segments, 2006 and 2008
SEGMENT PERFORMANCE—BABY FURNITURE
Key points
Crib sales—a basic need
Quality furniture for baby and beyond
Figure 4: U.S. retail sales and forecast of baby furniture, at current prices, 2003-13
Figure 5: U.S. retail sales and forecast of baby furniture, at inflation-adjusted prices, 2003-13
SEGMENT PERFORMANCE—DAYTIME CARE PRODUCTS
Key points
The non-essential baby items
Blurring product lines
Figure 6: U.S. retail sales and forecast of daytime care products, at current prices, 2003-13
Figure 7: U.S. retail sales and forecast of daytime care products, at inflation-adjusted prices, 2003-13
SEGMENT PERFORMANCE—BABY MOBILITY
Key points
Innovative car seats give parents the option to own just one
Strollers cater to parents’ needs and lifestyle choices
Figure 8: Total U.S. retail sales and forecast of baby mobility products, 2003-13
Figure 9: Total U.S. retail sales and forecast of baby mobility products, at inflation-adjusted prices, 2003-13
SEGMENT PERFORMANCE—SAFETY/HEALTH AND WELLNESS
Key points
Tangible value
Going high-tech
Figure 10: Total U.S. retail sales and forecast of safety/health and wellness products, at current prices, 2003-13
Figure 11: Total U.S. retail sales and forecast of safety/health and wellness products, at inflation-adjusted prices, 2003-13
RETAIL CHANNELS
Key points
Mass merchandisers capture the nexus between price, selection and convenience
Wal-Mart: Gains through store growth
Target: Building sales through exclusive brands
Kmart: Struggling sales
Baby specialists—the industry authority
Babies R Us: The quintessential stop for expecting parents
One Step Ahead: Establishing parental trust while leveraging convenience
Lifestyle specialty stores and full-line furniture stores stimulating growth
Pottery Barn Kids: Target affluent consumers
Ikea: Offering value with style
Ashley Furniture Home Stores: Quality that can transition
Retail channel sales
Figure 12: Retail sales of top nine baby durables retailers, 2007 and 2008
Figure 13: Retail sales of top 20 baby durables retailers, by channel, 2006 and 2007
MARKET DRIVERS
Outlook for baby durables weakens as population of children under 3 is expected to slow
Figure 14: U.S. population estimates and projections of children aged 3 and under, 2003-13
It comes down to money
Recession, unemployment impact birth rates—now and future
Figure 15: Seasonally adjusted unemployment rate, 16 years and older, by month, 2000-09
Household income
Figure 16: Household income distribution, by race and Hispanic origin of householder, 2007
Race and ethnic origin—influencing factors on fertility rates and number of births
Figure 17: Fertility and number of births, by race of mother, 2004 and 2006
Figure 18: U.S. population estimates and projections of children aged 3 and under, by race and Hispanic origin, 2003-13
Age of mom and her employment
Older moms is a positive market driver
Figure 19: Fertility and number of births, by age of mother, 2004 and 2006
More women in labor force than ever before
Figure 20: Women’s labor force participation, 1975-2006
Grandparent caretakers represent secondary consumer
LEADING COMPANIES AND BRANDS
Dorel
Newell Rubbermaid: Graco
Evenflo
Mattel: Fisher-Price BabyGear
RC2: Learning Curve brands
Kolcraft
Stork Craft
INNOVATION AND INNOVATORS
Getting the most bang for your buck
Transitional products
Multifunctional products
Innovating with parents in mind
Ease of use
Solutions
Lifestyle statements
Innovators: The European influence and high-end baby gear
Customization
Functionality
High style
ADVERTISING AND PROMOTION
 OVERVIEW
Internet is primary resource for new parents
Informational websites: go-to resources for product information and community support
Online magazines: product evaluations and top picks help parents
Blogs and chat rooms continue to gain influence
Magazines are an important research tool—features and awards for top products
Figure 21: Select parenting publications, by type, 2009
Promotion focus: Sweepstakes, contests and events
USAGE—BABY FURNITURE
Key points
Moms acquire new cribs and mattresses; all other furniture pieces are negotiable
Figure 22: How mothers acquire baby room furniture, by product type, December 2008
Figure 23: Incidence of furniture gift giving among women, by product type, December 2008
USAGE—BABY MOBILITY
Key points
New car seats and strollers are essential baby gear—borrowing/second-hand won’t do
Figure 24: How mothers acquire baby mobility durables, by product type, December 2008
Figure 25: Incidence of baby mobility gift giving among women, by product type, December 2008
USAGE—DAYTIME CARE
Key points
Moms are open to “used” daytime care items; yet many are received as gifts
Figure 26: How mothers acquire daytime care durables, by product type, December 2008
Figure 27: Incidence of daytime care product giving among women, December 2008
Key points
Usage of safety/wellness products depends on parenting and lifestyle factors
Figure 28: How mothers acquire baby safety/health and wellness durables, by product type, December 2008
Figure 29: Incidence of baby safety/health and wellness durables giving among women, December 2008
PLACE OF PURCHASE
Key points
Almost nine in ten parents shop mass merchandisers for baby durables
Figure 30: Stores where baby products are acquired, December 2008
BRANDS PURCHASED
Key point
Fragmentation of brands is high; traditional brands have strong penetration
Figure 31: Brands of baby products acquired, December 2008
ATTITUDES
Key points
Family and friends influence purchase decisions
Figure 32: Research conducted and other statements about acquiring baby products, December 2008
Figure 33: What influences the purchase, December 2008
CHANGING PURCHASING HABITS DUE TO SAFETY ISSUES
Key points
Parents say safety isn’t more of an issue now—they’ve always been safety-conscious
Figure 34: Changing purchasing habits due to safety issues, December 2008
MOMS IN ONLINE COMMUNITIES
Key points
MySpace and Facebook membership popular among moms
Figure 35: What influences the purchase, by age of mother, December 2008
CLUSTER ANALYSIS
Overview
Researchers and Readers
Who they are
Opportunity
Mainstream Moms
Who they are
Opportunity
Bargain Buyers and Borrowers
Who they are
Opportunity
Cluster characteristics
Figure 36: Baby durable clusters, December 2008
Figure 37: Agree/disagree with purchase statements about baby products, by baby durable clusters, December 2008
Figure 38: Agree/disagree with safety statements about baby products, by baby durable clusters, December 2008
Figure 39: Average number of items bought new, by baby durable clusters, December 2008
Figure 40: Average number of items bought second-hand, by baby durable clusters, December 2008
Figure 41: Average number of items borrowed, by baby durable clusters, December 2008
Figure 42: Average number of items received as gifts, by baby durable clusters, December 2008
Cluster demographics
Figure 43: Baby durable clusters, by age, December 2008
Figure 44: Baby durable clusters, by presence of children younger than 5, December 2008
Figure 45: Baby durable clusters, by income, December 2008
Cluster methodology
APPENDIX: TRADE ASSOCIATIONS