Retail Observer

RETAILOBSERVER.COM JUNE 2018 48 U nless you've been living under a rock the last couple of years, you realize that the Outdoor Living category is HOT! Consumers across the U.S. — regardless of climate — are extending their indoor living spaces to include their little oasis to relax, eat, entertain guests and enjoy the great outdoors. Why is that? It's not complicated. Our robust economy has provided an opportunity to spend disposable income on things they love best. What's not to love about a space where you can get away from all the fake news and the stresses of everyday life. As cited by a recent study conducted on behalf of International Casual Furnishings Association and American Home Furnishings Alliance by Wakefield Research, "70% enjoy spending time in their outdoor space more than indoors". 79% of respondents reported the primary driver for this is relaxing. "Whether enclosed or open-air, outdoor spaces have come into their own as legitimate rooms in the American home," said Jackie Hirschhaut, vice president of the American Home Furnishings Alliance and executive director of its outdoor division, the International Casual Furnishings Association. Sales of Outdoor Living is a $10B industry made up of a few key categories we like to refer to as "Heat, Seat & Eat". Outdoor furniture, cooking equipment, appliances, lighting, fire pits and audio/video all play key roles in the space. Product is sold at the home improvement stores, mass merchants like Sears, hardware, specialty retailers and yes, on-line. New entrants, i.e. Ashley Furniture started their initiative last summer by adding outdoor furniture; Rooms To Go is showing interest in outdoor with their recent merger/acquisition of Carl's Patio Inc. in south Florida. Studies show at that 40 to 50% of the Outdoor Living category is sold by specialty Retailers and Sears. I mention Sears here……well you know why. Consumers are usually purchasing these products at multiple outlets because it's difficult to find any Retailer that does it all. I'm not proposing you HAVE to sell all categories, but at least sell enough within a category to be relevant in the Consumer's mind. WHICH CATEGORY ARE YOU SELLING? • Appliances — My hunch is EVERY one of you is participating in at least one. Nearly all Appliance dealers are selling outdoor appliances. Some of them have ventured into the Cooking category. Even fewer of them devote enough floor space, product assortment and commitment to the category to look RELEVANT. In grills, the average specialty Retailer carries 4 brands. This is critical, especially when you factor in the importance of covering all fuel sources: gas, charcoal, kamado w/ lump charcoal, wood pellet, pizza ovens and infrared. Appliance dealers devote 5 to 7% of their overall floor space to grills. This can be expanded to include the front entrance where grills can be displayed during the day and rolled in at night. Gross Margins in this space should be VERY attractive vs. some of your current offerings. Look to make 35% plus IF you're selling the right mix AND selling accessories/spices/ rubs. They should account for 15 to 20% of your overall grill sales. • Furniture — HUGE opportunity for furniture retailers to capitalize upon. Not nearly enough are offering outdoor furniture solutions. Not enough have expanded to include heating/cooling comfort products, especially fire pits, the hottest sub-category in outdoor….. no pun intended. • Home Entertainment — Why shouldn't audio/video solutions for the inside of the home not include outdoor solutions? Why can't there be "man cave" solutions outside? Our Member in the Atlanta area, Ozone Recreation, Kennesaw, GA gets it. Expansion into grills, coolers, fire pits and hot tubs are just a few of the examples. Regardless if you're an appliance, furniture or home entertainment Retailer, you hold one of the pieces to the Outdoor Living puzzle. Those dealers that make the commitment to seek relevancy within their space AND those that start putting other pieces of the puzzle together will be richly rewarded with the "warmth" of the great outdoors. John Laing Appliance Trends John D. Laing, Director Nationwide Marketing Group RO BABY IT'S COLD HOT OUTSIDE 10 years 2018 Home Trend Report: Outdoors is the New Indoors Consumers are using their outdoor rooms for everything they can do indoors and are enjoying it even more. cell phone – 68% computer – 37% TV – 25% Magazines, newspapers – 42% Websites, blogs, social media – 40% Television or film – 31% Retailers – 30% Friends – 29% Family – 28% An online survey to 1,000 nationally representative U.S. adults, ages 18+ between February 14 and 21, 2018 – conducted on behalf of International Casual Furnishings Association and American Home Furnishings Alliance by Wakefield Research. Relaxing – 79% Eating – 35% Entertaining – 35% Exercising – 10% Working – 7% How we use tech out-of-doors: How we spend time in our backyards: Top purchases for 2018: Our top outdoor furnishings inspiration sources: enjoy spending time in their outdoor space more than indoors. would spend even more time outdoors if their space was more COMFORTABLE. 40 70 % % 56 % Number of U.S. households planning to purchase furnishings for their outdoor space this year. dining sets lounge chairs lighting fire pits www.icfanet.org

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