| What's Hot and What's Not in Outdoor Living
By Pamela N. Danziger
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| Karen Adler |
When First Lady Michelle Obama stepped onto the White House lawn to plant a vegetable garden (as Abigail Adams, Eleanor Roosevelt, and others had done before her), she might not have been breaking new ground for first ladies, but she was joining thousands of people across the country in taking a renewed interest in their outdoor spaces.
As the recession continues, US residents are increasingly taking control of their personal environments, and this includes an increased interest in outdoor living. There are several factors contributing to an increased interest in garden/outdoor products.
The recession has increased interest in tangible investments. If there is one hallmark of the current economic recession, it is a loss of faith in traditional financial investments. The stock market has ridden a roller coaster, and it has taken with it many investors’ 401(k) and pension balances, discretionary-spending funds, and even money for daily living. Combine this with massive job losses, company and store closings, and reductions in salaries and benefits, and one can understand why people have become wary of trusting the dollar.
This has made consumers more interested in investing in items with tangible value. For some, this calls for purchases of jewelry made of precious metals and gemstones that have their own inherent value, beyond the ornamental. For others, it calls for investments in the patio or outdoor-living space, which add immeasurably to the family’s quality of life as they provides respite from day-to-day stress; an hour spent in the peace and quiet of the outdoors is a minivacation. Sprucing up the outdoor-living areas of a home pays off in enhanced home value as well.
In addition, threats make it more pleasant to stay at home. As if the recession had not make the situation challenging enough for luxury marketers, the recent H1N1 flu outbreak has made consumers even more wary of leaving their homes for extended periods of time.
Affluent consumers are cutting back on dining out and are spending less on travel, so there is every reason for them to take the discretionary income available to them and make their outdoor spaces into retreats, sanctuaries, and staycation spots using furniture, lighting, and decorative planters.
Renewed interests in local eating and green living also add up to increased gardening. There has been an increased interest in green living, including a focus on becoming more of a locavore (a person who eats food entirely or mostly grown/produced close to home). Nothing could be more local than backyard gardens, in which consumers can control the amounts of pesticides and herbicides used on their food. The food-transportation cost is only that of carrying the produce into the house, and this certainly has a much smaller ecological impact than choosing foods transported across the country.
All of these factors contribute to an increase in interest in garden/outdoor products. Not all products (and not all retailers) in this space are created equal, however, as a look at affluent consumers’ behavior demonstrates.
Marketplace Changes
The percentage of affluent consumers making purchases of outdoor-living luxury products has been tracking at about the same rate since 2007: Some 14% bought any outdoor-living luxury item in 2007, as compared with 12% in 2008 and 13% through the third quarter of 2009.
While purchase incidence has held steady, however, those who make purchases are spending more in 2009, and they are targeting certain types of items and retailers. The luxury garden/outdoor market is experiencing dramatic changes, and a look at consumer behavior helps map the new landscape that marketers will have to navigate.
Spending on outdoor-living luxury goods has risen dramatically in 2009. Affluent consumers spent, on average, $6,895 on these items in the first three quarters of 2007. This figure rose to $9,981 for the first three quarters of 2009, for a 36% increase in two years.
At the same time, experiential luxuries, notably travel and dining, underwent declines in both purchase incidence and spending over the same period. Affluent consumers are clearly more willing, in the current recession, to spend on making their home environments pleasant than on experiencing the larger world.
Affluent consumers primarily want outdoor items that enhance the value of their outdoor spaces. The change in how much the typical outdoor-living customer spent on outdoor-living spaces from the first three quarters of last year, compared with the same period this year, gives some important information about consumers’ purchase preferences in the garden/outdoor market. Consumers are primarily looking for outdoor items that enhance their enjoyment of outdoor-living spaces, as well as add value to their home investments.
Spending on garden shelters (including arbors, gazebos, and sheds); water gardens, fountains, and other water features; garden statuary; and power gardening equipment either doubled or nearly doubled from last year to this year. Also posting strong growth in their share of the outdoor consumer’s spending were chimeneas, outdoor fireplaces, and lighting accents.
Posting far slower growth in share of expenditures were barbecue grills, luxury outdoor furniture, decorative pots and boxes, and porch/patio decorative accents (such as flags and banners). Regarding outdoor furniture, it is worth noting that this product category is consistently the one where affluent consumers spend the most, so while the year-over-year trend in spending is slower than it is in many other categories, outdoor furniture continues to capture the greatest share of luxury consumers’ spending.
Attracting New Consumers
Given the latest research findings, there are many things that a specialty retailer can do to increase business with the new luxury consumer. Here are three suggestions. First, capitalize on the renewed interest in home luxuries, particularly in light of the recession.
After several quarters of pessimism about the economy, affluent consumers’ attitudes are lightening, and they are releasing some of the pent-up demand that built up when they were restraining their spending. They are spending first on their homes, as they are still reluctant to commit to paying for luxury experiences, as well as for personal luxuries such as fashion and jewelry.
Garden/outdoor marketers can capitalize on this by emphasizing the enduring value of investments made in a home’s outdoor space. The message to affluent consumers is that an investment in garden/outdoor luxuries can pay dividends in several ways, including increasing a home’s curb appeal for an eventual sale, allowing the consumer to save money by producing food, or just serving as an oasis to escape the stress of daily life, especially when vacations might not be in the picture.
Second, feature items that make the outdoors a room to be enjoyed. Affluent consumers express increasing interest in water features, outdoor structures, lighting accents, and gardening equipment, as well as expressing a continued passion for luxury patio furniture. These are all items that make it easier to make their environments attractive, comfortable, and easy to maintain. Providing a wide range of these items at a variety of price points will appeal to the largest number of consumers.
Third, don’t forget the Internet and other direct-to-consumer channels. Home-improvement stores and specialty home-furnishings stores remain the top two destinations for affluent consumers looking for garden/outdoor items; however, the interesting development in this market is the surge in popularity of the Internet and nonstore sources.
This not only bodes well for online-only retailers, but points to the need for traditional brick-and-mortar retailers to be sure that their Internet presences are keeping pace. Physical stores and e-commerce sites should operate in partnership with one another, specifically by promoting the online site in your store and by encouraging your online visitors to explore your physical location.
Pamela N. Danziger specializes in consumer insights, especially for marketers and retailers selling luxury goods and experiences. She is president of Unity Marketing (Stevens, Pennsylvania), a marketing consulting company that she founded in 1992. Her latest book is “Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience” (Kaplan Publishing, 2006). Her other books include “Let Them Eat Cake: Marketing Luxury to the Masses—as Well as the Classes” (Dearborn Trade Publishing, 2005) and “Why People Buy Things They Don’t Need: Understanding and Predicting Consumer Behavior” (Dearborn Trade Publishing, 2004).
PHPR November/December 2009
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