Market Trends August 2018
Home Improvement Motivations
A recent survey by Wakefield showed that more than half of the respondents felt the urge to improve their home when they saw a neighbor’s project. According to the survey, which was sponsored by The Home Depot, gardening, yard work and painting were the top outdoor projects with painting, redecorating, house renovations and replacing flooring the top indoor projects. Millennials are particularly home-conscious and competitive, with 70% admitting to feeling pressured to keep up with the neighbors and nearly 50% responding to that pressure by taking on a project of their own. Parents feel the urge to improve more than non-parents. Millennials are also more likely than boomers to buy new furniture or refresh their décor.
Popular Home Trends
A recent Houzz report looked into five trends impacting building, remodeling and decorating this year. Among the highlights:
Open floor plans built around the kitchen continue to be very popular; people are willing to tear down walls and make major changes in order to have the ability for everyone to talk and interact in the entertaining space.
Styles that are super popular this year include Modern Farmhouse, with accents like lap siding, shaker cabinets and apron front sinks. The National Kitchen and Bath Associations reports that contemporary style has passed traditional in popularity for the first time.
Lighting choices are becoming more sophisticated and people are looking for both function and fashion, along with smart technology that allows lights to be turned on and off with voice commands or from an app. Bathroom and vanity lighting that is more flattering is becoming more important.
Quartz is gaining popularity for countertops and is being used more than granite. Some new choices contain antimicrobial properties.
Most homeowners are opting for no tub and instead enlarging their shower areas. If a tub is wanted, free standing tubs are popular. Curbless and zero threshold showers are both sleek and allow for universal access if it is needed sometime in the future. They are easier to clean as well.
Target Techstars Chosen
A new batch of 10 companies will receive capital and mentorships from industry experts now that they’ve been chosen for the Target + Techstars global accelerator program. Many of the ten startups are targeting retail applications, including Clicktivated, which connects viewers to products and information inside videos by a click or touch, ProcessBolt, which makes technology for conducting vendor risk assessments, Satisfi Labs, which creates artificial intelligence solutions for brands looking to communicate the right information at the right place in real time and Type W., which is automating the collection of sell-through data for vendors.
Apple to Launch Online Subscription
Apple is reportedly launching an Amazon Prime-like subscription model that will let users access music, news and TV and will give users access to dozens of premium magazines as well as a Netflix-like streaming platform that will reportedly launch in March 2019. RBC Capital Markets noted that the subscription model that bundles services would make good business sense for Apple. The digital news subscription will apparently be the first component launched. Analysts estimate that Apple will spend about $1 billion this year producing content that will be launched next year. Analysts say the online subscription model is becoming more widespread as it insulates customers and ensures loyalty as well as provides massive amounts of customer profile information that can be used for targeting.
AmazonBasics Grabs Market Share
Amazon now has about 100 private-label brands, of which more than five dozen have been introduced in the past year. In 2009 Amazon entered the private-label business by offering a handful of decidedly unglamorous products like batteries under a brand dubbed AmazonBasics. In just a few years, Amazon had grabbed nearly a third of the online market for batteries, outselling Energizer and Duracell. Now instead of using the AmazonBasics brand, their private-label products are sold under a variety of brand names, including Rivet for home furnishings. Amazon said they took the same approach to launching private-label brands that they take to everything: start with the customer and work backwards. As consumers increasingly use voice technology and digital assistant Alexa to shop, the playing field becomes even more tilted, as the only options given in the categories in which Amazon participates are Amazon brands. Amazon also noted that about 70% of the word searches done on Amazon’s search browser are generic, which allows Amazon to make sure their private-label brands appear prominently in results.
Walmart Takes on Amazon and Netflix
Walmart is reportedly thinking about getting into the streaming video business with a new platform and intends to edge out Netflix and Amazon Prime Video with cheaper subscriptions that would start at less than $8 per month. However, Walmart has owned video streaming service Vudu for the past eight years and has been unable to capitalize on it while Netflix and Amazon are expanding worldwide and spending billions of dollars to produce original content. Meanwhile Facebook and Apple are reportedly considering entering the same market. Nearly one million new households subscribe to streaming video services each month, and the US market is expected to grow to $84 billion by 2022.
Walmart and Microsoft Team Up
Walmart and Microsoft deepened their tech partnership as Walmart inked a five-year deal to use Microsoft’s cloud technology to power functions that could include algorithms for purchasing and sales-data sharing with vendors. Walmart plans to deploy Microsoft’s machine-learning, artificial intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of equipment. The Microsoft deal is the latest example of Walmart collaborating with Amazon’s tech rivals. Industry insiders say that the Walmart-Microsoft partnership was fueled by the two companies desire to best a common enemy: Amazon.
Prime Day Not Just for Amazon
Amazon wasn't the only retailer racking up big sales on Amazon Prime Day in mid-July. According to data reported by Chain Store Age, large retailers (with more than $1 billion in annual revenue) reported a 54% increase in sales compared to an average Tuesday, according to data from Adobe Digital Insights. Increased conversions were the main drivers of retailers’ increased revenue for Prime Day this year. Analysts say that savvy retailers took advantage of all the hype around Prime Day and offered plenty of deals, and shoppers who were looking for bargains took advantage of them. The combination created a mini holiday shopping season.
Voice Assistants Impact Shopping
According to a recent survey by Avionos, 77% of respondents said that voice assistants have a positive impact on their perception of ecommerce. The survey analyzed online shopping habits, preferences and expectations. When consumers are browsing with no specific intent to buy, 33% of respondents said they began their search on Amazon and 32% began on Google. When people are actually planning to buy something, 38% begin on Amazon and 22% begin on Google. About 15% of consumers with purchase intent and 17% of browsers began their search on a brand’s website. Artificial intelligence got high marks, with 43% of consumers thinking it will make checkouts faster, 27% thinking it will bring faster consumer service responses and 26% believing it will provide a more personalized.
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