Stick vacuum log dramatic growth, hand vacuum reverse decline

Buyers traveling the road to profitability this fall will be hitching their wagons to stick vacuum cleaners, one of the floor care industry’s most rapidly growing segments.

Sales for the first half of 1997 grew between 15 and 20 percent over those of the same period of 1996, according to retailers and manufacturers, who point to expanded offerings at both the high and low ends as key category drivers.

“Our stick business has exploded the last couple of years,” said John Hoppe, vice president of marketing at Eureka. “And we’re doing a heck of a business this fall. This used to be strictly a seasonal category, and still does well pre-Christmas, but it has become a very good year-round business.”

Sales of hand vacs, meanwhile, which have declined consistently since 1992, have shown signs of rebounding since the last quarter of 1996, and key suppliers indicate the category should be up by high single digits when sales are tallied at year’s end.

“The hand vac market probably bottomed out about this time last year,” said Jim Holcomb, vice president of marketing at Royal Appliance, which along with Black & Decker does the lion’s share of the hand vac business. “Our business is up by small double digits this year, and the pleasant trend that we’ve found is that consumers seem to be mixing upward, even if only marginally.”

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At present, the bulk of hand vac business is done between $24.99 and $44.99; that segment accounts for roughly 62 percent of dollar and unit sales, according to IMR research. As would be expected, the below-$25 segment represented a much higher percentage of unit sales than of dollar sales, 24.8 percent compared with 14.2 percent.

The improvement that manufacturers point to at the better end of the hand vac business comes from the addition of several higher-priced units introduced in the last year. These include models from both Royal and Black & Decker that have attachments, a first in the category, and Hoover’s Twist & Vac. With promotional prices between $34.99 and $44.99, the new offerings represent a $5 to $10 jump over the category’s previous high end.

“The entire market had come down, but in the past year, our business has started to rebound, in part due to interest in wet/dry hand vacs,” said Sharon Day, marketing manager for Black & Decker’s Buster business, which includes the Dust Buster, Floor Buster and Scum Buster convenience cleaners.

From a high of 7.2 million units in 1992, sales of hand vacs have slipped below the 5 million mark in the past 5 years. This year, according to industry experts, category sales should top 5 million units, and corded represent approximately 60 percent of sales.

That represents a dramatic shift since 1985, when corded units were introduced to the market. At that time and for the next several years, cordless units were in the overwhelming majority. However, consumers liked the added power that corded units were able to provide, as well as the brush roll that gave them performance more in line with popular uprights, and a 60-40 split between corded and cordless has been the norm for the last three to five years.

That split varies somewhat by channel of distribution, however; discounters’ breakdown is closer to 50-50.

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Sales of stick vacs, while growing rapidly, are not expected to top the 4 million unit mark this year, despite the segment’s rapid growth. Like hand vacs, the category is split roughly 60-40 between corded and cordless units. Unlike in hand vacs, however, there has been significant growth and product introductions at both ends of the price and feature spectrum in stick vacs.

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In fact, some point to the expansion of the category, particularly at the low end, as a key factor driving unit growth.

“Because you’re getting people’s attention with $19.99 and $29.99 units with a revolving brush head, more people are coming in and looking at the category,” said Eureka’s Hoppe. “Also, once you get into that $20 range, the item becomes giftable.”

“You get to a price point and the consumer changes the reason for purchase to a degree from personal use and functionality to more of it being a nice item to buy as a gift,” echoed David Gault, vice president of marketing at Hoover.

However, he added, “You get to a certain price point, whether it’s a low-end blender or an inexpensive stick vac, and the low, low price point doesn’t seem to make much difference.”

Most recent data from IMR indicates 19.2 percent of unit volume is done at price below $30. The bulk of the business, roughly 47 percent in unit terms and 51 percent in dollars, is done between $40 and $55.

Those prices were strengthened in the last year as Hoover introduced a new line of stick vacs with features such as clear dirt cups, revolving brushes and on-board tools; it’s the first and still only stick vac line in the industry that offers tools attached.

“I would say, without a doubt, that the models with tools attached are the best-selling for us,” said Gault, “although that stands to reason, since there are more of them. But clearly, the step-up from the units without on-board tools is a noticeable value to the consumer.”

Both sticks and hand vacs are gaining from a steadily growing demand for convenience by consumers, industry experts report. In a society where more and more people are willing to trade time for money, a vac that can be taken out easily, used for quick cleanups and stored is a popular item.

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