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Wednesday, October 20, 2010

ITP Furnishings/Accessories/Toys Marketplace Transformed by Recession

Packaged Facts observes that the consumer ITP durables marketplace has morphed under the pressure of the difficult U.S. (and world) economies, since at least 2007.  Although retail dollar growth was still positive in that year across all three of our ITP categories studied here – furnishings, essentially homebound; accessories, more portable; and toys of an astonishing range of types – changes were already in effect:  Pre-recession, many marketers were entering new brands, or extending their established brands, into the lower reaches of the luxury price-tiers, and more obviously, into middle luxury – “mid-luxe” tiers. 

In the stroller segment of the accessories category, for example, marketers such as Newell Rubbermaid, having bought the sophisticated Japanese-made Aprica brand earlier in 2008, thus covered the under $200-$370 range more deeply, because the new acquisition complemented Newell’s popular Graco brand, priced up to $270.  Also pre-recession, Phil&teds and UPPAbaby were both rolling out namesake brands with high-tech or elegant design features, at MSRPs topping out at the upper reaches of the mid-luxe tier, or at $600-$700. 

Initially, these marketers may have viewed their price-positionings as shrewd competitive moves versus the $1,000-plus Bugaboos, Maclarens, Stokkes, and other strollers.  Bugaboo, not content to be the mid-luxe specialists’ punching bag, introduced the Bugaboo Bee in 2007, listing it at $535.

There was also some accommodation of the value set, with extensions downward into the under-$200, and even under-$100, brackets; the low-end models were often lightweight umbrella strollers, but in any case, tended to show the design influences of higher-priced counterparts. 

As the cost of fossil fuels skyrocketed, and consequently, the pricetags on groceries and manufactured goods also shot up; as the U.S. mortgage scandal unfolded; as unemployment rates rose; as the war in Iraq cost untold billions – some ITP durables marketers may have concocted their multi-price-tiered battle plans to double as hedges against a recession that did happen, after the fourth quarter 2008 crashes of financial exchanges around the globe. 

In 2010, there is plenty of anecdotal evidence that high-end ITP durables -- for instance, the Teutonia brand of German-made strollers acquired by Newell Rubbermaid in 2007, and now priced up to $890 -- are selling well again.  But the newly reinforced mid-luxe and value tiers will be with us for a long time to come, offering wider arrays of brands, and certainly, more choices of affordable status brands.

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