‘As Seen on TV’ grows up to higher price points, upscale products
The “As Seen on TV” category has grown up. Once known for gimmicky gadgets and one-hit wonders, the burgeoning infomercial-driven product segment has given way to more purposeful items, higher sales tickets and ongoing line extensions.
Emphasis no longer revolves around 5,000 ways to peel carrots. Those products have been supplanted with such brands as Tristar’s Copper Chef, which has been steadily expanded to now include 40 cooking pieces across three product lines. A few items, such as Top Dog’s Urine Gone pet stain remover and Ontel’s Magic Tracks, even have some staying power — the latter is a kids’ race car set with a flexible track that is popular every fourth quarter.
“The business has changed and the sophistication of the industry continues to grow,” said Jane Gilmartin, vice president of product development and branding at Fairfield, N.J.-based Tristar Products. “Without a doubt, they’ve improved quality because of the sales volume you need. Products are less gimmicky — that’s how people used to think about them. It’s more about the problem/solution for the consumer.”
Ontel Products also has created line extensions. First marketed as a hand-held tool, its Vegetti vegetable spiralizer now comes in a countertop-crank version. In the spring, Ontel will add a power-model version. “The nature of products has changed,” said Craig Jordan, Ontel’s senior vice president of sales and customer solutions. “Five, 10 years ago, you sold out and went on to the next item. But the Vegetti has created a brand for itself.”
In addition to extending a brand’s life cycle, constant add-ons encourage destination purchasing in what has historically been an impulse-driven category. This has been the case with BulbHead.com’s Red Copper cookware line, Hurricane cleaning products and Atomic portable lighting line.
“The category continues to grow in terms of items launched, line extensions and shelf space,” said A.J. Khubani, founder/CEO of BulbHead.com, formerly TeleBrands. “Line extensions have become a focus for us.”
Higher price points
“As Seen on TV” products command some of the highest prices and margins in mass retail. Ontel’s automatic cordless tire inflator, for example, retails for $59.99, and margins for some products can hit 60%.
Jordan believes the more “serious nature” of products has paved the way for higher prices. “Traditionally, the category was $9.99, $12.99, maybe $19.99. People were willing to take a chance with a ‘tchotchke.’ Now, you have $29 to $59. Prices have really scaled up.”
BulbHead.com’s prices range from around $20 to $60, with $39.99 as the magic number. “Ten years ago, average MSRP was $10 to $20,” Khubani said. Consumers’ growing comfort with online shopping, he added, has helped drive higher tickets.
As “Seen on TV” merchandise also is receiving prominent placement in the drug channel. Rite Aid uses endcaps and power wings, while CVS Pharmacy features an “As Seen on TV” section near the front of the store. “It’s a visual category that has to be in front of the consumer,” Jordan said. “If it’s stuck in a corner, that’s a challenge.”
Products also are featured in circulars. But the biggest push comes from TV — even though roughly 90% of items are purchased at retail. “We’ve already educated the consumer,” Gilmartin said. “How many products can say that? Most items become top producers in whatever category they’re in.”
Khubani said BulbHead.com also is pumping more money into Spanish-language TV programming. This is significant. While many Hispanics are fluent in English, they often have trouble with the written language and may be hesitant to purchase a product whose label they do not understand.
Nobody is sure how big the “As Seen on TV” category is — an article in Inc. Magazine pegged the direct response television segment somewhere between $200 and $300 billion. Regardless, suppliers said they are offering — and selling — more products.
At the same time, retailers are managing the category more tightly. While suppliers now offer line extensions, it still is largely an item business where one product does not feed off the other in the way that those in a line of nationally branded hair care items or OTC do. “There’s usually one product, one solution versus programs where you have shampoo for kids, a version for adults, products for straight or fuzzy hair and many areas to address under one line,” said Steve Huron, vice president of operations at Trevose, Pa.-based Top Dog Direct.
With so many products on the market and so many doors, the last 3-to-4 years have seen retailers focus more heavily on productivity and turns. “They look at the planograms more to see what’s performing, and constantly refresh and update based on productivity,” Huron said. “They take markdowns to clear out inventory. Before, inventory kind of sat. Sometimes, shelves would clog up with junk.”
Some significant “As Seen on TV” categories and trends have emerged. Almost every company currently offers some type of copper-style cookware. Specialty pillows also are big, as are projection Christmas lights — and housewares merchandise always does well, Gilmartin said. BulbHead.com, which has been successful with My Pillow, is introducing the EggSitter Support Cushion for 2018.
Still, most items have a limited shelf life, prompting retailers to act quickly.
Jordan pegs the “As Seen on TV” lifecycle at 6-to-12 months in the drug channel. Limited space is part of the reason, with drug sections running 4-to-6 feet compared with 12 to 24 at mass. “The challenge is, we have a relatively finite window.”
“Products have extremely high sales velocity early on, but tend to have short life cycles,” Khubani said. “Drug chains need to have the latest products before they die.”
Still snacky: New candy, snack products build sales
You know all that stuff about healthy eating and how consumers want to cut down on sugar and snacks?
Well, if you are a retailer looking to make money from consumer trends, forget it. The candy and snacks categories are performing quite well at retail, thanks to a combination of product introductions, strong marketing and the basic desire of many shoppers to throw some tasty merchandise into their shopping carts.
According to IRI data, the candy category posted a solid 2.74% increase in dollar sales and 2.61% jump in unit sales in the 52-week period ended Dec. 3, compared with the previous year. Total candy sales at mass retail outlets exceeded $11 billion in sales. Salty snack sales jumped by 3.53% in dollars to more than $18 billion and 2.22% in units during the same period, while dried meat snack dollar volume grew by 6.18%.
Suppliers are taking much of the credit for this growth. Officials at companies, ranging from Mars and Hershey to Frito Lay and Kellogg, say that the emphasis on new items, and their willingness to back these releases with strong advertising support, are keeping consumers excited about the categories and what is coming up next.
“The shift in consumer shopping behavior offers a unique challenge and opportunity to drive growth and increase basket sizes in the marketplace, especially within the confections category, which consistently contributes to shoppers putting more items in their basket,” said Tiffany Menyhart, vice president of U.S. category leadership at Mars Wrigley Confectionery. “With 70% of impulse purchases being driven by visibility or an in-moment craving, it’s critical retailers make it easy for shoppers to find products that meet these needs in the moment. Retailers need to maximize confectionery conversion both in immediate and future consumption. Our Transaction Zone and path-to-purchase shopper insights fuel the ideas to help retailers create an engaging shopping experience by helping shoppers find what they are seeking quickly and place into their baskets.”
Retailers also are paying more attention. While some other categories are growing at faster rates, many merchants understand the importance of candy and snacks to the overall shopping experience. Snacks are getting much more space at many retailers, and candy products are being placed throughout the store, including even more placement at the front end, to spur impulse sales.
Hallmark serenades Valentine’s Day with Vinyl Record Cards
Hallmark is bringing the love for Valentine’s Day. The company announced plans to release Vinyl Record Cards, which will include seven-inch vinyl records featuring songs from Atlantic Records artists such as, Bruno Mars, Aretha Franklin and INXS.
“At Hallmark, we are merging music trends with greeting cards to take card giving and receiving to the next level,” Tom Brantman, creative director at Hallmark Greetings Innovation, said. “Sharing and enjoying music with others is an experience that spans all generations and brings people together in a way that other things can’t. Our vinyl record cards do just that: they offer more than a sentiment – they are a gift in themselves.”
Each card comes with a 45 RPM vinyl record featuring two songs from each artist, which is built into the sleeve of the card’s cover. The Kansas City, Mo.-based company also will launch vinyl record cards for birthdays later this year.
“We are thrilled to be partnering with Hallmark on the launch of such an innovative product,” Mark Pinkus, president of Rhino Entertainment, who also oversees the Atlantic Records catalog, said. “With the renewed popularity of vinyl, especially among younger generations, we see this as an amazing opportunity to showcase classic songs, along with current hits, to the card buying public.”
Hallmark’s Vinyl Record Cards are available for purchase anywhere Hallmark cards are sold, on the company’s website and Amazon.