Soap Wars Part I: In a Lather!

We’ve been saying that the core is no more for a couple of years now - retailers’ highest value is category agnosticism not category expertise.  And it hasn’t been hard to find a steady stream of fresh examples of retailers going all-in with stretch categories.  What’s endlessly fascinating to me though, are the categories that are warranting the "stretch". . . and who’s doing the stretching!

My recent store sweeps confirmed my suspicion that household cleaning products are fast upstaging food as the latest commodity category that has retailers in a lather.

I started watching Lowe’s entry into the household care arena about a year ago when they first popped in an inconspicuous test section of spray cleaners and a few other items.  Nothing out of the ordinary here.  If paint smears on the glass or the baseboards, you need to clean it up, right?  Good for Lowe’s for grabbing the sale, especially since most Home Depot stores already have an aisle dedicated to household cleaning items.  However, over the course of the last year, Lowe’s has dramatically expanded the presence of national brand household cleaners and other household care items to include everything from detergent, to furniture polish, to air fresheners . . . In the store I visited, one full aisle and two end caps were dedicated to them.

After jotting notes on prices for the various items at Lowe’s, I just had to drive up the highway to Walmart to do a price comparison. What I found was that Walmart’s prices were about 10 to 15 percent lower on every single item. This means that, even though Lowe’s was nowhere near being a price leader, they felt empowered to expand the selection of these items in their stores regardless.

At a time when consumers continue to be portrayed as being extremely cost-sensitive and savvy, Lowe’s seems to be breaking the rules.  After all, we’re talking about easy comparisons: national brands that are widely distributed with no quantity-for-the-money games (all comparisons were ounce-for-ounce).

Is Lowe’s throwing pricing to the wind and capitalizing on impulse buyers who realize they are out of laundry detergent while they are shopping for a washer/dryer?  Or, perhaps a can of Pledge receives less price scrutiny when it’s one of a couple of national brand featured and high ticket items are in full view just down the aisle.

Even if consumers are aware of price, convenience may still be king. I don’t know that I would quibble over a 50-cent difference if it meant making an extra stop.

We’ve been talking a lot about how retailers aren’t always “in it to win it” and how “play to participate” is trumping “play to win."  I can’t say that laundry detergent is the first item that comes to mind as an example but perhaps, by placing less emphasis on price, Lowe’s and others  are finding out that simply being in a particular product category is sufficient for success, however incremental.

What I saw at Lowe’s turned out to be part of a bigger story.  I now see a battle raging in the household cleaning and care arena, one that is about to seriously heat up.

In my next post, I’ll dive deeper into these once-sleepy suds!

Comments

[Ben Smith]

Reminds me of how ToysRUS and BabiesRUS now have basically a P&G section with everything from detergents to cleaning supplies to paper towels and toilet paper. The pricing isn't the best, but it is good enough. They captured my attention on a search & destroy mission for pampers, but I was able to walk out with the sorely needed quicker picker upper also.