Infant, Toddler, Preschool (ITP) Durable Furnishings & Accessories in the U.S
Babies and little kids are cute and cuddly but marketing infant, toddler, preschool (ITP) products is one tough business. Market potential is capped by the birth rate, which has been stagnant at best. Safety is a potential nightmare, with regulations and recalls the cost of doing business. And people are increasingly buying used instead of new products. But. Some players thrive and new ones enter every year with a better idea. And signs of optimism are out there. Birth rates have recovered a bit. Economic indicators keep improving. Confidence is high. Millennials are spending more to get what they want, and some industry watchers believe they may soon start a baby boomlet.
U.S. retail sales of the ITP Durable Furnishings & Accessories were $7 billion in 2015. The market is mature with sales growing by a CAGR of 1.5% since 2011. Sluggish sales are partially the result of stagnant and declining number of births. At about 4 million a year the number of births in the U.S. vary little year-to-year, thus limiting overall market potential. Also impacting sales of new products is the fact that sales of used products have been growing with estimates they could be at least 25% of overall ITP product purchases. Consumers are increasingly purchasing ITP products from second-hand stores or consignment shops, sites like Craigslist and Ebay or from other consumers. People are also being given some products as hand-me-downs for free or borrowing items, thus taking consumers out of the market for purchase of some new products. Manufacturers should do everything possible to urge people to buy new products, both for safety reasons and to preserve their sales.
ITP new product sales have rebounded in the last couple of years due partially to an uptick in births and the continued popularity of higher-priced products like convertible car seats and cribs, travel systems, jogging strollers and high-end, designer-oriented products. Packaged Facts projects sales will grow by a CAGR of 2.2% to reach $7.8 billion in 2020. Future growth as in the past will be influenced greatly by the number of births and the economy. Recent indications are that both the birth rate and economy are increasing, albeit still at a slow rate, and it remains to be seen if the increases will continue. These positives for the market could be supported by a potential baby “boomlet” started by Millennial parents. In 2015, Millennial parents (ages 18-34) accounted for 42% of all households with children, making them an important segment of the parenting demographic.
Millennials, and many Gen Xers, are willing to spend extra for perceived higher quality products and services. Notably, they value transparency, authenticity, and brands that represent them and their lifestyles. ITP marketers continue to develop products that deliver benefits these consumers demand: convenience, adaptability and versatility, comfort, style and design. However with ITP products safety comes first. It is a huge concern for manufacturers and marketers of ITP products with product recalls a major challenge for the highly regulated industry. Manufacturers and industry organizations urge consumers not to buy second-hand or used products because they may not meet the most current safety standards, and new products are constantly introduced with technologies aimed at making products even safer.
The ITP durables market is fragmented with over a hundred manufacturers, marketers, and importers competing across categories and segments. While fragmented, the market is led by a handful of companies like Dorel Industries, Newell Brands and Goodbaby International that generally compete with multiple brands in numerous segments. Other players include midsize companies and more often smaller firms that compete in one or a few product segments. On the retail side the market is highly concentrated with 90% of sales taking place in mass merchandisers/supercenters, baby specialty stores and through e-commerce, which continues to grow at the fastest rate. The market is even more concentrated given that the majority of sales is controlled by less than 10 individual retailers: Babies R Us/Toys R Us, Wal-Mart, Amazon, Target, Buy Buy Baby, K-Mart, and Baby Depot (Burlington).
Scope of Report
This report presents a detailed analysis of the U.S. consumer market for infant, toddler, and preschool (ITP) durable furnishings and accessories suitable for children from infancy through age five. Products included are sold to consumers through U.S. retail channels including “bricks and mortar” stores as well as Internet sites, catalogues and others. Packaged Facts’ sales estimates only include purchase of new products by parents or gift-givers, not purchase of used or second-hand items. The 2015 sales estimate is based on current research and a revision of estimates from Packaged Facts’ 2010 report Infant, Toddler, and Preschooler (ITP) Home Furnishings, Accessories, and Toys: The U.S. Market. The current report as mentioned only includes sales of new, not used products. It also does not include product segments covered in the last report including soft goods, décor, and others. Also toys are not included, although infant activity items are part of this report.
Infant, Toddler, and Preschool Furnishings and Durables, 5th Edition discusses major players and brands, and analyzes their key activities and performance. Market size data are provided for 2011–2015 and projections for 2015–2020. The report outlines key issues and trends affecting the overall market, each category and segments defined as:
- Furnishings: furniture (cribs, bassinets, high-chairs, booster seats, dressers, toddler beds, changing tables, rockers and glider chairs, etc.), infant activity products (gyms, bouncers, jumpers, swings, walkers, play yards, etc.), safety products (baby gates, baby monitors, etc.), bathing/bathroom (tubs, potties, diaper disposal systems, etc.).
- Accessories: carriages, strollers, car seats, travel systems (compatible strollers and car seats), and baby carriers (rigid with carry-handle; and soft or hard-frame wearable types).
Not included in the reports’ sales estimates are: soft goods; furniture for kids over five years old, adults and general household use; décor and lighting; nursing and feeding products; consumables such as disposable diapers, baby wipes, etc.; toys, computers and software; home electronics and small appliances.
The information in this report was obtained from both primary and secondary research. Primary research included consultation with industry sources and on-site visits of retail stores. Secondary research entailed gathering data from relevant trade, business and government sources, as well as company promotional literature and annual reports. Our estimates of market size and company performance are based on various sources including reported revenues of product manufacturers and retailers; IRI, which tracks data in mass retail outlets; publications and other market research sources.
Our analysis of consumer trends relies on data from various sources including a national online consumer usage survey conducted in July and August 2016 by Packaged Facts and Simmons National Consumer Surveys for Winter 2008 through Winter 2016 from Simmons Research. The Packaged Facts national online consumer surveys reflect a panel of 2,000 U.S. adults (age 18+) that is balanced to the national population on the primary demographic measures of gender, age bracket, race/ethnicity, geographic region, marital status, presence or absence of children in the household, and household income. On an ongoing basis, Simmons conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population.