After a period of sustained development, global value sales of household cleaning wipes have stagnated recently. Even in markets where consumers have access to the highest levels of disposable income, such as North America or Western Europe, sales have suffered, with the French market in particular witnessing poor value performance.
One of the main reasons for this decline is the perceived worsening of global economic conditions. This has caused consumers to be more watchful over their spending habits, resulting in a switch back to more traditional cleaning products, which are seen as being more cost-effective. Household wipes are still viewed as luxury items by the majority of consumers, who fail to recognize the additional benefits the products bring when compared to older formats and are therefore reluctant to pay a price premium for them.
Growth in both the quality and the availability of private label products has also had a detrimental effect on the market. Not only have they taken significant business away from brands, but they have also restricted manufacturers’ ability to increase prices. The effect has been most pronounced in France where, despite volume sales declines in most categories of between 5-10%, revenue has declined much more sharply.
Difficulty in Expanding Usage
Manufacturers have also found it difficult to expand sales of household wipes beyond a small number of core countries. Indeed the six largest markets (U.S., Japan, Germany, Canada, France and the U.K.) account for more than 80% of total global value. Although this number is falling, it is doing so extremely slowly, by an average of 0.6% per year since 2001. When we compare this with the personal wipes market, we see that the top six countries (the U.S., Japan, the U.K., France, Spain and Italy) generate approximately 65% of value and have seen their combined share of the market decline by slightly more than 1% year on year since 2001.
The reason for this is that during this period a number of developing countries, such as Brazil, China and Russia, have seen the income they create from the sale of personal care wipes increase significantly, while the same cannot be said of household wipes. This is because, unlike household wipes, personal wipes have a product considered to be indispensable by large numbers of consumers, whether in developed or emerging markets. Baby wipes are a repeat purchase item that has helped expose customers to the benefits of wiping products for personal hygiene.
Stronger Materials and Cleaning Solutions Dominate Innovation
Of the three main household wipes categories—dry-electrostatic wipes, wet impregnated wipes and floor cleaning systems—impregnated wipes have proved the most popular with consumers. As a result, manufacturers have focused the majority of their research and development budgets on this sector, continually launching new products and further segmenting the market in order to try to create additional value.
One of the main trends driving innovation has been consumers’ desire for easier cleaning, while a second complaint concerns the tendency of wipes to tear, further reducing users’ ability to clean thoroughly. In order to meet these consumer demands, brands such as P&G’s Mr. Clean have developed products from new tougher materials. The company’s latest range of wipes, Mr. Clean Power Multi-surface Wipes, claim they are 30% thicker than competing offerings. The brand has also invested considerable capital in developing new packaging. Instead of being offered for sale in a soft-pack, they come in a canister that the company claims allows for easier access, and therefore less snagging.
Furthermore, many brands, such as Flash Ultimate now offer wipes with more powerful cleaning solutions, mirroring progress in the surface-cleaning category.
Increase In Popularity
As well as using better quality, thicker materials and more powerful cleaning solutions, manufacturers have attempted to tap into consumer demand for environmentally sound products. They are able to do this in a number of ways. The easiest way is to use natural ingredients, based on plant extracts such as those offered by niche providers like Method.
The second way is by using biodegradable materials and again it has been primarily niche brands that have adopted this strategy. Both Method and Simple-Green offer biodegradable, all-purpose household cleaning wipes, which come in a variety of fragrances and, in the case of Method’s product range, are also flushable. This is particularly useful when marketing toilet care wipes as it allows for quick and convenient disposal.
As the trend towards more environmentally sound products has matured, the major manufacturers have also started to launch products in order to capture share of the market. SC Johnson, for instance, has launched a biodegradable/flushable version of its Scrubbing Bubbles bathroom wipes.
Further Segmentation Intended To Boost Growth
As market growth has slowed, manufacturers have attempted to boost flagging sales by further segmenting the market. SC Johnson, for instance, introduced Pledge Stainless Steel Wipes, which it described as “an easy way to restore stainless steel’s original shining surface.” The company also introduced Pledge Clean & Dust Wipes, which are designed to remove more dust and allergens than traditional dry dusting. This taps into another consumer trend, solutions that offer health benefits and protection. Consumers increased fears regarding the spread of infections such as MRSA and bird-flu has boosted the market for disinfecting wipes. Reckitt Benckiser, for instance, launched a new Lysol product during 2007, Lysol Disinfecting wipes.
Floor Cleaning Systems Suffer Due to Lack of New Customers
The global market for 3-in-1 floor cleaning systems (containing a trigger device, wipe/pads and cleaning solution) peaked in 2003 with sales falling by more than 10% since then as many existing consumers have exited the market due to perceived lack of performance. Sales have also suffered in the segment’s main market, the U.S., due to worsening economic conditions which has seen many users switch back to more traditional cleaning techniques for financial reasons. Despite this, manufacturers have continued to invest in further innovation , particularly in the U.S. where it is now possible to purchase Febreze branded cleaning solutions for P&G’s range of Swiffer WetJet products.
In order to try to support sales, P&G in particular has also employed new and novel marketing techniques. For example, in order to support its Swiffer brand, P&G has teamed up with YouTube to launch a dedicated channel. Here customers are encouraged to post short video clips detailing why they have ‘broken up’ with their old cleaning methods in favor of Swiffer. The winning video, chosen by a team of cleaning experts and music professionals will receive $15,000 while five runners-up will each get $1000. The YouTube site was chosen as it has already proved a favorite medium for fans of the Swiffer brand to show their love for the range. Even before this contest was launched, there were already 600 different videos on the site featuring Swiffer products.
Dry electro-static wipes and wet floor wipes have also seen value sales decline sharply in recent years, with many consumers coming to the conclusion that they were nothing more than expensive gimmicks. Also, there would seem to be a limited pool of new consumers willing to invest in expensive starter kits. However, brands continue to bring new innovations to market, particularly in the area of fragrance. Indeed, as with the floor cleaning systems, it is now possible for U.S. consumers to purchase Febreze branded dusters and dry-electro static floor wipe refills for Swiffer devices.
Method also launched the first eco-friendly floor cleaning system, the omop during 2007. The starter kit comes complete with mop, cleaning solution (naturally made from a solution free of harsh chemicals), microfiber cleaning clothes and biodegradable sweeping cloths. The mop itself features a curve handle, which its makers claim produces better results and, because of its ergonomically designed shape, is healthier for the consumer to use.
Companies are willing to bring further novelty into product categories, particularly those featuring a device and refill wipes, as they believe consumers who purchase such combinations tend to display greater brand loyalty as they do not want to waste the initial investment spent on starter kits. The newest devices have tended to be less expensive, however, as typified by SC Johnson’s Magic Scrubs product, which was launched in the U.K. This is a handheld device which claims to make cleaning bathroom surfaces quicker as well as shifting stubborn stains more easily.
Notable innovations have also been seen outside of the home cleaning category. In Israel, Reckitt Benckiser launched a laundry wipe under its Kalia brand. This wipe has been developed with a stain removal agent impregnated into it to tackle dirt, while clothes are being worn. This type of product is ideal for holiday markers or business people who may need to clean ‘on the go’ and who do not have access to laundry facilities.
Country Focus: Canada
Despite global value sales growth struggling to maintain momentum in recent years, there have been a number of individual success stories. The Canadian market, for instance, has managed to post impressive results across the majority of its product segments.
Aside from the usual trend of greater convenience, growth in the Canadian market has been driven by a combination of events: a major outbreak of SARS in Toronto during 2003, continuing Clostridium Difficile outbreaks in Montreal hospitals, fears of avian flu BSE-infected cows in Alberta, and the recall of botulism-tainted spinach and carrot juice in 2006 have all added to consumer fears regarding the spread of germs. The regularity of these problems has focused consumer attention, which marketers have been quick to exploit. Reckitt Benckiser’s recent campaigns for Lysol have focused on the message that its wipes can help prevent viruses and the spread of germs as well as keeping surfaces clean. As a result, many consumers now view disinfectant wipes as a necessary expense.
One interesting detail regarding the Canadian wipes market is the low proportion of revenue generated by the wet impregnated wipes segment. While in other leading markets, this is the largest segment, generally accounting for between 50-80% of value, in Canada the figure is around 15%. This suggests that significant growth potential for the wipes category still exists in Canada and that the products’ usage has not yet broken out of the most affluent demographic groups as less wealthy segments of society are unlikely to purchase wiping products that require an expensive starter kit.
Even within the impregnated wet wipes category it is the most expensive product variant, wet floor wipes, which require the use of a kit, continue to post the highest levels of growth.
Continued expansion of the market has begun to attract the attention of players who have started to challenge the traditional dominance of P&G. SC Johnson has tended to ride the coat-tails of the Swiffer brand, releasing products under its Pledge brand, which imitate those developed by Swiffer, but which are substantially cheaper than the originals. Although consumers are generally loyal to Swiffer, the enormous growth means that some sales will naturally leak into other brands. Furthermore Pledge has been able to generate sales from more cost-conscious consumers.
Future No Less Bleak
According to Euromonitor International, future sales of household care wipes globally will continue to suffer from low growth rates (1% CAGR by 2011 for overall wipes and floor cleaning systems) because of a combination of factors. Firstly, the weakening of global economic performance will affect consumer willingness to continue paying a price premium for such products. This could result in many potential buyers either switching back to traditional cleaning methods or, primarily in the European markets, opting for cheaper private label offerings.
As the popularity of such products grows, it will limit brands’ flexibility when considering price rises. Under normal circumstances, they would then rely on innovations to differentiate themselves from store brands and to justify price differentials. However, it is difficult to envisage further substantial innovations being brought to market; rather, it is likely we will see small improvements in the quality of the wipes and the cleaning formulations used.
Manufacturers will continue to find it difficult to create substantial value in new markets, such as Russia or China, despite the popularity of personal care wipes. Indeed, even by 2012 Euromonitor International forecasts that total revenue generated through the sale of household cleaning wipes across these two countries combined will still only account for less than $10 million.