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The dirty truth about laundry detergents is out. According to Information Resources, Inc., in supermarkets, drug stores, and mass merchandisers, excluding Wal-Mart, this mature category has seen an overall decrease in dollar sales of 3.7 percent for the latest 52 weeks ending Oct. 3. Powdered detergents plunged 10.5 percent.
In supermarkets the main cause of this slide, say retailers, is increased competition from supercenters and discounters.
"Currently the laundry category is declining, due primarily to channel shifting," notes Bobbi Iacovelli, nonfoods category manager at Pittsburgh-based Giant Eagle. "Customers in this category continue to shop numerous retailers for product variety and price points. While promotional price is still a big driver in this category, everyday shelf price has become increasingly important due to competition from the discount retailers."
"There are more classes of trade today featuring laundry detergent, which has been tough on the grocery class of trade," says Jack Paulk, grocery category manager/buyer at Chandler, Ariz.-based Bashas'.
Paulk makes another observation that is central to understanding the dynamics of the category right now: "Nationally and locally, powder is on a big decline, and liquid is on the increase." Industry observers cite convenience as playing a major role in consumer preference, and the pursuit of convenience is driving important product developments in the category.
Category leader Procter & Gamble has been taking up the challenge. "A couple of years ago we took a fresh look at our laundry business, in search of new growth opportunities in a category that had been somewhat stagnant," explains Steve Sholtes, industry affairs manager at the Cincinnati-based manufacturer. "We chose to focus on consumer-driven innovation as our key strategy for strengthening and building our leadership in the category.
"In the past year, we've gone to market with products like Tide Stainbrush, Gain Fabric Enhancers, and Cheer Dark, plus scent line extensions in both Tide and Gain," Sholtes notes.
The company's most recent product launches in the category include Tide with a Touch of Downy (TWTD), which combines two trusted brands as well as a detergent and fabric softener in one product.
"The concept of TWTD was one of 125 ideas tested with consumers," says Sholtes. "It ranked as one of the top ideas. TWTD is off to a strong start behind strong marketing support, which includes samples distributed via the Internet."
Other manufacturers have come out with innovative products, as well. Scottsdale, Ariz.-based Dial Corp., maker of Purex, the No. 2-selling detergent brand overall, has rolled out such line extensions as Purex for Dark Fabrics, Purex Sunshine Clean, and Purex for High Efficiency Washers.
For their part, retailers are working harder than ever to move laundry detergents from their shelves. Strategies include keeping prices low and stocking plenty of new and premium products.
"We have added Sea Mist laundry detergent to our product mix at a competitive opening price point, which has been positively received by customers thus far," observes Giant Eagle's Iacovelli. "In addition, we have re-examined our everyday shelf price of many laundry detergent brands as part of Giant Eagle's recent storewide pricing initiative."
In private label, "We offer Valu Time laundry detergent and Giant Eagle Surge laundry detergent to provide consumers with value alternatives to the leading and/or national brands," she adds. "Both continue to perform very well."
"The premium and the value items, for us and the market, seem to be on the increase, compared to mid-tier," notes Bashas' Paulk. "At Bashas' we are lucky in that we are still growing our market share in a total market that is fairly flat." Another way Bashas' continues to grow share is by keeping up with category innovations. "New items, such as TWTD and new scents, have helped the category, and we try to stay on top of these," he says.
Giant Eagle has also benefited from TWTD's August launch. "The entrance of [it] seems to have reinvigorated the category, as some of the TWTD SKUs are already moving faster than base Tide SKUs," notes Iacovelli.
Most important of all, perhaps, is understanding why people buy certain products in the first place. "Laundry detergent seems to be a category [in which] people use the brand their mother used, or one that they believe will do a great job, so just any cheap product will not necessarily work," explains Bashas' Paulk. "People think more of value than just price on this."