Luxury claims aim to reinvigorate the laundry market

Author: Adrian Atterby

Date published: 17 Sep 2007

Although the Western European laundry care segment was worth nearly US$31 billion in 2006, representing over 47% of total household care products' revenue, value growth in developed markets has been under increasing pressure

This slowdown has been due to unfavourable demographics in many of the major European markets, as well as further penetration of discounters and the use of laundry products as loss-leaders by key supermarket chains.

In order to try and boost value growth, manufacturers have unleashed a number of product innovations, all of which promote the idea of luxury. We have seen an increasing focus on fragrance, as well as the appearance of indulgent products and those claiming aromatherapy benefits. Henkel launched 'Persil with a touch of Vernel' in early 2006 , featuring essential oils and stimulating aromatherapy fragrances. In the UK, Unilever launched a new luxury fabric softener, Comfort Crème, which is aimed at those women who want a 'pleasure-seeking' experience.

Success or failure

Although the development of more luxurious products was intended to boost sales , by using the UK as a case study, it is possible to see that things do not always work out as intended. Despite manufacturers launching a number of new 'indulgent' and 'lifestyle' products, the market continues to decline in value, with Euromonitor International's latest figures showing a further 1.5% decline in 2006.

However, a number of other European markets did see growth in 2006 as consumers were persuaded to experiment with novelty. France, for example, went from a decline of 4% in 2005 to growth of 1% in 2006, partly due to rises in the marketing support offered to products such as P&G's Ariel. The German market also saw signs of recovery, moving from a decline of 6% in 2005 to growth of 3% in 2006, with sales revenue being boosted by price increases, but also by a willingness amongst consumers to try out new more expensive products. This changing consumer attitude helped to boost shares of the market's two leading players, Ariel and Persil, both premium brands.

Positive signs set to continue?

It is likely that over the course of the next few years the market will continue to see new, luxurious products being launched. P&G has, for instance, recently introduced a new range of detergents and fabric softeners, which all feature natural ingredients, such as baking soda or citrus extracts, as well as scents such as white lilac and lemon verbena. Earlier this year Unilever brought Surf Small & Mighty With Essential Oils to the UK market, a new line of products promoting aromatherapy features, wellness and a more sensual experience.

Brands are also likely to increase the pace, at which they introduce new fragrances into the market. This allows them to keep their product fresh in consumers' minds and encourages consumers to stay loyal instead of experimenting with other brands.

Finally, brands need to work with retailers to ensure that products are not being offered at a steep discount or as part of two-for-one promotions in order to attract consumers in-store. This is a problem that has affected sales of alcoholic drinks and tissue products, in particular, where prices have been continually marked down and consumers have now come to expect low prices.

Adrian Atterby; Industry Analyst Household Care Products: adrian.atterby@euromonitor.com