March 2006

Global Trends Watch: The home front

Staying in is the new going out, and brands are quickly catching up to the fact consumers want professional entertainment experiences in the comfort of their own homes. By Claudine Baker

A cheap Saturday night in was once just a pizza and a DVD. But now consumers are increasingly staying at home and transforming their living space into luxurious social and entertainment areas. Brands have been quick off the mark to offer professional-grade products and services, which previously were only available in the public domain.

There are a number of theories about the driving force behind this trend. One is fear-fuelled cocooning after 11th September. Another is ageing baby boomers with high levels of disposable income and empty rooms after the kids have flown the nest. But it is not necessarily just fear or space that is keeping people at home these days.

Sport Court International is a US-based manufacturer of indoor and outdoor residential game courts and sports flooring. It installs anything from synthetic putting greens to indoor basketball courts. Kevin Morgan, vice president of marketing, believes consumers are looking for the convenience and social aspect of entertaining family or friends at home.

He explains: "For a lot of people, time is the commodity that's most valuable, so if they do want to go out and play a quick game of basketball or a few putts on the green, they have a bit of time after dinner to go and do that."

Morgan also suggests that parents are often keen to keep their children off the streets in their leisure time, upgrading their homes to make them more appealing to the younger generation.

Lesley Salem, insights director at consultancy Futurebrand, agrees, saying doting parents are the key drivers behind the shift towards home upgrades. "Kids in the last decade have been used to continual stimulation and immersion," she claims. "Our expectations and standards of how we entertain ourselves are ever growing."

Salem also argues that staying at home does not necessarily mean consumers are shutting themselves off from public domains: "The affordability of technology means that homes are more connected spaces," she explains. "If you speak to people, they won't say they're staying in because they don't want to go out. They actually see their home as the facilitator to connecting with the world at large, even if that's virtually, rather than a real experience."

Extending experiences

It does appear that consumers who pay for professional-grade domestic entertainment and products are generally not concerned with replacing public experiences as much as extending them.

David Young, chief executive of BMI Gaming, which sells arcade games, supports this. His offerings are not cheap, with pinball machines and arcade games ranging from $2,500 (£1,435) to more than $140,000 (£80,335), price tags that demand a more affluent buyer. Accordingly, most of his customers have spaces of 10,000 sq ft or more to play in at home.

"Still, if you're the kind of person who was going out to arcades before you installed them at home, the chances are you still are," says Young.

The same is true with theatre performances. At Poland's Teatr Rozmaitosci in Warsaw, actors play to audiences both in their own homes and in the company's theatre. Tickets for home performances sell for 500 zloty (£90) rather than the 50 zloty (£9) it costs to see a play at the theatre.

A recent play, Mleko (Milk), performed in audiences' homes, sold out despite the cost, but the ticket price did not cover the expense of the production. Piotr Gruszczynski, Teatr Rozmaitosci's literary advisor, explains: "There were the actors' salaries, the cost of the car to take them to performances, and someone to protect them because the actors didn't know where they were going or what kind of audience they were playing to."

Although there was no tangible financial gain, the performances, he adds, boost the theatre's artistic credence.

Teatr Rozmaitosci is not the only company offering home services to boost the brand's profile. British fashion brand Top Shop offers a 'party selling' service, whereby a willing customer arranges a handful of friends/potential buyers to come over, while a Top Shop style advisor arrives armed with the latest ranges. The retailer has admitted that the exercise is less about flooding the coffers than increasing brand loyalty.

But it is also possible to offer home services profitably. US-based Magnolia, a division of BestBuy, has turned installations of home cinemas into a branded, nationwide business. Its consultants come to customers' houses, advise them which products to buy - from the reclining seats to the sound system - and arrange clutter-free installation, taking into account available space and existing furniture.

Uptake is on the increase: BestBuy reported an 11% rise in net earnings to $138m (£79.5m) for the quarter ended December last year, quoting the rise in flatpanel TV sales, which incorporate Magnolia's services.

Entertainment innovations

But how are brands planning to ride the wave as consumers search for new ways to show off their wealth within the realms of domesticity? BMI Gaming's Young believes his company's future lies in combining entertainment with exercise. He has high hopes for making the Propcycle mainstream -- an arcade game where players pilot a winged bicycle and try to earn points popping hot-air balloons by sitting on an exercise bike and pedalling to keep afloat.

Sport Court is introducing Daytona race track-style garage flooring after its research showed that 90% of US homeowners now enter their houses through the garage. The company is also bringing out a line of skateboard ramps and rails for backyard installation.

In consumer electronics, bigger is becoming better. Japanese electronics brand JVC is planning to launch rear-projection high-definition 56-inch and 70-inch flatpanel screens later this month in time for the World Cup football tournament in June. It predicts that future high-definition front projectors will allow for even larger screen sizes. Other brands have started tapping into the home cinema craze too. Ron Loveday is president of Hawaiian Lomi Group, which manufactures theatre seating with massage mechanics in all chairs. He says that he is also planning to showcase his products in high-end US hotel rooms, where brand experience marketing is all the rage. Anything from the bed to the chest of drawers is made available to the hotel client via an online brochure following their stay.

The American painter and filmmaker Andy Warhol once said/ "I have social disease. I have to go out every night. If I stay home one night I start spreading rumours to my dogs."

It seems that a lot has changed since then.

Key learnings

- Consumers are spending on high-end domestic services and products. This may be due to post 11th September cocooning, wealthy baby boomers with spare rooms and higher expectations for entertainment and stimulation.

- Consider pricing. If something needs to hit the mainstream, it can still be at a premium level but has to be accessible to a wider market.

- Monitor key entertainment trends, not just in the home but out of the home, and look at replicating miniature versions of that inside consumers' houses.

- Brands have to appeal to the female eye. According to the Consumer Electronics Association, women influence 88% of household consumer electronics purchases and account for roughly 50% of the spending.