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Refrigerators, Freezers and Dishwashers - US - November 2010

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising videos
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Market in contraction from 2005-2010
Housing market and consumer confidence key drivers
Green living and incentives boost demand for energy efficiency
Large used market competes with new products
Freezers outperform
Sears keeps post as leading retailer
Three dominant suppliers with extensive offerings, tiered product lines
Brand qualities of major brands
Energy conservation, smart appliances head up innovation
Brands expand role of websites, social media, in-store promotion
Brands targeting same buyers reduces brand differentiation
Sixes—one in six buy used, most appliances purchased in last six years
Some willing to spend more, others do spend more
Brands on-the-money in showcasing most desirable features in ads
Two in three sales related to a move, broken appliance, first-time purchase
Multiple child households lead in intention to purchase
INSIGHTS AND OPPORTUNITIES
New ways to play on energy savings
The landlord’s darling
Model homes for everyone
Let’s all get together to get these kids started
Certified pre-owned
The about-to-move market
Entry-level energy efficiency
Boomers ready to downsize
INSPIRE INSIGHTS
Trend—Brand Tribe
MARKET SIZE AND FORECAST
Key points
Recession and collapse in housing market drive down demand
2010 offers some bright spots
Figure 1: Total U.S. sales and forecast of refrigerators, freezers and dishwashers at current prices, 2005-15
Figure 2: Total U.S. sales and forecast of refrigerators, freezers and dishwashers at inflation adjusted prices, 2005-15
Fan-chart forecast
Figure 3: Fan-chart forecast at 50-95% confidence levels, 2005-15
MARKET DRIVERS
Key points
Cash for Appliances program
Cooking more at home
Homeowners show much higher appliance ownership rates
Figure 4: Ownership of refrigerator, freezer or dishwasher, by home ownership, July 2009-March 2010
Renters spend less on appliances
Figure 5: Average amount spent on recently purchased appliance, by home ownership, April 2010
Moving a central driver for buying an appliance
Figure 6: Reason for purchase of appliance, August 2010
Housing market remains cold
Figure 7: Sales of existing and new single-family homes, 2001-10
Trend towards smaller homes could reshape appliance demand
Impact of the downturn
Consumer confidence makes only limited recovery in 2010
Figure 8: Index of Consumer Sentiment (ICS) from Thomson Reuters/University of Michigan Survey of Consumers, 2001-10
Remodeling in decline
Figure 9: National Association of Home Builders (NAHB) Remodeling Market Index (RMI) 2001-10
Green living, economizing and rebates fuel demand for Energy Star
Green living trends fuel interest in eco-friendly products
With appliances, being green means saving money too
Energy Star program designates resource-saving appliances
Cash for Appliances program fuels purchasing and awareness of Energy Star products
New energy standards to take effect in 2014, with more being lobbied for…
Smart appliances likely to be next trend reshaping market
COMPETITIVE CONTEXT
Key points
One in six buy used
Figure 10: Purchase of appliance new or used, by household income, August 2010
Doing dishes by hand
SEGMENT PERFORMANCE
Key points
Figure 11: U.S. sales and forecast of refrigerators, freezers, and dishwashers at current prices, by segment, 2005-15
Figure 12: U.S. sales of refrigerators, freezers, and dishwashers, by segment, 2008 and 2010
SEGMENT PERFORMANCE—REFRIGERATORS
Key points
Declines in both sales and shipments from 2006 onwards
Energy Star, French doors and stainless steel buoy higher price points
Sales and forecast of refrigerators
Figure 13: U.S. sales and forecast of refrigerators at current prices, 2005-15
Figure 14: U.S. sales and forecast of refrigerators at inflation-adjusted prices, 2005-15
Significant drops in unit shipments in 2008 and 2009
Figure 15: Factory unit shipments of refrigerators*, 2004-09
SEGMENT PERFORMANCE—DISHWASHERS
Key points
Sales and forecast of dishwashers
Figure 16: U.S. sales and forecast of dishwashers at current prices, 2005-15
Figure 17: U.S. sales and forecast of dishwashers at inflation-adjusted prices, 2005-15
Unit shipments fall in 2008, less so in 2009
Figure 18: Factory unit shipments of dishwashers*, 2004-2009
SEGMENT PERFORMANCE—FREEZERS
Key points
Sales and forecast of freezers
Figure 19: U.S. sales and forecast of freezers at current prices, 2005-15
Figure 20: U.S. sales and forecast of freezers at inflation-adjusted prices, 2005-15
Unit shipments grow in 2008, but fall again in 2009
Figure 21: Factory unit shipments of freezers*, 2004-09
RETAIL CHANNELS
Key points
Appliance/electronics stores and mass merchandisers grow share
Figure 22: U.S. sales of dishwashers, freezers and refrigerators, by retail channel, 2008-10
Best Buy
Walmart
Lowe’s
Home Depot
Sears
LEADING COMPANIES
Key points
The top three suppliers
Whirlpool Corporation
General Electric
Electrolux
Smaller significant suppliers in the appliance market
LG Electronics
Haier
Samsung (Korea)
BSH (Bosch und Siemens—Germany)
High-end suppliers with prestige brands
INNOVATIONS AND INNOVATORS
Key points
Resource conservation is at the forefront of innovations
Innovation in refrigerators
Separate cooling systems for freezer and refrigerators
Whirlpool’s new side-by-side improves temperature management and offers spill-control
Figure 23: Whirlpool’s side-by-side with 6th Sense technology
LCD displays in premium lines
“Measured fill” dispenses measured amount of water
French door freezers with extra pantry drawers
Figure 24: Samsung’s French door refrigerator with pullout snack drawer
Innovations in dishwashers
Improved sprays and steam technology for more powerful, versatile cleaning
Control panels with elegant looks and additional features
Improved sensors and leak detection
GE’s SmartDispense saves time loading detergent
Miele’s high-temperature kills bacteria
Shhh! Quiet machines at work
Use of new technologies to monitor, control and repair appliances
Whirlpool and GE develop smart appliances for smart meters
LG and Kenmore launch self-diagnosis technology
MARKETING STRATEGIES
Key points
 BRAND POSITIONING
Whirlpool brands lead, followed by GE, Kenmore and Electrolux
Figure 25: Brand of appliances owned, August 2010
Whirlpool
Whirlpool: stylish, Energy Stars with added features
Figure 26: Whirlpool Gold side-by-side refrigerator
Maytag touts more masculine brand image and highlights durability
Figure 27: Maytag’s French door refrigerator with bottom freezer and Jetclean Plus dishwasher
Amana offers stylish, affordable contemporary design
Figure 28: Amana Green Tea refrigerator
KitchenAid benefits from strong association with small kitchen appliances
Kenmore—revamped, upgraded brand image
Figure 29: Kenmore’s new brand logo and French door Bottom Freezer
GE—High-tech innovation and conservation
Electrolux (Frigidaire, Electrolux)
Electrolux—stylish, high-functioning products for “amazing” women
Figure 30: Electrolux dishwasher
Frigidaire—focusing on modern moms with an updated image
Figure 31: Frigidaire new logo
 TELEVISION ADVERTISING
GE profile targets remodelers and highlights rebates
Figure 32: GE Profile appliances, “$1,000 rebate” TV ad, 2010
Kenmore shows redesigned products in futuristic landscape
Figure 33: Kenmore elite refrigerator, “radically designed “ TV ad, 2010
Samsung showcases four-drawers for families
Figure 34: Samsung, “Dedicated to wonder” TV ad, 2010
LG dramatizes capacity of new refrigerators
Figure 35: LG French door refrigerator, “Is it…?” TV ad, 2010
 WEBSITES OFFER DEMOS, DESIGN TOOLS, BLOGS
 OTHER MARKETING
Whirlpool undertakes 70-city training tour to focus on in-store marketing
Sears promotes layaway, Blue Appliance Crew, “The Big Switch,” discounts
Figure 36: Sears Blue Appliance Crew, 2010
APPLIANCE OWNERSHIP
Key points
Refrigerators found in almost all HHs, dishwashers in about 80%
Figure 37: Ownership of refrigerators, freezers and dishwashers, August 2010
Renters twice as likely to report that someone else owns their appliance
Figure 38: Appliance in home but owned by someone else, for renters, August 2010
Income drives ownership
Figure 39: Ownership of refrigerators, freezers and dishwashers, by household income, August 2010
First-time buys start among 18-24s
Figure 40: Ownership of refrigerators, freezers and dishwashers, by age, August 2010
Appliance ownership increases for those with children in household
Figure 41: Ownership of refrigerators, freezers and dishwashers, by children in household, August 2010
THE PURCHASE CYCLE
Key points
New vs. used decision determined largely by household income
Figure 42: Purchase of appliance new or used, by household income, August 2010
Two thirds purchased in past six years
Figure 43: When kitchen appliance was purchased, August 2010
Younger buyers in online sample actively acquiring new appliances
Figure 44: Purchased kitchen appliance in past three years, by age, August 2010
Households with children purchased more recently
Figure 45: Purchased kitchen appliance in past three years, by children in household, August 2010
SPEND ON APPLIANCES
Key points
Average spend near $1K for combo refrigerators
Figure 46: Average amount spent on recently purchased appliance, August 2010
Income drives average spend
Figure 47: Average spend on combination refrigerator/freezer or built-in dishwasher, by household income, August 2010
Age and lifestage also shape spend
Figure 48: Average spend on refrigerator/freezers and built-in dishwashers, by age, August 2010
REASON FOR PURCHASE
Key points
Replacement primary reason for most purchases
Figure 49: Reason for buying appliance, August 2010
Younger consumers more likely to be first-time buyers
Figure 50: Reason for buying last combination refrigerator/freezer, by age, August 2010
Figure 51: Reason for buying last built-in dishwasher, by age, August 2010
INTENT TO PURCHASE
Key points
Income shapes intent to purchase
Figure 52: Intent to purchase new appliance in the next six months, by household income, August 2010
Those with two or more children show strong intent to purchase
Figure 53: Intent to purchase new appliance in the next six months, by children in household, August 2010
COMBINED REFRIGERATOR/FREEZER—PREFERENCES AND ATTITUDES
Key points
Energy efficiency and design at front of consumer attention
Figure 54: Preferences for combination refrigerators/freezers, August 2010
Upper income buyers value appearance, add-on features
Figure 55: Preferences for combination refrigerators/freezers, by household income, August 2010
Younger buyers seek energy-efficient, stainless steel and black appliances
Figure 56: Preferences for combination refrigerators/freezers, by age, August 2010
Households with children seek energy-efficient, stylish appliances
Figure 57: Preferences for combination refrigerators/freezers, by children in household, August 2010
Side-by-sides most widely preferred style
Figure 58: Type of door style owned and preferred in combination refrigerator/freezer, August 2010
Side-by-sides most widely owned by upper-income households
Figure 59: Type of door style owned in combination refrigerator/freezer, by household income, August 2010
Strong interest in French doors in upper-income households
Figure 60: Type of door style preferred in combination refrigerator/freezer, by household income, August 2010
Majority willing to pay more for water and ice dispensers in refrigerator door
Figure 61: Willingness to pay more for water and ice dispensers or counter depth, by household income, August 2010
Under-45s ready to invest in water and ice
Figure 62: Willingness to pay more for water and ice filter/dispenser or counter depth, by age, August 2010
Households with children ready to pay more for added features
Figure 63: Willingness to pay more for water and ice dispensers or counter depth, by children in the HH, August 2010
PLACE OF PURCHASE
Key points
Sears most widely used retailer for appliances
Figure 64: Source of refrigerator, freezer or dishwasher, August 2010
Upper-income households favor “other” retailers
Figure 65: Source of combination refrigerator/freezer, by household income, August 2010
CLUSTER ANALYSIS
Ice and Waters
Demographics
Characteristics
Opportunity
Planners
Demographics
Characteristics
Opportunity
Basics
Demographics
Characteristics
Opportunity
Cluster characteristics
Figure 66: Combination fridge/freezer clusters, August 2010
Figure 67: Role in household purchase of appliances, by clusters, August 2010
Figure 68: Intent to purchase major kitchen appliances, by clusters, August 2010
Figure 69: Homeownership, by clusters, August 2010
Figure 70: Purchase of appliance new or used, by refrigerator and freezer clusters, August 2010
Figure 71: Willingness to pay more for water and ice dispensers or counter depth, by refrigerator and freezer clusters, August 2010
Figure 72: Preferences for combination refrigerators/freezers, by refrigerator and freezer clusters, August 2010
Cluster demographics
Figure 73: Combination fridge/freezer clusters, by gender, August 2010
Figure 74: Combination fridge/freezer clusters, by age group, August 2010
Figure 75: Combination fridge/freezer clusters, by household income, August 2010
Figure 76: Combination fridge/freezer clusters, by race, August 2010
Figure 77: Combination fridge/freezer clusters, by Hispanic origin, August 2010
Cluster methodology
TRENDS IN COOKING AT HOME
Key points
Enthusiasts participate in cooking behaviors designed to improve health
Figure 78: Growth of health-related cooking behaviors, by cooking enthusiast segment, July 2010
Enthusiasts show more “foodie” behaviors
Figure 79: Increase of non-health-related cooking behaviors, by cooking enthusiast segment, July 2010
About one in three cooks making fewer meals with meal kits
Figure 80: Decrease in non-health-related cooking behaviors, by cooking enthusiast segment, July 2010
APPENDIX—OTHER USEFUL TABLES
Major appliance sales of leading retailers
Figure 81: Sales of major home appliances, by top appliance retailers, 2008
25s-54s more likely to be planning a purchase
Figure 82: Intent to purchase new appliance in the next six months, by age, August 2010
Replacement less significant reason for purchase in higher-income households
Figure 83: Reason for purchase of last combination refrigerator/freezer, by household income, august 2010
Figure 84: Reason for purchase of built-in dishwasher, by household income, august 2010
Households with kids less likely to cite replacement as reason for purchase
Figure 85: Reason for purchase of last combination refrigerator/freezer, by children in household, august 2010
Figure 86: Reason for purchase of built-in dishwasher, by children in household, august 2010
Younger buyers show lower ownership of side-by-side refrigerator/freezers
Figure 87: Type of door style owned in combination refrigerator/freezer, by age, august 2010
Younger buyers show highest interest in French door products
Figure 88: Type of door style preferred in combination refrigerator/freezer, by age, august 2010
High-income households turn to specialty stores
Figure 89: Source of built-in dishwasher, by household income, august 2010
Older buyers turn to specialty stores
Figure 90: Source of built-in dishwasher, by age, august 2010
Figure 91: Appliance in home owned by someone else, renters vs. homeowners, August 2010
APPENDIX—TRADE ASSOCIATIONS

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