Table of Contents
Executive Summary
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- The market
- Sales recover momentum in 2019, but will fall sharply over the next year
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- Figure 1: Forecast of UK value sales of major domestic appliances (adjusted for COVID-19), 2014-24
- Market segmentation remains unchanged in 2019
- Online retailers make gains
- Price deflation encourages purchasing, but uncertainty lies ahead in the housing market
- Impact of COVID-19 on Major Domestic Appliances
- COVID-19 could hold lasting implications for Major Domestic Appliances
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- Figure 2: Expected impact of COVID-19 on Major Domestic Appliances, short, medium and long-term, April 2020
- Companies and brands
- Brands innovate for the future
- A heightened focus on smart tech
- Total advertising spend down 9.2% year-on-year in 2019
- Samsung and Bosch: two standout brands
- The consumer
- 67% of consumers have purchased a major domestic appliance in the past three years
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- Figure 3: Purchases in the past 3 years, February 2020
- Beko tops mass-market purchases, but brand choice varies by product
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- Figure 4: What brand they purchased, washing/tumble drying, February 2020
- Online is the most popular channel and will surge in 2020 amid the COVID-19 outbreak
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- Figure 5: Channel of purchase, February 2020
- Breakdowns trigger the majority of purchases
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- Figure 6: Triggers to purchase, February 2020
- Price and quality considerations underpin brand choice
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- Figure 7: Key purchase drivers, February 2020
- The store remains indispensable but needs increased customer engagement
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- Figure 8: Behaviours in the major domestic appliances market, February 2020
- Sustainability considerations are changing the way that people shop
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- Figure 9: Environmental concerns, February 2020
- Interest in innovation is significant
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- Figure 10: Attitudes towards major domestic appliances, February 2020
- What we think
Impact of COVID-19 on Major Domestic Appliances
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- Short, medium and long-term impact on the industry
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- Figure 11: Expected impact of COVID-19 on Major Domestic Appliances, short, medium and long-term, April 2020
- Opportunities and Threats
- Economic uncertainty will lead to a lengthening of the replacement cycle
- Home improvement projects could move up the agenda in the short-term
- Temporary disruptions in the supply chain
- Retailers with a strong credit offering could benefit
- Accelerating the shift to online
- Net-long term benefit for online retailers
- A role for augmented reality
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- Figure 12: Dixons Carphone Point & Place Augmented-Reality website feature, 2020
- Greater integration of online and offline offerings
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- Figure 13: Dixons Carphone, Shoplive, May 2020
- Smaller regional retailers could collapse
- Push environmental concerns up the agenda
- Consumers will remember brands that helped the effort
- Impact on the Major Domestic Appliances market
- COVID-19 will see double-figure sales loss for 2020…
- …and have lasting implications beyond this
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- Figure 14: Forecast of UK value sales of major domestic appliances (adjusted for COVID-19), 2014-24
- Shifts in consumer behaviour
- A fundamental change in shopping behaviours
- Nearly one third of consumers expect to spend less on their home…
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- Figure 15: Changes in spending habits on home and gardening products, 26th March-23rd April, 2020
- …but there could be opportunities for the home
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- Figure 16: Consumers that expect to spend more on sector over the next month, 16th-23rd April, 2020
- How the crisis will affect Major Domestic Appliances’ key consumer segments
- Older consumers lead the shift in shopping behaviour
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- Figure 17: Changes in shopping behaviour, by age, 16th-23rd April 2020
- Expected spending is spearheaded by younger consumers
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- Figure 18: Consumers that expect to spend more on the home over the next month, by age, 16th-23rd April 2020
- Spending among less affluent consumers will drop disproportionately
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- Figure 19: Consumers that expect not to spend on the home over the next month, by household income, 16th-23rd April 2020
- How a COVID-19 recession will reshape the Major Domestic Appliances market
- A slow housing market, and paused renovations
- Unemployment will hit discretionary spending
- A renewed focus on value
- Innovation needs to focus on longer-term cost savings
- The need for flexibility could make a case for subscription services
- COVID-19: Market context
Issues and Insights
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- Sustainability considerations are changing the way that people shop
- The facts
- The implications
The Market – What You Need to Know
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- Sales recover momentum in 2019, but set to drop 11% in 2020
- Market segmentation remains unchanged in 2019
- Online retailers make gains
- Price deflation encourages purchasing, but uncertainty lies ahead in the housing market
Market Size and Forecast
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- Sales recover momentum in 2019
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- Figure 20: Total UK value sales of major domestic appliances, 2014-19
- Outlook in light of COVID-19
- COVID-19 will see sales fall sharply in 2020 …
- … but there will be some opportunities for growth
- The market should recover momentum in 2021
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- Figure 21: Forecast of UK value sales of major domestic appliances (adjusted for COVID-19), 2014-24
- Figure 22: Forecast of UK value sales of major domestic appliances (adjusted for COVID-19), 2014-24
- Pre-COVID-19 forecast highlights the crisis’s impact on sales
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- Figure 23: Forecast of UK value sales of major domestic appliances (pre-COVID-19 forecast), 2014-24
- Figure 24: Forecast of UK value sales of major domestic appliances (pre-COVID-19 forecast), 2014-24
- Forecast methodology
Market Segmentation
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- Market share remains stable in 2019
- Growth of built-in appliances
- COVID-19 set to bring change for 2020
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- Figure 25: Estimated market segmentation for major domestic appliances, 2019
Channels to Market
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- Online makes gains in the specialist sector …
- … and more broadly
- Department stores endure a difficult year
- Supermarket sales fall in the first full year of Tesco Direct’s closure
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- Figure 26: Channels to market, 2015-19
Market Drivers
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- The housing market has stabilised in recent years, but huge uncertainty lies ahead
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- Figure 27: Quarterly UK residential property transactions, Q1 2015-Q4 2019
- A rising proportion of homeowners in England
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- Figure 28: English households, by tenure, 2012-18
- Price deflation should encourage purchasing
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- Figure 29: Annual rate of Inflation, CPIH and major appliances and small electric goods, June 2019-February 2020
- Spending on kitchens grew in 2019
- Consumers remain willing to take on credit
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- Figure 30: Consumer credit excluding student loans, March 2018-February 2020
Companies and Brands – What You Need to Know
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- Brands innovate for the future
- A heightened focus on smart tech
- Total advertising spend down 9.2% year-on-year in 2019
- Samsung and Bosch: two standout brands
Competitive Strategies
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- Administration and rebranding at the top
- A new approach to the physical sector
- Miele launches ‘experience stores’
- Neff AR pop-up events
- Brands look to mobile apps
- Augmented reality apps
- Hotpoint interactive AR appliance shopping experience
- Retailer mobile apps
- Major appliances for newer living spaces
- Fridge freezers for compact kitchens
- Digital communal launderette
- Counter-top dishwashers
Launch Activity and Innovation
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- Connected major domestic appliances
- Smart fridges that use AI to suggest recipes and create weekly meal plans
- AI takes the guesswork out of laundry
- Whirlpool’s first connected dishwasher
- Candy launches its first fridge freezer to feature smart food management technology
- Miele introduces internet connected appliances across its built-in ranges
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- Figure 31: Miele connected dishwasher, 2019
- Minimal food waste
- Long-lasting food freshness
- Voice-controlled appliances
- Connected self-dosing dishwasher
- Voice-command washing machine and oven
- Microwave oven which can pair with Amazon Alexa and Google Home
- Game-changing oven
- Samsung’s new home laundry system
Advertising and Marketing Activity
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- Adspend on major domestic appliances advertising down 9.2% year-on-year in 2019
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- Figure 32: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2015-19
- Whirlpool is the sector’s biggest advertising spender
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- Figure 33: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by advertiser, 2015-19
- Three brands account for over half of the sector’s total spend
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- Figure 34: Share of total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2019
- Majority of advertising spend channelled through TV
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- Figure 35: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by media type, 2019
- Advertising and marketing campaigns
- Whirlpool product recall campaign
- Beko AquaTech washing machine advert featuring FC Barcelona players
- Hotpoint campaign to build awareness of its ActiveCare range of laundry appliances
- Indesit #DoItTogether campaign to promote gender equality
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 36: Attitudes towards and usage of selected brands, March 2020
- Key brand metrics
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- Figure 37: Key metrics for selected brands, March 2020
- Brand attitudes: Siemens, Bosch and Zanussi stand out for high quality
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- Figure 38: Attitudes, by brand, March 2020
- Brand personality: Hotpoint and Beko offer accessibility
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- Figure 39: Brand personality – macro image, March 2020
- Samsung is stylish, innovative and highly desirable
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- Figure 40: Brand personality – micro image, March 2020
- Brand analysis
- Samsung is the stand-out brand
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- Figure 41: User profile of Samsung, March 2020
- Bosch is a prestigious, consistently high quality brand worth paying more for
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- Figure 42: User profile of Bosch, March 2020
- Beko is the perfect entry-point brand, championed for value and accessibility
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- Figure 43: User profile of Beko, March 2020
- Hotpoint is a well-trusted, value favourite
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- Figure 44: User profile of Hotpoint, March 2020
- Siemens is a prestigious brand that offers consistent high quality
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- Figure 45: User profile of Siemens, March 2020
- Indesit offers good value but lacks a point of differentiation
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- Figure 46: User profile of Indesit, March 2020
The Consumer – What You Need to Know
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- 67% of consumers have purchased a major domestic appliance in the past three years
- Beko tops mass-market purchases, but brand choice varies by product
- Online’s popularity will surge in 2020 amid the COVID-19 outbreak
- Breakdowns trigger the majority of purchases
- Price and quality considerations underpin brand choice
- The store remains indispensable, but must increase in-store engagement
- Sustainability considerations are changing the way that people shop
- Interest in new innovations is rife in the market
What They Buy
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- Two in three have purchased in the past three years
- One third have purchased a washing machine
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- Figure 47: Purchases in the past 3 years, February 2020
- Younger shoppers spearhead recent purchases
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- Figure 48: Purchases in the past 3 years, by age, February 2020
- 40% bought more than one appliance in the past three years
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- Figure 49: Repertoire of purchases in the past 3 years, February 2020
Brands Purchased
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- Beko tops mass-market purchases
- Hotpoint the most popular laundry appliance brand
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- Figure 50: What brand they purchased, washing/tumble drying, February 2020
- Beko tops choice in fridges/freezers
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- Figure 51: What brand they purchased, fridge/freezer, February 2020
- The cookers market is fragmented
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- Figure 52: What brand they purchased, cookers, February 2020
- Bosch the outright leader for dishwashers
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- Figure 53: What brand they purchased, dishwashers, February 2020
Channel of Purchase
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- Online is the most popular channel for purchasing appliances
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- Figure 54: Channel of purchase, net, February 2020
- The channel will surge in 2020 amid the COVID-19 outbreak
- Consumers look to the security of ordering via computer …
- … but younger shoppers are driving the role of the smartphone
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- Figure 55: Channel of purchase, February 2020
Triggers to Purchase
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- Breakdowns trigger the majority of purchases
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- Figure 56: Triggers to purchase, February 2020
- Disparate demand among younger and older parents
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- Figure 57: Triggers to purchase, by age of children, February 2020
- Laundry appliance purchases are driven by necessity
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- Figure 58: Triggers to purchase, laundry appliance purchasers, compared to the average, February 2020
- Fridges/Freezers are often upgraded before breakdown
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- Figure 59: Triggers to purchase, fridge/freezer appliance purchasers, compared to the average, February 2020
- A broad variety of drivers in cooker sales
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- Figure 60: Triggers to purchase, cooking appliance purchasers, compared to the average, February 2020
- House movers drive dishwasher sales
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- Figure 61: Triggers to purchase, dishwasher appliance purchasers, compared to the average, February 2020
Purchase Drivers
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- Price and quality considerations underpin brand choice
- Environmental credentials increasingly under the spotlight
- Innovations are an important differentiator for brands
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- Figure 62: Key purchase drivers, February 2020
- Priorities differ across brand shoppers
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- Figure 63: Key purchase drivers, by brand, February 2020
Shopping Behaviours for Major Domestic Appliances
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- The store remains indispensable for many
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- Figure 64: Behaviours in the major domestic appliances market, February 2020
- But they must keep consumers engaged while in-store
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- Figure 65: Agreement with behaviours in the major domestic appliances market, by channel of purchase, February 2020
- Many younger consumers rely on credit and sales events
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- Figure 66: Agreement with behaviours in the major domestic appliances market, by age, February 2020
Environmental Concerns
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- Sustainability considerations are changing the way that people shop
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- Figure 67: Environmental concerns, February 2020
- Different approaches across age bands
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- Figure 68: Agreement with environmental concerns, by age, February 2020
Attitudes towards Major Domestic Appliances
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- Screen size limits mobile purchasing …
- … but this could be driven by tech innovation in the sphere
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- Figure 69: Attitudes towards major domestic appliances, February 2020
- The opportunity for an appliance subscription service
- Younger consumers spearhead the interest in smart technologies
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- Figure 70: Agreement with attitudes towards major domestic appliances, by age, February 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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