Washers and Dryers - US - July 2008

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
New homeowners, new parents the primary target
Going “green”
Young and the wealthy seeking style and new features
Slowdown in housing market impacting sales
Washers larger segment, dryers faster growing
Sears loses share to Home Depot and Lowe’s
Younger homeowners, Baby Boomers and multi-ethnic population
Consolidated supply structure, led by Whirlpool
Well-established brands enter the Internet age
A gamut of innovations
Consumer findings
The purchase process
Attitudes toward product features
Findings by race/ethnicity
INSIGHTS AND OPPORTUNITIES
Targeting buyers, movers, and renovators
Figure 1: Purchase of appliance in the past 12 months, by changes in residence, Jan-Nov 2007
Moms—and those expecting—warrant focus
Figure 2: Purchases in the past 12 months, by selected demographics and life events, Jan-Nov 2007
Greening appliances
Ramp up marketing of combination machines
Style + economy = brand differentiation
Innovations important to young and high-income
Figure 3: Willingness to pay more for a machine that integrates various added features, by age May 2008
Figure 4: Willing to pay more for a machine that integrates various added features, by household income, May 2008
FAST FORWARD TRENDS
Third place—a place outside the home and office to relax
Opportunities for branding in the retail clothes cleaning environment
Greener and greener—as the green movement mainstreams, alpha-greens seek ways to stay ahead of the curve
Use of ultraviolet light and free-radical oxygen to clean clothes
Heating of fluids to reduce dryer’s energy consumption
MARKET SIZE AND FORECAST
Key points
Mature market shows fairly strong growth
Sales have tracked the boom and bust of the housing market
2007 and 2008 sales buffered by replacement and high-end sales
Sales and shipments
Figure 5: Total U.S. sales and forecast of washers and dryers at current prices, 2003-11
Figure 6: Total U.S. sales and forecast of washers and dryers at inflation adjusted prices, 2003-11
Figure 7: Manufacturer shipments of laundry appliances, 2003-08
COMPETITIVE CONTEXT
Key points
Laundromats serve urban renters
Laundromats enhancing appeal to eco-conscious consumers
Dry cleaners offer limited cleaning and pressing competition
SEGMENT PERFORMANCE
Key points
Washers comprise largest segment, dryers faster growing
From 2006-08, dryers grow at slightly higher rate
Figure 8: U.S. sales and forecast of laundry appliances at current prices, by segment, 2003-13
Figure 9: U.S. sales of laundry appliances, by segment, 2006 and 2008
SEGMENT PERFORMANCE—WASHERS
Key points
Sales growth has slowed since 2006, but prices have increased
Innovation driving high-end sales
Front-load machines show strong growth
Figure 10: U.S. sales and forecast of washers, in inflation-adjusted prices, 2003-11
Figure 11: U.S. sales and forecast of washers, in inflation-adjusted prices, 2003-11
Figure 12: Factory unit shipments of washers, 2003-08
SEGMENT PERFORMANCE—DRYERS
Key points
Growth tapered off in 2007
Figure 13: U.S. sales and forecast of dryers at constant prices, 2003-11
Figure 14: U.S. sales and forecast of dryers at inflation-ajdusted prices, 2003-13
Figure 15: Factory unit shipments of dryers, 2003-08
Gas vs. electric
Figure 16: U.S. shipments of gas and electric dryers, 2006 and 2008
Figure 17: Factory unit shipments of electric dryers, 2003-08
Figure 18: Factory unit shipments of gas dryers, 2003-08
RETAIL CHANNELS
Key points
Figure 19: U.S. sales of laundry appliances, by retail channel, 2006-07
Lowe’s expands its position; Sears loses market share
Figure 20: Sales of major home appliances by top appliance retailers, 2005-07
RETAIL CHANNELS—APPLIANCE AND SPECIALTY STORES
Key points
Below average sales growth every year from 2003-07
Figure 21: U.S. sales of laundry appliances at electronic/appliance stores, 2003-07
Sears considering selling Kenmore through other retailers
Best Buy educates sales associates on environmental issues
RETAIL CHANNELS—HOME CENTERS, HARDWARE STORES, BUILDING SUPPLY STORES
Key points
Segment gaining share every year
Figure 22: U.S. sales of laundry appliances at home centers/hardware/building supply stores, 2003-07
Lowe’s continues to post growth in appliance category
Home Depot focusing on high-end, e-tailing and Eco-options
RETAIL CHANNELS—OTHER
Key points
Sales decline in “other” retail channels
Figure 23: U.S. sales of laundry appliances at other retailers, 2003-07
MARKET DRIVERS: GOING GREEN
Green living fuels demand for environmentally-friendly appliances
Green appliances a part of a broader “green” retailer approach
Growth of green homes
Government certification programs for energy efficient appliances
State and local promotions of energy efficient appliances
MARKET DRIVERS: THE HOUSING MARKET
Homeowners twice as likely to own laundry appliances
Figure 24: Ownership of washers and dryers, by home ownership, Jan-Nov 2007
Buying new home, moving and remodeling drive appliance purchase
New and existing home sales dropped sharply in 2006 and 2007
Gloomy housing prognosis through 2008
Figure 25: Sales of new and existing homes, 2002-07
Home renovations fell in 2007
Figure 26: Expenditures for residential repairs and maintenance, and improvements, 2002-07
DEMOGRAPHIC DRIVERS
Limited differences in purchases by age
Figure 27: Purchase of appliance in the past 12 months, by age, Jan-nov 2007
Figure 28: Population aged 18 or older, by age group, 2003-13
A growing multi-ethnic population
Figure 29: Population by race and Hispanic origin, 2003-13
Growth in high-end due to increase in high-income households
Figure 30: Distribution of households, by income (current dollars), 1999 and 2006
Figure 31: Purchase in the past 12 months, by household income, Jan-Nov 2007
Life events propel purchases
LEADING COMPANIES
Key points
Three tiered pricing with economical, mass market and premium lines
Whirlpool Corporation (Whirlpool, Maytag, Amana)
General Electric (GE)
Electrolux (Frigidaire)
LG Electronics
BRAND QUALITIES
Whirlpool (Whirlpool, Maytag, Amana)
Whirlpool
Maytag
Amana
Sears (Kenmore)
General Electric (GE)
Electrolux (Frigidaire, Electrolux)
LG Electronics (LG)
INNOVATION AND INNOVATORS
Energy and water efficiency
Use of steam for efficiency, wrinkle reduction
Bacteria-killing features
Anti-allergenic features
Remote monitoring and communication between machines
Capacity
Stain removal
Detergent management
Reduced noise and vibration
Temperature, water level sensors and other indicators
Color and styling
ADVERTISING AND PROMOTION
Key points
Limited brand loyalty = opportunity
Overall advertising expenditures stagnate or fall in 2007
Figure 32: Media expenditures of major appliance brands on ads for major appliances, 2005-07
Whirlpool (Whirlpool and Maytag)
Whirlpool
Figure 33: Whirlpool—Duet Swirling sea animals, 2008
Figure 34: Whirlpool—Duet steam dryer, 2008
Maytag
Figure 35: MAYTAG—centennial washer/dryer, 2008
Figure 36: MAYTAG—bravo dryer, 2008
Figure 37: MAYTAG—epic washer-dryer, 2008
GE
Kenmore (Sears)
LG
Figure 38: LG—Steam Washing, 2008
Electrolux (Frigidaire, Electrolux)
Frigidaire
Electrolux
OWNERSHIP AND FREQUENCY OF PURCHASE
Key points
Ownership rises with age and household income
Figure 39: Ownership of washers and dryers, by household income, Jan-Nov 2007
Figure 40: Ownership of washers and dryers, by age, Jan-Nov 2007
Online, young and high-income respondents bought washers more recently
Figure 41: Age of current washer or dryer, May 2008
Figure 42: Age of current washer, by household income, May 2008
Figure 43: Age of current washer, by age, May 2008
Younger respondents are planning to buy new appliances
Figure 44: Intended time of next washer purchase, by age, May 2008
SPENDING, ACQUISITION AND RETAIL CONSIDERATIONS
Key points
Women are primary buyers; retail environment counts
Figure 45: Spending on and acquisiton of washers, by gender, May 2008
Respondents of all household incomes seek a deal
Figure 46: Spending on and acquisiton of washers, by household income, May 2008
Household income considerations shape buying new appliances, replacing as a pair
Figure 47: Other attitudes towards replacement of machines, by Household income, May 2008
Economically priced machines important for younger consumer base
Figure 48: Other attitudes towards replacement of machines, by Age, May 2008
Warranty, delivery and installation
Figure 49: Retailer and supplier extras checked or bought, by household income, May 2008
Figure 50: Retailer and supplier extras checked or bought, by age, May 2008
MARKETING: INTERNET AND IN-STORE ARE KEY
Key points
Sources of information
Figure 51: Sources of information when purchasing washer/dryer, by gender, May 2008
Figure 52: Sources of information when purchasing washer/dryer, by age, May 2008
Figure 53: Sources of information when purchasing washer/dryer, by household income, May 2008
ATTITUDES AND MOTIVATIONS
Key points
Replacement is the major reason for buying new appliances
Figure 54: Reasons to buy a new washer or dryer, by household income, May 2008
Younger respondents are major first time buyers
Figure 55: Reasons to buy a new washer or dryer, by age, May 2008
Willingness to pay for ‘made in America’, front-loading and other design features
Figure 56: Features willing to pay more for–part i, May 2008
Willingness to pay for quiet running, energy efficiency, special wash cycles
Figure 57: Features willing to pay more for–part ii, May 2008
Front-loading machines still rule, spin cycles important
Figure 58: Interest in functions and functionality, by household income, May 2008
Figure 59: Interest in a simple machine, by Age, May 2008
Attitudes toward style and appearance
Figure 60: Cares about appliance appearance, by household income, May 2008
Figure 61: Attitudes towards appearance and style, by age, May 2008
Figure 62: Attitudes towards appearance and style, by household income, May 2008
Attitudes towards brands
Figure 63: Attitudes towards brands, by age, May 2008
RACE AND ETHNICITY
Key points
Homeownership and age lead to lower ownership levels
Figure 64: Ownership of washers and dryers, by race/race/ethnicity, Jan-Nov 2007
Asians and Hispanics actively acquiring new appliances
Figure 65: Recent purchase of washers and dryers, by race/ethnicity, Jan-Nov 2007
Figure 66: Age of current washer, by race/ethnicity, May 2008
Figure 67: Intended time of next washer purchase, by race/ethnicity, May 2008
Motivations and attitudes among multi-ethnic respondents
Figure 68: Reasons to buy a new washer or dryer, by race/ethnicity, May 2008
Figure 69: Interest in a simple machine, by race/ethnicity, May 2008
Figure 70: Attitudes towards appearance and style, by race/ethnicity, May 2008
Figure 71: Attitudes towards brands, by race/ethnicity, May 2008
CLUSTER ANALYSIS
Key points
Free lunchers
Pay-to-players
Back to basics
Cluster characteristics
Figure 72: Clusters, May 2008
Figure 73: Interest in additional features, by clusters, May 2008
Figure 74: Attitudes and behavior in most recent purchase, by clusters, May 2008
Figure 75: Attitudes, by clusters, May 2008
Cluster demographics
Figure 76: Clusters by age, May 2008
Figure 77: Clusters by household income, May 2008
Figure 78: Clusters by race/ethnicity, May 2008
Methodology
CUSTOM CONSUMER GROUPS: MOMS
Key points
Ownership, Age of Machine, Intention to Purchase
Figure 79: Ownership of washers and dryers, for moms and women without children, May 2008
Figure 80: Age of current washer, for moms and women without children, May 2008
Intent to purchase
Figure 81: Intended time of next purchase, for moms and women without children, May 2008
Figure 82: Other attitudes towards replacement of machines, for moms and women without children, May 2008
Sources of information
Figure 83: Sources of information when purchasing washer/dryer, for moms and women without children, May 2008
Interest in additional features
Figure 84: Features willing to pay more for, May 2008
Attitudes towards styles, appearance and brand
Figure 85: Attitudes towards appearance and style, by age, May 2008
Moms a little more open on choice of brands
Figure 86: Attitudes towards brands, for moms and women without children, May 2008
APPENDIX: AGE OF DRYERS
Figure 87: Age of current dryer, by household income, May 2008
Figure 88: Age of current dryer, by age, May 2008