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Major Domestic Appliances - UK - April 2018

“The market for major domestic appliances has continued to grow, but at a slower rate than previous years. The replacement market remains resilient, but replacement purchases can occur unexpectedly leading consumers to prioritise price and speed of replacement, rather than taking the time to research and upgrade to the latest features.”

- Thomas Slide, Retail Analyst

This report will look at the following areas:

  • Who owns a smart appliance and who’s interested?
  • Will we still own major domestic appliances in the future?
  • Buyers need better guidance on the benefits of energy efficiency
  • What is the role of the physical store for major domestic appliances?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • The market for major domestic appliances slowed in 2017
              • Figure 1: Consumer spending on major domestic appliances, 2012-22
            • Property transactions fall 1.1%
              • Laundry appliances make up the largest segment
                • Figure 2: Market segmentation for major domestic appliances, 2017
              • Dixons Carphone the leading retailer
                • Figure 3: Major domestic appliances, channels to market, 2017
              • Companies and brands
                • Growing focus on smart and connected technology
                  • Washing machine saves time and energy
                    • Adspend declines 19.1% in 2017
                      • Samsung is the most trusted brand
                        • Figure 4: Attitudes towards and usage of selected brands, February 2018
                      • The consumer
                        • Major domestic appliances are household essentials
                          • Figure 5: Ownership of major domestic appliances, February 2018
                        • Nearly two thirds bought a new appliance in the past three years
                          • Figure 6: Purchases of major domestic appliances in the last three years, February 2018
                        • Online more popular than in-store
                          • Figure 7: How they bought the major domestic appliance purchased most recently, February 2018
                        • Breakdowns drive sales
                          • Figure 8: Reasons for buying a new major domestic appliance, February 2018
                        • Retailer websites the most popular source of information
                          • Figure 9: Sources of information used when researching which major domestic appliance to buy, February 2018
                        • Price is the most important factor for 38% of buyers
                          • Figure 10: Important factors in deciding which major domestic appliance to buy, February 2018
                        • What we think
                        • Issues and Insights

                          • Who owns a smart appliance and who’s interested?
                            • The facts
                              • The implications
                                • Will we still own major domestic appliances in the future?
                                  • The facts
                                    • The implications
                                      • Buyers need better guidance on the benefits of energy efficiency
                                        • The facts
                                          • The implications
                                            • What is the role of the physical store for major domestic appliances?
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • The market for major domestic appliances slows in 2017
                                                    • Laundry appliances make up the largest segment
                                                      • Dixons Carphone the leading retailer
                                                        • Property transactions fall 1.1%
                                                          • Consumer confidence dips but spending intentions remain strong
                                                          • Market Size and Forecast

                                                            • Slower spending on major domestic appliances
                                                              • Market forecast to grow 12.5% by 2022
                                                                • Figure 11: Consumer spending on major domestic appliances, 2012-22
                                                                • Figure 12: Consumer spending on major domestic appliances, 2012-22
                                                              • Forecast methodology
                                                              • Market Segmentation

                                                                • Laundry appliances the largest segment
                                                                  • Figure 13: Market segmentation for major domestic appliances, 2017
                                                                • Dishwashers and tumble dryers experience strongest growth
                                                                  • Figure 14: Market segmentation for major domestic appliances, 2011-17
                                                              • Channels to Market

                                                                • Dixons Carphone moves towards building a membership scheme
                                                                  • AO continues to grow
                                                                    • Amazon lacks dominance in major appliances
                                                                      • Sainsbury’s/Argos merger paying dividends
                                                                        • A turbulent year in the DIY sector
                                                                          • Figure 15: Major domestic appliances, channels to market, 2017
                                                                      • Market Drivers

                                                                        • Spending on electricals is boosted by inflation
                                                                          • Figure 16: Percentage change in consumer spending on all electrical products, 2013-17
                                                                        • Property transactions fall 1.1%
                                                                          • Figure 17: Residential property transactions over £40,000, UK, 2006-17
                                                                        • Consumer confidence declines during 2017
                                                                          • Figure 18: Consumer confidence tracker, January 2015-February 2018
                                                                        • Inflation puts a squeeze on incomes during 2017
                                                                          • Figure 19: Average weekly earnings versus CPI, January 2014-March 2018
                                                                        • Electricity prices soar in 2017
                                                                          • Figure 20: Price of utilities and overall CPIH, monthly percentage change compared to a year earlier, February 2017-March 2018
                                                                        • Increase in households should lead to growth
                                                                          • Figure 21: Household size, 2012-22
                                                                        • 42% feel repairs make more sense when money is tight
                                                                          • Figure 22: Agreement with the following statement, by age, November 2017
                                                                        • Retail credit increases 9% since 2016
                                                                        • Companies and Brands – What You Need to Know

                                                                          • Growing focus on smart and connected technology
                                                                            • Introducing metal-backed appliances to allay safety concerns
                                                                              • Washing machine saves time and energy
                                                                                • Adspend declines 19.1% in 2017
                                                                                  • Samsung is the most trusted brand
                                                                                  • Competitive Strategies

                                                                                    • Introducing metal-backed appliances to allay safety fears
                                                                                      • LG introduces Google Home-compatible appliances
                                                                                        • Bosch integrates Amazon Alexa into Home Connect range
                                                                                          • Hoover launches advertising campaign for its smart appliances
                                                                                            • Haier focuses on reducing food wastage
                                                                                              • Bosch and Siemens appliances set to carry the Quiet Mark
                                                                                                • Candy launches Simply-Fi app in the UK
                                                                                                  • Indesit unveils revamped website
                                                                                                    • Stoves expands its Mini Range collection
                                                                                                    • Launch Activity and Innovation

                                                                                                      • Fridge that can sniff out food that has expired
                                                                                                        • Sustainable fridge prototype
                                                                                                          • Figure 23: World’s first bioplastic concept fridge from Electrolux
                                                                                                        • FridgeCam gives you a snapshot of what is in your fridge wherever you are
                                                                                                          • Figure 24: FridgeCam
                                                                                                        • Washing machine saves time and energy
                                                                                                          • Figure 25: Samsung WW8800M washing machine
                                                                                                        • A washing machine that folds clothes and an on-command mobile fridge
                                                                                                          • Countertop dishwasher for small kitchens
                                                                                                            • Figure 26: Tetra countertop dishwasher
                                                                                                          • Connected domestic appliances
                                                                                                            • Whirlpool’s direct-to-the-consumer home delivery service
                                                                                                            • Advertising and Marketing Activity

                                                                                                              • Adspend declines 19.1% in 2017
                                                                                                                • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2013-17
                                                                                                              • Bosch’s share of total sector advertising spend up 25 percentage points
                                                                                                                • Figure 28: Share of above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2017
                                                                                                              • Bosch and Currys increase advertising spend in 2017
                                                                                                                • Figure 29: Above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by advertiser, 2013-17
                                                                                                              • TV attracts the highest spend, but its share is declining as advertisers switch to digital
                                                                                                                • Figure 30: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by media type, 2017
                                                                                                              • Advertising and marketing campaigns
                                                                                                                • Bosch pushes technological innovations
                                                                                                                  • Currys Lowest Price campaign
                                                                                                                    • AO.com focusing on building brand awareness
                                                                                                                      • Beko partners with sports radio station talkSPORT
                                                                                                                        • 'Hoover, that's who' national advertising campaign
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • Brand Research

                                                                                                                              • Brand map
                                                                                                                                • Figure 31: Attitudes towards and usage of selected brands, February 2018
                                                                                                                              • Key brand metrics
                                                                                                                                • Figure 32: Key metrics for selected brands, February 2018
                                                                                                                              • Brand attitudes: Beko seen as a value-focused brand
                                                                                                                                • Figure 33: Attitudes, by brand, February 2018
                                                                                                                              • Brand personality: Samsung portrays a fun image
                                                                                                                                • Figure 34: Brand personality – macro image, February 2018
                                                                                                                              • Hotpoint seen as user-friendly and affordable
                                                                                                                                • Figure 35: Brand personality – micro image, February 2018
                                                                                                                              • Brand analysis
                                                                                                                                • Samsung is the most recommended brand
                                                                                                                                  • Figure 36: User profile of Samsung, February 2018
                                                                                                                                • Bosch is viewed as innovative and reliable
                                                                                                                                  • Figure 37: User profile of Bosch, February 2018
                                                                                                                                • Hotpoint is an affordable yet trusted brand
                                                                                                                                  • Figure 38: User profile of Hotpoint, February 2018
                                                                                                                                • NEFF appeals to those with the time and money to indulge their passion
                                                                                                                                  • Figure 39: User profile of NEFF, February 2018
                                                                                                                                • Beko: the affordable choice
                                                                                                                                  • Figure 40: User profile of Beko, February 2018
                                                                                                                                • Zanussi struggles to stand out
                                                                                                                                  • Figure 41: User profile of Zanussi, February 2018
                                                                                                                                • Indesit struggles to deliver an excellent experience
                                                                                                                                  • Figure 42: User profile of Indesit, February 2018
                                                                                                                              • The Consumer – What You Need to Know

                                                                                                                                • Major domestic appliances are household essentials
                                                                                                                                  • 64% bought a new appliance in the past three years
                                                                                                                                    • Online more popular than in-store
                                                                                                                                      • Breakdowns drive sales
                                                                                                                                        • Retailer websites are the most popular source of information
                                                                                                                                          • Price is the most important factor for 38% of buyers
                                                                                                                                          • Ownership of Major Domestic Appliances

                                                                                                                                            • Major appliances are household essentials
                                                                                                                                              • Figure 43: Ownership of major domestic appliances, February 2018
                                                                                                                                            • Separate tumble dryers are most popular with families
                                                                                                                                              • Figure 44: Washer/dryer ownership, by presence of children, February 2018
                                                                                                                                            • Built-in electric ovens the most popular cooking appliance
                                                                                                                                              • Figure 45: Ownership of cooking appliances, by age and affluence, February 2018
                                                                                                                                            • Half of households own at least five major domestic appliances
                                                                                                                                              • Figure 46: Repertoire analysis of major domestic appliance ownership, February 2018
                                                                                                                                          • Purchasing of Major Domestic Appliances

                                                                                                                                            • Laundry appliances are most purchased
                                                                                                                                              • Combined fridge-freezers dominate refrigeration sales
                                                                                                                                                • Figure 47: Purchases of major domestic appliances in the last three years, February 2018
                                                                                                                                              • 37% purchased multiple appliances in the past three years
                                                                                                                                                • Figure 48: Repertoire analysis of major domestic appliances purchased in the past three years, February 2018
                                                                                                                                              • Major domestic appliance purchased most recently
                                                                                                                                                • Figure 49: Major domestic appliance purchased most recently (net), February 2018
                                                                                                                                              • Plans of non-purchasing owners
                                                                                                                                                  • Figure 50: Plans for buying a new major domestic appliance, February 2018
                                                                                                                                              • How They Shopped

                                                                                                                                                • Over half purchased online
                                                                                                                                                  • Figure 51: How they bought the major domestic appliance purchased most recently, February 2018
                                                                                                                                                • Purchase channel differs by reason for making a purchase
                                                                                                                                                  • Figure 52: How they shopped for major domestic appliances, by reasons for buying a new appliance, February 2018
                                                                                                                                                • In-store shoppers prioritise design and ease of use
                                                                                                                                                  • Figure 53: Relative difference in importance of factors, by how they shopped for major domestic appliances, February 2018
                                                                                                                                              • Reasons for Buying a Major Domestic Appliance

                                                                                                                                                • Replacements drive sales of major domestic appliances
                                                                                                                                                  • Consumers want efficient appliances
                                                                                                                                                    • Figure 54: Reasons for buying a new major domestic appliance, February 2018
                                                                                                                                                  • Laundry appliance purchases most likely to be driven by breakdowns
                                                                                                                                                    • Figure 55: Reasons for buying a new laundry appliance, compared to the average for all appliances, February 2018
                                                                                                                                                  • Parents seeking more capacity help refrigeration sales
                                                                                                                                                    • Figure 56: Reasons for buying a refrigeration appliance, compared to the average for all appliances, February 2018
                                                                                                                                                  • Dishwasher purchases most likely to be driven by first-time purchases
                                                                                                                                                    • Figure 57: Reasons for buying a new dishwasher, compared to the average for all appliances, February 2018
                                                                                                                                                  • Purchases of cooking appliances driven by room remodelling
                                                                                                                                                    • Figure 58: Reasons for buying a new cooking appliance, compared to the average for all appliances, February 2018
                                                                                                                                                • Sources of Information Used

                                                                                                                                                  • Retailer websites the main source of information
                                                                                                                                                    • The importance of user reviews
                                                                                                                                                      • Figure 59: Sources of information used when researching which major domestic appliance to buy, February 2018
                                                                                                                                                    • Older shoppers continue to rely on in-store displays
                                                                                                                                                      • Figure 60: Sources of information used when researching which major domestic appliance to buy, by age and socio-economic group, February 2018
                                                                                                                                                    • Those with safety concerns use most sources for research
                                                                                                                                                      • Figure 61: Average number of sources used for research, by reasons for buying a major domestic appliance, February 2018
                                                                                                                                                    • Before buying people expect to use more sources of information
                                                                                                                                                        • Figure 62: Sources of information expected to be used and actually used when deciding which major domestic appliance to purchase, February 2018
                                                                                                                                                    • Important Factors in Deciding What to Buy

                                                                                                                                                      • Distress purchases mean price is a critical factor for many
                                                                                                                                                        • Ease of use important for almost a third
                                                                                                                                                          • Figure 63: Important factors in deciding which major domestic appliance to buy, February 2018
                                                                                                                                                        • Wealthy dads are most interested in innovative features
                                                                                                                                                          • Figure 64: Important factors in deciding which major domestic appliance to buy, February 2018
                                                                                                                                                        • Capacity and design are important when buying refrigeration appliances
                                                                                                                                                          • Ease of use and design are most important for cooking appliances
                                                                                                                                                            • Innovative features most likely to sell a laundry appliances
                                                                                                                                                              • Figure 65: Important factors in deciding what to purchase, by major domestic appliance purchased most recently, February 2018
                                                                                                                                                            • Running costs fall in importance during the purchase process
                                                                                                                                                              • Figure 66: Difference in priorities between those who have purchased a major domestic appliance in the past three years, and those who haven’t, February 2018
                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                              • Abbreviations
                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                  • Forecast methodology

                                                                                                                                                                  Major Domestic Appliances - UK - April 2018

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