Haier

Building a new normal with value additions

Building a new normal with value additions

There has been an increase in consumer interest in smart appliances and those dedicated to health and hygiene, whose value is now more than ever appreciated.

Despite the critical situation of the starting months of this year, home appliances grew during the first half, especially in the developed countries, where the lockdown created more needs for home evolved devices. According to GfK, the major domestic appliances (MDA) market, instead, was almost stable at –2 percent in Europe, while in Asian countries it grew by +2.7 percent uptick.

After the acute phase of the emergency and the related restrictions, the home appliance world also looks ahead and begins to build a new normality in a context characterized by strong uncertainty. The completely out of the ordinary situation, that companies have had to face, brought the attention on the possible tools that can be adopted to manage such exceptional circumstances, starting from digital technologies to support remote work, avoiding unnecessary movements thanks to the use of videoconferencing and maintaining contact with suppliers and customers.

In recent months there have been several discussions on how the pandemic and the consequent lockdown period has changed consumer habits, leading to new trends. How did this impact the appliances sector? Whatever the appliance, the overall trends driving choice for consumers of smart performance, simplification, health hygiene, and borderless shopping have become more relevant than ever.

A clear demand shift from want to need is evident from the onset of the pandemic. As people stockpiled food, the immediate need for more storage capacity boosted sales of refrigerators. Once the stockpiling moderated, next came a strong drive for food preparation appliances. This characterizes the adapt phase. The trend to eat at home continued strongly post-lockdown, in what GfK terms the Revenge Shopping phase.

While COVID-19 sent shockwaves reverberating through the whole industry, from consumers to supply chain, the final outcome of a strong in-home focus is leading to an unexpected strong and fast recovery of markets post-lockdowns. This Revenge Shopping phenomenon was particularly strong for home appliances as consumers proved happy to invest in solutions that supported them and saved them time in a busy work- and schooling-from-home environment.

The need for healthy air is combined with the desire for psychophysical well-being. In addition, to meet the needs of consumers, these products combine advanced purification technologies, aesthetic refinement and, in some cases, also connectivity, a feature that is predictably increasingly appreciated given that the COVID-19 emergency has led to greater familiarity with digital technologies.

Appliance manufacturers are betting that consumers are looking for additional technology features in products for their homes. Wireless control and smart technology are the primary drivers of product development these days. Five years ago, the reasons for having smart appliances were less clear, but brands are now seeing real advantages and opportunities for creating efficiencies for families.

With the ability to operate and monitor appliances via a mobile device or voice assistant, users are not confined to a space, such as the kitchen, and can do more with their time. As a result, almost all major appliance companies carry a variety of connected products in their lines.

For example, many manufacturers now offer artificial intelligence and cameras in refrigerators to track food inventory and make recipe recommendations based on the fridge’s contents, which helps with meal planning. Cameras in ovens allow users to monitor baking progress from a mobile device.

This trend is growing. The Association of Home Appliance Manufacturers says that 10 percent of homes will own a smart appliance this year, and market research and consulting company Futuresource Consulting forecasts that the category will grow at a 36 percent CAGR to 2023. Manufacturers are betting that smaller technology upgrades to products will drive appliance sales as well. 

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