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Major Domestic Appliances - UK - April 2017

Published By :

Mintel

Published Date : Apr 2017

Category :

Consumer Electronics

No. of Pages : N/A

Few consumer sectors enjoy the pace of innovation and change that characterises the market for major domestic appliances. Better functionality, better energy efficiency and water savings rank among the advances in recent years and this has transformed choices. But arguably the greatest change is poised to take off as suppliers develop smart connected appliances. Consumers are most interested in developments that could save them money on utility bills or call-out charges for repairs, but there is a hurdle to overcome, as most connected appliances command a hefty price premium which consumers appear reluctant to pay for

Table of Content

OVERVIEW
What you need to know
Products covered in this Report
Definitions

EXECUTIVE SUMMARY
The market
Positive outlook for sales of major domestic appliances
Figure 1: Consumer spending on major domestic appliances, 2011-21
Laundry appliances account for 38% of the market
Figure 2: Market segmentation, major domestic appliances, share by value, 2016 (est)
More housing and an active housing market drive demand
Companies and brands
Currys is the market leader
Figure 3: Major domestic appliances, channels to market, by value, 2016 (est)
Takeover of Indesit by Whirlpool created an industry giant
Figure 4: Manufacturer shares of major domestic appliances, by value, 2014 and 2016 (est)
Samsung’s well-known brand gives it a head start
Figure 5: Attitudes towards and usage of selected appliance brands, January 2017
Innovation includes better functionality as well as connectivity
The consumer
Many appliances are a household essential
Laundry appliances purchased most often
Figure 6: Percentage of major domestic appliances bought in the last three years, February 2017
Currys is the leading retailer for major domestic appliances
Figure 7: Retailers used for major domestic appliances, February 2017
Online shopping ahead of buying in-store
Shoppers drive a hard bargain
Figure 8: Factors influencing choice of retailer for major domestic appliances, February 2017
Internet shopping plays a massive role in the customer journey
Figure 9: Customer journey for major domestic appliances, February 2017
Smart appliances that offer savings are most interesting to shoppers
Figure 10: Interest in features of major domestic appliances, February 2017
What we think

ISSUES AND INSIGHTS
Which features of smart appliances capture the attention of shoppers?
The facts
The implications
Are physical stores redundant now that online shopping has been adopted by so many?
The facts
The implications
What next for design of major domestic appliances?
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Spending to grow by 28% in five years
Market picked up momentum in 2015-16
Tumble dryer sales up 42.3% in five years
Smart connected appliances remain a small niche
Currys, AO.com and Argos are the top three retailers for major domestic appliances
Argos’s acquisition by Sainsbury’s will change the shape of the business
More than half of major domestic appliance sales are now online
More households leading to market growth

MARKET SIZE AND FORECAST
Market to grow by 28% in five years
Figure 11: Consumer spending on major domestic appliances, 2011-21
Forecast methodology
Market picked up momentum in 2015-16
Figure 12: Consumer spending on major domestic appliances, 2011-16
The impact of the EU referendum vote
Spending on appliances has been dented by previous slowdowns

MARKET SEGMENTATION
Laundry appliances make up the largest market segment
Figure 13: Market segmentation, major domestic appliances, 2016 (est)
Tumble dryers have outpaced the market
Figure 14: Market segments for major domestic appliances, 2011-21 (est)
Growth of the built-in market
Smart appliances are a small market niche

CHANNELS TO MARKET
Currys is the market leader
AO.com has gained ground
Argos’s acquisition by Sainsbury’s will change the shape of the business
DIY chains have an opportunity to grow share
John Lewis continues its outstanding performance
Figure 15: Major domestic appliances, channels to market, by value, 2016 (est)
Online sales surge ahead
Figure 16: Major domestic appliances, online sales as a percentage of consumer spending on major domestic appliances, 2016 (est)

MARKET DRIVERS
Household numbers will grow by 4.7% in the five years to 2021
Figure 17: UK households, by size, 2011-21
Replacement sales gain from previous housing booms
Steady housing sales help boost demand for appliances
Figure 18: Residential property transactions, UK, 2005-16
Consumers positive about their finances
Figure 19: How consumers describe their finances, UK, 2009-16
Decisions based on available space
Rising energy prices will spur demand for efficient appliances
Change to energy labelling

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Whirlpool is the clear market leader
Addressing the built-in market
Many leading brands now offer smart connected appliances
Brands aim for differentiation
Innovation at the premium end of the market
Catering for smaller kitchens
Retailers opening smart home departments
Pay as you go to become mainstream
Samsung’s stands out among the brands

MARKET SHARE
Indesit/Whirlpool is the clear market leader
BSH slides back a little
Players from the Far East make their mark
Figure 20: Manufacturer shares of major domestic appliances, by value, 2014 and 2016 (est)

COMPETITIVE STRATEGIES
Addressing the built-in market
Bosch aims to chime with the needs of customers in their everyday lives
Whirlpool emphasises functionality and style
Indesit sets out to make things easier and faster
Beko is a price fighter brand, with added value
Electrolux taps into emotions
Hoover emphasises connected appliances
Aga Rangemaster focusses on range cookers
Miele is a premium brand
Major brands from the Far East have ambitious plans for the UK
LG promises a better life
Panasonic’s fridge features new technologies
Samsung elevates the fridge into a home hub
Haier’s products have ground-breaking ideas
Glen Dimplex features brand heritage
Smeg has developed iconic styling

LAUNCH ACTIVITY AND INNOVATION
Supplier innovation
Professional results at home
Figure 21: GE Appliances, monogram pizza oven, 2017
LG pitches high with its Signature range launched in the UK in 2017
Figure 22: LG Signature washing machine, 2017
Belling invests for growth
GE developing a ‘micro kitchen’ aimed at urban dwellings
Figure 23: Micro Kitchen by GE, 2017
KitchenAid’s latest innovation acts as an oven and a hob
Figure 24: Chef Sign by KitchenAid, February 2017
LG’s Styler cabinet
Figure 25: LG, Laundry Cabinet, 2017
Sharp launching major domestic appliances in the UK
Talk to your Whirlpool appliances through Alexa
Retailer innovation
Pay monthly to go mainstream at Dixons
Retailers opening smart home departments

ADVERTISING AND MARKETING ACTIVITY
Adspend jumps in 2016 in buoyant market conditions
Figure 26: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2012-16
AO.com’s advertising more than double its closest rival
Figure 27: Share of above-the-line, online display and direct mail advertising expenditure on major domestic appliances, 2016
AO.com piles on the pressure
Figure 28: Above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by advertiser, 2012-16
Television advertising accounts for over half of spending
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on major domestic appliances, by medium, 2016
Advertising and marketing campaigns
Beko positions itself as ‘the official partner of the everyday’
Currys features dreams based around technology
AO.com features great customer experience
Nielsen Ad Intel coverage

BRAND RESEARCH
Samsung’s well-known brand gives it a head start
Bosch is in a position of strength
Middle market group lacks differentiation
Did the appliance fires make a difference to perceptions of brands?
Figure 30: Attitudes towards and usage of selected appliance brands, January 2017
Key brand metrics
MDA brands are well-known but not favourites
Figure 31: Key metrics for selected appliance brands, January 2017
Bosch is innovative
Beko’s good value stands out
Samsung has a loyal following
Figure 32: Attitudes, by appliance brand, January 2017
Zanussi and Hotpoint are the most accessible brands
Figure 33: Brand personality – Macro image, January 2017
Bosch is the most sophisticated brand
Hotpoint is reliable and affordable
Beko appears risky
Figure 34: Brand personality – Micro image, January 2017
Brand analysis
Bosch has a quality image, worth paying more for
Figure 35: User profile of Bosch, January 2017
Brand analysis
Samsung is trusted and has a fun personality
Figure 36: User profile of Samsung, January 2017
Brand analysis
Hotpoint is a safe choice
Figure 37: User profile of Hotpoint, January 2017
Brand analysis
Neff is least-known, but its users are fans
Figure 38: User profile of Neff, January 2017
Brand analysis
Zanussi is accessible, with a good reputation
Figure 39: User profile of Zanussi, January 2017
Brand analysis
Indesit has good levels of awareness and usage
Figure 40: User profile of Indesit, January 2017
Brand analysis
Beko’s key strength is value
Figure 41: User profile of Beko, January 2017
Brand analysis

THE CONSUMER – WHAT YOU NEED TO KNOW
High levels of ownership illustrate that some appliances are household essentials
Laundry appliances have the highest rate of purchasing
Currys stands out as a destination retailer for major domestic appliances
More purchased online than in-store
This is a price-sensitive market place
Internet shopping plays a massive role in buying major domestic appliances
Stores retain their relevance
Interest in innovation is dominated by practical solutions

OWNERSHIP OF MAJOR DOMESTIC APPLIANCES
Washing machines, fridges and cookers are household essentials
Figure 42: Ownership of major domestic appliances, summary, February 2017
Tumble dryers must overcome negatives to increase penetration
Tumble dryers face stiff competition from cheaper ways to dry the laundry
Figure 43: Ownership of major domestic appliances, washers and dryers, February 2017
Combined fridge-freezers dominate the market
Wealthier households own side-by-side models
Figure 44: Ownership of major domestic appliances, fridges/freezers, February 2017
Dishwasher ownership has increased
Figure 45: Ownership of major domestic appliances, dishwashers, February 2015 and 2017
Built-in cookers in almost half of households
Figure 46: Ownership of major domestic appliances, cookers/ovens February 2017

PURCHASES OF MAJOR DOMESTIC APPLIANCES
Laundry appliances purchased most often
Figure 47: Percentage of major domestic appliances bought in the last three years, February 2017
Washing machine purchases dominate the laundry sector
Figure 48: Major domestic appliances owned and bought in the last three years, laundry appliances, February 2017
Fridge-freezers dominate the refrigeration market
Figure 49: Major domestic appliances owned and bought in the last three years, refrigeration appliances, February 2017
A third of dishwashers purchased are built-in models
Figure 50: Major domestic appliances owned and bought in the last three years, dishwashers, February 2017
Built-in ovens slightly ahead in the cooker market
Figure 51: Major domestic appliances owned and bought in the last three years, cookers/ovens, February 2017

RETAILERS USED FOR MAJOR DOMESTIC APPLIANCES
Currys is the leading retailer for major domestic appliances
Figure 52: Retailers used for major domestic appliances, February 2017
Narrow repertoire of retailers used
Figure 53: Retailers used for major domestic appliances, repertoire, February 2017

IN-STORE OR ONLINE SHOPPING FOR MAJOR DOMESTIC APPLIANCES
Online shopping ahead of buying in-store
Figure 54: In-store or online shopping for major domestic appliances, February 2017
In-store shoppers make a bee line for Curry’s
Currys faces stiff online challenge from AO.com

FACTORS INFLUENCING CHOICE OF RETAILER FOR MAJOR DOMESTIC APPLIANCES
Shoppers drive a hard bargain
Shoppers don’t wait until Black Friday
Reputation counts
Figure 55: Factors influencing choice of retailer for major domestic appliances, February 2017

CUSTOMER JOURNEY FOR MAJOR DOMESTIC APPLIANCES
Internet shopping plays a massive role in buying major domestic appliances
Assurance of stores
Figure 56: Customer journey for major domestic appliances, February 2017

INTEREST IN FEATURES OF MAJOR DOMESTIC APPLIANCES
Features that show tangible savings of most interest
Price resistance to appliances with connected features
Figure 57: Interest in features of major domestic appliances, February 2017
59% of people are not at all interested in connected appliances
Figure 58: Interest in features of major domestic appliances, repertoire, February 2017

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Forecast Methodology

List of Table

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