Suppliers are all taking different approaches to the dishwashing category but will the constant threat of price erosion derail their plans?
Before talking about dishwashing, let me share a story from my university days. A friend of mine was involved in student politics, specifically in the Young Labor Party. Frustrated at how needlessly political the campus had become, he told me that, “the Labor Party has become so splintered that every member is now his own faction”.
(That was 10 years ago and it is safe to say the Labor Party hasn’t improved much since.)
The reason I recount this witticism is that while researching this Dishwashing Feature, I was struck by just how diverse the thinking is by the leading industry players. After speaking to almost 20 brands, it become clear there is no uniform approach to the market, no feature set concentration or trend initiative from the leading players. All these brands have their own unique sense of purpose from manufacturing and marketing through to distribution and sales. There is no dishwashing industry: just a collection of individual dishwashing factions.
The ‘policies’ of these factions include catering to newfangled crockery (ASKO), a move to 5-Star-plus WELS rated models (Blanco), full integration into cabinetry (De’Longhi), noise reduction (Electrolux), convenient placement in the kitchen (or ‘distributed dishwashing’; Fisher & Paykel) and small sizes for apartment living (Haier). Even some of the most fundamental attributes like appearance (LG); performance (Miele) and uniformity (ILVE) are being extrapolated into brand ideals in this category.
With so much choice and diversity in the market it is unsurprising that the more ambitious suppliers are creating tiered ranges to target an eclectic range of customers. In one of the more amusing quotations published regarding dishwashing, Smeg national marketing manager Jimmy Kalotheos explains the benefits of the Italian company’s 5-tier approach.
“If your customer asks for the fastest dishwasher in the world, well, that would be a Smeg. If your customer asks for the most water efficient dishwasher in the world, well, that would be a Smeg. If your customer asks for a brand that has a world class heritage in the highly specialised food services dishwashing arena, well, that would be Smeg!” he said.
Smeg’s five dishwasher tiers comprise its Semi Pro range offering a 16-minute superfast wash cycle; its Australian-first 6-Star WELS rated machines that only use 9.8 litres of water in a standard wash; the 314 Series of freestanding models; the 214 Series of affordable 5-Star WELS units; and the 1960s retro styled FAB collection in black, red and cream.
“Smeg has celebrated its most successful year in dishwashing since entering the Australian market more than 27 years ago,” continued Kalotheos. “With a number of world firsts over the past 12 months, Smeg believes it is in a position of unprecedented strength in the highly competitive dishwasher market.”
Michael Sultana, senior product manager for Blanco, said that dishwasher technology and design was rapidly evolving, GfK sales data clearly showed where the market was moving to.
“The most prominent trends that have been shaping the dishwasher market is the rise in both energy and water efficient units,” he said. “Consumers are now becoming more aware of the importance of high energy and water efficient units and that trend is reflected in the GfK figures over the last three years.”
While broadly agreeing with this point, Louise Paynter from Miele stressed that reliability and design could not be ignored.
“Australian consumers have become more discerning in their choice of machine as superior performance, simplicity, timeless design and longevity become key influencers. Even more important to consumers today is efficiency, they are looking for products that save time, money and valuable resources as energy costs are expected to further increase over the coming years.”
ASKO has been a dishwasher specialist in Australia for over 40 years and it has always prided itself on water and energy efficiency, reported GM of sales Peter Smith. In addition to these attributes, the Swedish brand is latching on to a couple of new consumer trends:
“We see the growing trend of crockery getting larger and of obscure shapes, such as flower vases, baking trays or cutting boards. We also have seen the importance of catering for growing families and this has lead us to design two different dishwasher heights — 82 centimetres and 86 centimetres — our XXL dishwashers,” he said, highlighting ASKO’s new models featuring hidden controls.
The subject of hidden controls leads us to integration. Dishwashers that can sit flush in the cabinetry, seamlessly camouflaged in the aesthetics of the kitchen is a growth area, according to De’Longhi category manager for major appliances Helen Finlayson.
“During 2014 we will expand into the fully integrated market segment; this is where we see some opportunity for growth,” she said. “There is a trend to integrate appliances into the kitchen, but most consumers would assume that this is a very expensive option and historically it has been. Our new fully integrated models due late 2014 will discount that theory.”
De’Longhi is also providing an option of a black and white glass doors to give the customer a choice in appearance.
“On one hand, you have the consumers that prefer the clean lines best achieved with integrated products, and on the other hand, you have the consumers that want to tap into the latest in kitchen designs including materials and finishes.”
Fisher & Paykel takes the integrated story one step further with its self-styled ‘Distributed Dishwashing’ concept, which is a result of its unique DishDrawer form factor. Here’s marketing manager Kara May explaining what this means.
“Our DishDrawers can be separated and placed around the kitchen exactly like drawers to accommodate those who are short on space in the kitchen, have smaller households, lighter wash burdens or want to be able to locate more than one drawer at convenient locations. We call this ‘distributed dishwashing’.”
May said this system gives users the freedom to design their kitchen around the way they live, with the dishwasher placed where it is most practical and ergonomic. Fisher & Paykel offers DishDrawers in wide, tall, double and single options to cater to a variety of consumers.
Phillip Anderson, head of public relations at LG Electronics, expands on this point. He said that convenience needs to be complemented by an attractive appearance.
“As the kitchen increasingly becomes the entertainment hub of the home, consumers are now looking for products that are not only technologically advanced, but also make the kitchen visually appealing,” Anderson said. “Additionally, increasing costs of electricity and water consumption have brought environment and household concerns to the forefront of technology development, resulting in an even greater need for efficient, affordable and effective products.”
All this innovation and targeted marketing will see the dishwashing pie grow in 2014, according to Dominic Wong from Electrolux Home Products, representing AEG, Electrolux, Westinghouse and Dishlex.
“We expect market to grow this year as household penetration continues to grow from around 60-to-65 per cent,” Wong said, before isolating Electrolux’s major initiatives. “Electrolux’s consumer insights program has identified that people are impressed by the quietness of appliance operation and we are addressing this with better and more effective insulation. Other consumer priorities include water and energy savings and product features that allow for flexibility in program times and loading items in various shapes and sizes.”
Darren Sharvell, product development manager at Omega, said that while his brand was doing well, there are some danger signs
“Whilst the market is still as competitive as ever, we have seen some marginal growth for the 2013 calendar year,” he said. “There were a number of factors driving this growth, such as improved energy and water ratings, third layer cutlery trays and an increase in place settings. We also saw market leaders and premium brands push their ASPs down to the next tier in search of market share growth.”
Daniel Bertuccio from ILVE had a similar view:
“Over the past year, dishwashers have remained a very affordable, convenient and necessary appliance for today’s kitchen — gone are the days of labouring over the kitchen sink for 30 minutes to get the dishes done,” he said. “Possibly the biggest issue for suppliers is the increased competition but I guess the consumer ultimately wins here and there is nothing wrong with that.”
The number one brand in the market is Bosch, which has 22 per cent market share of the category by value. Well-placed sources say that the erosion in ASPs — around $850 in 2011 to $820 in 2012 to $800 in 2013 — is being caused by premium brands adjusting their prices downward to increase market share. This isn’t having a significantly deleterious impact on high volume brands like Dishlex but it is squeezing out the middle market.
Appliance Retailer has been told that around 380,000 dishwasher units were sold in 2013; a 4 per cent increase, year-on-year. That makes the total dishwashing market for 2013 worth around $305 million.
For its part, Bosch and Siemens credit technology innovations and attractive features for its strong performance.
“The Bosch and Siemens brands continue to lead the way in developing innovative, resource efficient technologies with the introduction of the Zeolith Drying system,” said product manager Robin Werth. “This pioneering mechanism uses naturally occurring Zeolite minerals within the dishwasher to turn humidity into heat energy, deliver improved drying results, reduced drying time and even lower energy consumption.
Finally, Chinese appliance megabrand Haier is continuing with its value proposition, promoting an interesting range of compact dishwashers that will appeal to price sensitive younger consumers.
“While most households have a dishwasher, these days they are still not considered an essential purchase in some households,” said brand manager Yvonne Hong. “These are often the budget-conscious consumer, so Haier’s stylish but affordable appliances offer a good opportunity to secure a new buyer. Haier dishwashers showcase a number of handy features that can help retailers do that.”
Haier will be promoting its dishwashers during July and August 2014 in a joint-promotion with dishwashing detergent brand Finish.
“We are making considerable inroads into the Australian market and the Haier brand is growing here despite a growing field of competitors. Partnering with a brand like Finish which has high recognition in Australia provides a perfect platform for lifting brand awareness for Haier.”
This author is on Twitter: @Patrickavenell