Small Appliances: how the sector is changing

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In the last ten years, the small domestic appliances (SDA) market has been living significant changes. Despite the crisis, the average price has grown, while sales volumes have decreased. We talked about it with Chiara Galati, group account manager at GfK

Chiara Galati
Chiara Galati

By Lara Colombi

The small appliance market confirms itself as particularly dynamic, with excellent performance of new products such as juicers and cordless electric brooms. This is not a big news, because the industry, even in the hardest years of the crisis, has held up well, seeing the constant growing of its average price. Although the volumes have not recorded so positive trends. It is Chiara Galati to tell it, group account manager at GfK, who also explains us in what Italy differs from other European countries.

How have the small appliances sales evolved in Italy during the last ten years?
In the last decade in Italy we have witnessed an increase in the average price and therefore in the product mix in small appliances sector. The field value has continued to grow, with the exception of a couple of years, in which we recorded a light drop, especially when compared to the substantial declines in other sectors such as consumer electronics, which instead has suffered a lot. In short, even in the most difficult years of the crisis, small appliances have held up very well. Then 2015 was a particularly good year.

So the market has grown in value. And what about sales volume?
The total number of sold units, instead, in all the different product categories, has declined over the years. The meaning that we generally give to this phenomenon is that today in Italy people buy less but better.

Which products, in particular, have seen their average price rise?
It is a transversal phenomenon regarding all types of small household appliances, with the exception of coffee machines. This market is the only one which, although positive in terms of volume, over the last 10 years has seen a decrease in the price of the machines, that from 120 euro fell about to 99 euro.

In the period under analysis, which products have conquered the land and which gradually have lost importance?
If we compare the current landscape of small appliance with the one of only ten years ago, we can identify some macro trends. First of all it has consolidated the importance of vacuum cleaner market, which keeps the first position by continuing to grow. The second in the ranking is changed instead. Until some time ago this position was held by irons, which have left the place to the world of food preparation. It is a big change that took place in 2015.

What else has changed?
The coffee world has been protagonist of a big boost in terms of volumes. It has become one of the most significant markets for sold units but, as we said, it has recorded a decrease in value. Especially the world of the capsule machines, over the years, has seen a significant decrease of its average price. It is a market that continues to be very positive and dynamic but with a turnover that, in terms of importance, is gradually reduced compared to what it was until ten years ago.

How has the world of personal care changed?
An important comment is right on the world of women’s hair styling, which in the past had its relevance but today records a light fall, although there are still some niches with positive performance. The most significant part of the turnover, that in a past was derived from the sale of hair straighteners, continues to decrease. Conversely curling irons and other products related to “curly” mark positive results. In the last three years, then, a strong acceleration has been seen of a world that, historically, in Italy was little guarded. I’m talking about the electric dental care sector which, until a few years ago, was marginal and today records good growth performance.

The positive trend of the small appliance market was also confirmed by the closing figures of 2015. Which product categories have gone better?
In 2015 all the trends that I just listed have been confirmed, but another phenomenon has been added to these. Last year, in our country the fruit extractors saw a real ‘boom’, especially those with slow extraction, able to maintain the nutritional properties of the juice by eliminating all of the pulp residues. We recorded the highest growth at European level, which has led this sector to conquer, in one only year, the 4% of the total market of small appliances. We speak of a 85% increase year over year.
The other big news of 2015 comes from the vacuum cleaning world, that has seen a big marked rise of the robot and rechargeable electric brooms segments. Many players have moved to give value to the market, also thanks to the great attention given to energy efficiency, with new launches that have been able to arouse consumer interest.

In addition to the extractors, the whole “kitchen” sector has obtained excellent results. On what does it depend?
It is important to emphasize the growth of the cooking world, meaning the set of all the small appliances, such as food processors, mixers and blenders, which also allow users to cook food. The world of coffee machines is moving well, including a segment that has always been important in Europe but a bit less in Italy, which is that of automatic machines also able to grind the beans.

Also the “personal care” area went well. What products are the protagonists of this growth?
In addition to the classic shaver, which had suffered a lot in recent years, all the products for the styling of the beard are going very well.
Also the women’s pulsed light epilation world records good results, thanks to the launch of more compact products that have met the taste of the consumers, probably until now intimidated by large models, which looks more professional and have a very higher average price.

Have these trends been confirmed also for what regards the first few months of 2016?
The first results of the year confirm this trends. We do not see big turnaround even if, in these first months, the market is a little less sparkling compared to the last months of 2015. Coming from a very successful year a bit ‘shy’ starting is normal.

In what is the Italian market different from those in Europe? Even France, UK, Germany and Spain in 2015 recorded positive trends, both in value and in volume, with a certain homogeneity of current trends.
The turnover generated in Italy, however, has two features related to the world of the house. First of all, here the business of irons is quite important compared to other countries: if we make a comparison with German and Italian population, we immediately realize that the importance of this product category is proportionally higher in our country.
At the same time, however, it is also a market among the most “poor” because the average price, compared to the German or French markets, is much lower. England, instead, esembles us.

Do we Italian choose only cheap irons or also try to save money on other products?
In Italy also the vacuum cleaning world has a lower average price than the other four countries. This difference is related to the product mix: the big presence of electric brooms is an Italian phenomenon. In the UK they will sell more carpet cleaner that have a higher value. That of vacuum cleaners is, anyway, a very important market in all four examined countries.

Are there small appliances for which we are willing to spend a lot?
Italy is very strong in the food preparation world, which has an important value with an average price in line with that of the other countries. Only France is beyond us selling more expensive products.
Among the various markets, always in the kitchen area, there are considerable differences due to different eating habits. In Italy there is practically no market for kettles and that of the coffee machines is much smaller than elsewhere, probably because of our attachment to the coffee machine and of the typical Italian habit of having breakfast at the coffee shop. In Germany, this segment accounts for a quarter of the total market of small appliances, while in our country only 12%. Regarding, instead, personal care we are far weak in electric dental hygiene compared to all other countries.

Let’s speak now of purchasing channels. What does emerge from the comparison with other countries in relation to on-line shopping of small appliances?
In Italy the Internet channel for small appliances purchases begins to gain importance and today weighs 12% of the total market. We are still very far from the values recorded in Germany, where e-commerce already weighs 30% of the total business of SDA, followed by UK with 26% and France with 15%. Spain has similar values to ours.

What do Italians buy on-line?
The phenomenon concerns all categories without distinction although, of course, on the Internet products with higher average price are conveyed much better. Consumers prefer the Web for the high-end level because they hope to buy at lower prices.
The best on-line sold products at the moment are robotic vacuum cleaners and pulsed light epilators. It is important to note that, although the Internet represents only 12% of the market total, it has a growth trend of 60%.

Let’s talk of the Internet again, but not as a channel. Are there estimates on the diffusion of connected small appliances?
In Italy the level of diffusion of connected small appliances is still very low. In SDA we are a bit behind compared to other sectors. But we can analyze data at European level. In the main five EU countries (Germany, France, UK, Italy and Spain), if we take for example the world of automatic coffee machines, we realize that already 1.5% of sold models includes connectivity, with a very positive trend of +15 % year on year. In the vacuum cleaner robots the percentage is 1.3%, while higher numbers are recorded in the electric dental hygiene world, that touches a share of 7%. On the ranking top, however, we find, with 14%, the people scales, one of the first objects to be connected to the network for better monitoring weight and health.