Get Connected: November 2010

NOVEMBER 2010 www.gcmagazine.co.uk

T H E

KITCHEN STUDIO

M A G A Z I N E

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E L E C T R I C A L

I N D U S T R Y

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The “Style File” on the latest in colour, design, materials and performance in the 21st century kitchen for retailers looking for that competitive edge

3D CHRISTMAS With 3D TV in the home moving decisively closer to the mainstream, Sony looks at the home entertainment, gaming and digital imaging options that could give Christmas 2010 sales a whole new dimension

WARRANTIES & BREAKDOWN INSURANCE Point-of-sale warranties are looking increasingly attractive as a revenue stream and cash flow improver. In a special report, leading provider Domestic & General talks straight to retailers about the commercial benefits

GEORGE COLE GETS CONNECTED

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Industry guru George Cole on the passing of a CE phenomenon, the growth of “on demand” TV services and the latest threat to the CD

FROM THE BENCH Alan Bennett analyses some of the swirly and snowy picture problems of digital TV

BACKCHAT Industry eavesdroppings and a 2-minute interview

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CONTENTS

STOVES LIMITED EDITION MINI RANGE COOKER (P13) www.stoves.co.uk

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Editorial comment

/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

The Word

In and around the industry / / / / / / / / / / / / / / / / / / / / /

The Product Gallery

/ / / / / / / / / / / / / / / / / / / / / / / / / / / /

Kitchen Studio

Colour, gloss, glass, stainless steel, cool white, striking black, wood, laminates, bold freestanding statements and discreet built-in integration. Where next for style and performance in the 21st century kitchen?

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/ / / / / / / / / / / / / / / / / / / / / / / / / / / / /

3D Christmas

It’s not just about the TV. Sony talks to retailers about the wider world of 3D entertainment, gaming, movies and home-generated content that is opening up to UK consumers for Christmas 2010

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/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

Warranties

A special report from Domestic & General looks at the facts and figures on one of UK electrical retailers’ untapped profit resources

www.gcmagazine.co.uk

George Cole Gets Connected Farewell to a CE icon

/ / / / / / / / / / / / / / / / / / / / / / / / / /

From the Bench

The swirly, snowy wastes of digital TV / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

Backchat

Industry comment and a 2-minute interview with Gorenje’s Ruth Ferguson

Editor in Chief: Marlinda Conway Telephone: 01420 88633 marlinda@gcmagazine.co.uk

Editorial & Publishing Director: Terry Heath Telephone: 01420 88633 terry@gcmagazine.co.uk

Magazine Advertising Sales: Telephone: 01420 88633 sales@gcmagazine.co.uk Creative Director: Will Dobson design@willdobson.co.uk

Subscriptions & Circulation: GCCD, 13 Premier Avenue Grays, Essex RM16 2SB. Telephone: 07818 088671 Fax: 01375 370436 circulation@gcmagazine.co.uk

Advertisement Production Administration: Will Dobson Telephone: 01342 850 456 gcads@willdobson.co.uk

Annual subscription rate (inc. postage): UK £88; Overseas £108.

Production and Print: Sparta Press, Blackfen, Kent. www.spartapress.co.uk Copyright © 2010 Mud Hut Publishing Ltd. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior permission of the publisher.

Get Connected is published by Mud Hut Publishing Ltd., Alresford House, 60 West Street, Farnham, Surrey GU9 7EH.

NOV 2010

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EDITORIAL COMMENT

Marlinda Conway Editor in Chief

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gET CONNECTED

NOV 2010

his is shaping up to be one of the 21st century’s most unpredictable Christmases yet for the electrical industry.

Retail news from the high streets has been mixed, but it is clear that this could be a massive season for electricals on the internet, where more and more consumers feel comfortable searching for deals and are welcoming the opportunity to shop without venturing out into the Christmas shopping scrum. Dealers who have this year followed the successful trend towards a bricks-andmortar outlet PLUS a well constructed website are well positioned to make the most of the season. And those who haven’t fully embraced the “bricks & clicks” formula yet should consider it as a priority for 2011. The retail world is changing, and e-commerce is not only here to stay, but here to take a significant and growing slice of total retail revenue.

One of the great imponderables this season is the spectre of “the cuts.”

The Government has made it plain that “austerity” – one of those words that has a morally bracing but comfortably vague meaning until it makes a personal difference to individuals’ lifestyles or employment status – is going to enter the homes and lives of many more UK citizens in 2011.

Enough people this year have seen, heard or experienced enough of what it may mean in practical terms to actually believe, this time, that “this means me.” The result is consumer caution, exacerbated by a weak housing market and a scarcity of credit. And consumer caution means reduced spending at retail.

Pulling in the opposite direction to caution are elements such as the UK citizen’s natural propensity to loosen up and go for

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it during the festive season. Christmas 2010 may be seen as the “last fling”, the last chance to enjoy a bit of consumerist extravagance before “the cuts” close down the possibilities and make austerity a reality. The prospect of VAT at 20% in the new year may also be an incentive to make Christmas the watershed between the last hurrah of the “old” life and the restraints of the new order.

For retailers who – perhaps reluctantly – have to rely on Christmas for a significant proportion of their annual turnover, it’s a difficult balance to strike. Is it better to appeal to caution with sensible, reasonably priced, value-for-money appliances, or to appeal to the spirit of “what the hell, it’s Christmas” with tempting, high-spec goods and exciting new technologies such as 3D TV? A bit of both, bearing in mind the demographics of local clientele, seems to be what most retailers are opting for.

At least we can all take comfort from the fact that austerity will not reach its tentacles as far as the higher echelons of the banking industry. The bonuses are back in the billions, although not up to the standards some bankers have been accustomed to.

Austerity means different things to different people. So spare a thought, as you agonise over how much to spend on presents, who might have to make do with a card this year, and whether you can afford to stock up with another couple of bottles of whisky and crates of beer for casual callers, for the bankers who will be faced with the stark reality that the bonus just won’t stretch to Rolex, Gucci, Jimmy Choo and Bollinger all round, if they really want to invest in that holiday villa in the Seychelles. (Sorry, we did promise not to do any more Marxist bank bashing this year, but sometimes the urge is irresistible).

Terry Heath Editorial & Publishing Director

Will Dobson Creative Director

James McIntosh Consultant Home Economist

Lynne Henry Communications Officer, GfK Marketing Services

George Cole Consumer Electronics Consultant

Top Cat The Voice of The Manufacturer

Average net circulation for the 12 issues distributed between Jan-Dec 2008 is 6,228

¹ register online at www.gcmagazine.co.uk for your FREE copy of Get Connected Magazine

quality, innovation, design Haier in 2010: a year of change Did you know?

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THE WORD | INDUSTRY NEWS

Christmas spending forecast to reach £85.2 billion

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nalysts from Verdict Research have forecast that Christmas 2010 will be the best for retailers since before the recession. Despite the prospect of spending cuts and job losses, consumers are predicted to spend an extra £1.6 billion compared with Christmas 2009 – the highest increase in sales since Q4 2007.

The research company said that internet channels are set to benefit most – accounting for more than three quarters of the extra spend – as more retailers now trade online and consumers enjoy the benefits of multichannel flexibility, choice and convenience.

Maureen Hinton, lead retail analyst at Verdict, said “the winners” will be retailers that provide a

range of multichannel options for buying, delivery and exchange, and whom the public trusts. Specialist retailers with unique ranges will benefit too, she added.

Verdict also predicts that sales of electricals will be lifted by new products but hit by price deflation, and “basic high-ticket items in white and grey goods will continue to decline.” Smartphones, tablets and Kindles are forecast to be popular, but at the expense of goods such as iPods, portable media players and cameras, which have been staple gifts during festive periods in the past. As for the TV market, Verdict believes that, with maturity now beginning to set in, “the sector will struggle to match the tough comparatives from 2009, while heavy competition will result in strong price deflation (-7.1%).”

Q3 retail health maintains slow recovery

gET CoNNECTED

NOV 2010

The UK’s retail health continued to improve marginally in quarter 3 and a slight improvement is forecast for the fourth quarter of the year, according to the KPMG/Synovate Retail Think Tank (RTT).

The Retail Health Index eased upwards by one point, to 87, from a base of 100 in Q1 2006. The view of RTT members is that the shallow upward trend is now expected to continue, to reach 88 points in the final three months of 2010, although the RTT cautioned that the “delicate balance” could easily not materialise.

Vicky Redwood from Capital Economics said the figures were rather weaker than the strong performances a few “lions of retail” might have

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suggested. Neil Saunders of Verdict Research remarked that the sector is “patchy” right now, with few consistent trends. He said: “Some class-leading retailers are pulling the general health of retail upwards, but there is no doubt that many more, particularly those more dependent on the sale of big-ticket items such as furniture, carpets, white goods and electricals or reliant on people fitting out or doing up new homes, are pulling strongly in the opposite direction.”

Looking forward to Q4, Tim Denison of Synovate said that stores are going into Christmas with very tight stock, “as they did last year.” Consequently, “we don’t expect to see ‘slash & burn’ discounting amongst leading retailers.”

John Hutchinson, retra President 1999/2000 and 2006/07, has won the Entrepreneur of the Year Award for Herefordshire. The retailer triumphed against stiff competition and hundreds of entries in the Pride of Herefordshire Awards, which have been held for the past five years and are sponsored

by ASDA and The Hereford Partnership.

British retail the “engine room” of economic recovery Full-time retail employment rose 2.1% in the third quarter of 2010 compared to the same period last year, lifting hopes that the sector will help drive the UK economy forward.

The figure is equivalent to a net increase of 12,746 retail jobs, largely due to the opening of 652 new retail stores.

At a time of economic uncertainty, and with half a million public jobs due to be lost by 2014, Stephen Robertson, British Retail Consortium Director General, said the figure provided up-to-the-minute evidence that retailers are continuing to invest in new premises and people. “British retail is the engine room of economic recovery,” he commented. “This is the tenth consecutive month of retail employment growth – an impressive effort in tough trading conditions.”

Norfolk retailer J B Postle & Son joins CI(H) Norfolk-based independent J B Postle & Son has become the latest retailer to join buying and marketing group CI(H). The company was one of 22 prospective members invited to this year’s trade show at Birmingham’s NEC, at which 50 suppliers exhibited their products and services.

Jonathan Postle remarked that it was “getting more difficult” to obtain certain products from

manufacturers. “Having access to the CI(H) group warehouse, with twice-weekly deliveries, will give us a definite advantage,” he commented.

CI(H) chief executive Stuart Cook said that he expected other like-minded retailers to join the company in the coming months. “There is no doubt that independents need to be in one of the buying groups. If they are not, it’s going to be a very rough ride for the next few years,” he commented.

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THE WORD | INDUSTRY NEWS

Loewe Group posted a 13% fall in thirdquarter 2010 sales, to €66.5 million, and a negative EBIT of €5.0 million, compared to a positive €3.2 million in the same period of 2009. EBIT for the first nine months of the year was recorded at a loss of €9.1 million, down from positive € 4.6 million. Group sales for the first three quarters of the year fell 3% to €213.9 million. The company said that a 6% fall in gross margin was due to higher procurement costs and targeted price adjustments.

Operating losses at Best Buy UK have been revised upwards from £45 million to between £50 and £55 million following a recorded operating loss of £29 million in the six months to September 30th 2010.

An increase in sales volumes led to a 37% rise in Q3 2010 net profits for Indesit Company. The business posted a profit of €40.3 million, compared to €29.4 million for the same period last year. Revenues rose 11.4% to €795 million. In the first nine months of 2010, the Group produced profits of €67.8m against a like-for-like result of €6.9m in 2009. Of the full-year 2010 [all things remaining equal], Indesit said it expects Group sales to rise by around 9%, an improvement on the previously forecast 6%, with EBIT up by approximately 50%, against the 40% previously forecast.

Hitachi posted a net profit of £554.8 million in the three months to September 30th 2010, reversing a £388.8 million loss in the same 3 months of 2009, in spite of the continued strength of the Yen. The company’s Digital Media & Consumer Products Division reported revenues flat, at £1,962 billion, compared to the same period last year, but operating income was up 1.5%.

Sony Corporation reported a return to profit in the three months to September 2010, making 31 billion Yen (£242 million) in the quarter compared to a 26.3 billion Yen loss in the same period last year. With the Yen still close to its all-time high, consolidated operating income, at 68.7 billion Yen, was very much stronger than analysts’ forecasts.

Sony revised its operating profits forecast for the full year upwards by 11% to 200 billion Yen, but, with an eye on the continuing strength of the Yen, the full-year sales forecast has been revised down slightly to 7.4 trillion Yen. Panasonic Corporation recorded an operating profit of 85.2 billion Yen for the second quarter of its current fiscal year ending March 31 2011, with sales up 27% to 2,206.8 billion Yen compared to the same quarter last year. The consolidated 6-month results for the half-year ended 30 September showed sales up 31% at 4,367.9 billion Yen

and pre-tax income up sharply to 144.6 billion Yen, compared to a 26.5 billion Yen loss in the same period last year. Sales are forecast to increase by 20% for the full year compared to fiscal 2010, and operating profit is forecast to increase by 63% in the same comparative period.

Nintendo, the company that brought a whole new dimension and new sales records to gaming with the launch of the Wii console, reported a loss of £15.6 million for the six months to 30 September 2010 compared to a net profit of £858 million for the same period last year. Sales fell 34% to £4.58 billion.

Electrolux Group posted a 5% drop in net sales for the third quarter of 2010, from SEK 27,617 to 26,326m. Operating income fell 14% against the same period last year to SEK 1,977m, corresponding to a margin of 7.5%.

President and CEO Hans Stråberg said he was confident that “2010 will be the year we reach our target of an operating margin of 6%.”

Argos and Homebase parent Home Retail Group posted revenues down 3% to £2,720 million for the six months ended 28 August.

Like-for-like sales at Argos fell 6.5% due to falling demand for big-ticket items. Overall pre-tax profits at the group declined by £14 million to £103 million.

ShopJimmy seeking partnerships with retailers ShopJimmy, the US TV parts distributor and recycler which launched in the UK in October with an International branch in Witney, Oxfordshire, says it is pleased with its early success in the UK and is aiming to continue expanding both here and in mainland Europe.

Frank Verdeja, chief operating officer of the UK business, said that the company is seeking additional partnerships with retailers, both large and small, as well as with extended warranty companies and TV repair/ service business and technicians.

ShopJimmy is also currently developing a used/ damaged flat screen TV purchasing network for independent retailers and looking at becoming part of reverse logistics solutions for the multiples.

Read the full article at www.gcmagazine.co.uk

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THE WORD | INDUSTRY NEWS

Industry body retra has organised a national coarse fishing competition which takes place on Sunday 15 May 2011 at Moorlands Farm, Hartlebury in Worcestershire. Proceeds from the event will go to Great Ormond Street Hospital, the chosen charity of retra president Steve Norman.

The UK-designed and manufactured S-Box™, a kitchen countertop ‘pop up’ storage solution (see The Product Gallery in this issue), has won the FIRA (Furniture Industry Research Association) Innovation Award.

Two Neff built-in electric ovens gained impressive scores and ‘Best Buy’ status in tests carried out for the November issue of Which?. In the ‘above £600’ category, Neff pyrolytic single oven model B16P42 (Series 5) gained the top score of 83%.

In the ‘less than £600’ category, Series 1 single built-in oven B14M42 merited a ‘Great Value’ award.

Panasonic has entered into a partnership with Twentieth Century Fox Home Entertainment to supply the 3D blockbuster AVATAR as part of an exclusive bundle with the purchase of a Full HD 3D VIERA TV package, which includes two pairs of glasses and a 3D Blu-ray player or 3D Home Theatre system.

Dimplex has introduced a new telephone service dedicated to trade customers as part of its commitment to customer care. Calling 0845 601 5111 will direct retailers and installers straight through to sales administration, the heating design team, customer services and all other support services.

Ticket is also valid for the parallel trade fair :

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Audio manufacturer Naim received His Royal Highness The Duke of Kent and a group of local dignitaries at its production facility in Salisbury on Wednesday 3rd November. The Duke, pictured here with Naim MD Paul Stephenson (right), visited the company to present it with the 2010 Queen’s Award for Enterprise in the International Trade category.

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THE WORD | INDUSTRY NEWS

BRC survey reveals poor non-food performance The latest British Retail Consortium (BRC) KPMG Retail Sales Monitor shows total UK retail sales value up in October by 2.4% compared to the same month last year, but food price inflation is driving the growth and non-food – notably big-ticket electricals – is suffering from low consumer confidence.

Non-food sales value between August and October was up 1.4% year-on-year, but the BRC said the modest rise was more than cancelled out by inflation and, in real terms, non-food is actually Buying and marketing group CI(H) has presented Malcolm Lake, MD of Isle of Wight-based Buywise, with a Blomberg and Euronicsbranded van. The retailer won the vehicle in a competition at the recent CI(H) trade show held at Birmingham’s NEC. Pictured (left to right) are CI(H) white goods buyer Tracey Harris; Beko sales director Ragip Balcioglu; CI(H) CE Stuart Cook; Beko MD Clayton Witter; Malcolm Lake.

Haier to “win-over” UK electricals market Following a period of “significant structural reinforcement” in the UK and mainland Europe, Chinese brand Haier has issued a statement of intent for its operations within the regions.

The company, which recently appointed René Aubertin, former Senior Vice President of Kesa Electricals, to the position of CEO of Haier Europe and relocated its European HQ to France, said that the promotion of Haier Europe’s former Brand and Marketing Manager Duan Wei to the position of Market Director Haier UK & Ireland, coupled with the recruitment of Jeff Moody as Sales & Marketing Director, demonstrates the serious investment the global brand is prepared to make to win-over the UK household electrical goods market.

Haier’s main objective is to become one of the top five European and UK home appliance brands within the next 5 years. Jeff Moody commented that the initial focus for the UK will be on white goods. “We will look to roll out quality, flagship Haier designs in the coming months,” he said. The company also intends to market a number of technology “firsts” in brown goods, which include 3D and NO WIRES TV models.  See the full story at www.gcmagazine.co.uk

Best Buy UK opens online store Best Buy has launched a UK transactional website featuring all products and services that are available in its stores, along with 350 ‘Inspiration and Advice’ guides and articles on the latest technologies, product and service information.

The retailer has teamed up with Reevoo to present product reviews written by purchasers, and the site also contains community forums and blogs providing the latest technology news and the means for consumers to obtain advice from community members and post their own videos of product reviews.

Best Buy is also offering free UK delivery on purchases and a Reserve & Collect facility which, within the hour, notifies customers when their purchases are available for collection. UK Managing Director for Online deVere Forster said: “With Christmas on the horizon, customers will now be able to shop for the very best and latest products and services available at great prices, in a captivating and entertaining environment.”

See www.gcmagazine.co.uk for the stories behind the news…  Consumer confidence at lowest level for a year Fears over jobs and personal finances drive decline

 Is it worth it?

NOV 2010

 BRC welcomes Chancellor’s budget deficit measures

GET CONNECTED

Woolworths puts the block on Wellworths

Levy on bank balance sheets expected to raise £2.5 billion a year

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declining. BRC Director General Stephen Robertson commented: “Unfortunately it’s more of the same for hard-pressed retailers, with weak consumer confidence continuing to undermine growth. Tough trading conditions are unlikely to change in coming months. Our BRC Nielsen Consumer Confidence Survey shows 84% of consumers think the economy is still in recession, while 26% say they have no spare cash.

Retailers will be hoping those concerns are at least put on hold for Christmas.”

BRC Director General says plans will “remove some of the uncertainty”

 Bank Levy: more detail published  UK faces increasing overseas competition for investment CBI calls on Government to recognise investors’ concerns

PURE launches ‘Make a Difference’ eco incentive PURE is offering whale and dolphin-spotting cruises and a host of other prizes in a ‘Make a Difference’ incentive that aims to encourage retailers to sell more of the brand’s Energy Saving Trust Recommended radios.

The incentive runs in tandem with a consumer promotion available exclusively at participating independent dealerships until the 24th of December 2010.

Company liquidations down in 3rd quarter Figures from the Insolvency Service show that 3,974 firms went into liquidation in England and Wales, compared to the same period last year. But the 13.9% drop could be a temporary improvement, analysts say, as continuing tight credit from banks and the effects of Government cuts make trading conditions difficult, “particularly for small firms.”

Commenting on this “prime time of year” within the retail sector, trade credit insurance firm Atradius said: “Many retailers will have paid their quarterly rents until the end of the year and are maximising opportunities to improve revenue as one final push.

With the next quarterly rents due at the end of December and the VAT increase in January, we will soon establish the winners and losers of Christmas and New Year 2010/ 2011.”

EXCLUSIVE REPORT

Belling ambassador Brian Turner gives a boost to Barretts Open Evening

I

ndependent retailer Barretts Digital World has staged an Autumn/Winter Open Evening for the past two years – an event which generally attracts 150 to 200 customers eager for a taste of the new seasons’ products and the price deals on offer on the night. But this year (year three) was a tad different. More than 300 people visited the Canterburybased superstore on a blustery, early November evening, attracted by the presence of celebrity chef Brian Turner.

Director Shaun Barrett said the draw of the chef “exceeded my expectations.”

Barretts Digital World was the winner of a competition organised by Belling, in conjunction with Get Connected Magazine, in which retailers were offered the opportunity to ‘Win Brian’ for a day. The initiative was created to boost footfall and sales; and that it most certainly did. The 300plus customers contributed to making the event “the most successful ever.”

Shaun Barrett reported sales on the night up almost 80% on last year’s Open Evening, and 130% on the year prior.

“Obviously this is great news for Barretts and exactly why we entered the competition,” he said.

The retailer, who is one of the first in the country to establish a GDHA Range Centre displaying range cookers from the manufacturer’s Belling and Stoves brands, used the evening to best effect. He opened the event by welcoming his customers to the initiation of the store’s new kitchen CUSTOMERS LINE UP

TO TRY BRIAN’S ‘BEL

LINGCOOKED’ SAD

GET CONNECTED

THE BARRETTS TEAM, PICTURED WITH BRIAN TURNER, BEFORE THE ACTION BEGINS

studio before inviting them to browse around the well laid out, 10,000ft 2 outlet at their leisure; to take the opportunity to view product LOTS OF SMILES FROM demonstrations, including the KENT KIDS AS THEY SET ABOUT THEIR FUN DRAISING EVENING exciting presentation of 3D TV, and to be one of the first to see the new Videowave entertainment system from Bose.

Brian Turner commenced his cooking demonstration shortly before 7.00pm; his commanding personality and wit serving to capture the audience’s attention as he set about the preparation for a three course meal of grilled pickled mackerel on a fennel salad, stuffed saddle of lamb and a white chocolate and raspberry trifle.

As Barretts’ competent staff rallied to make the event a resounding success, representatives from local charity Kent Kids Miles of Smiles, which provides care for sick and disabled children, busied themselves with a raffle that would raise the funds to buy a television for their dining hall. Generous customers donated in excess of £300 and the figure was topped up by Belling, an act which enabled the charity to buy a 42-inch “state-of-theart” product.

Reflecting on the success of the evening, Rob Burton, commercial manager for Belling, said: “Supporting our retailers is a key part of our ongoing strategy and we were delighted to be able to help Shaun create this fantastic in-store event.

The evening has been a great success and we’re delighted that Kent Kids has also benefitted.”

NOV 2010

SHAUN BARRETT AND BRIAN TURNER PREPARE TO WELCOME AN APPRECIATIVE AUDIENCE

DLE OF LAMB

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S-Box™ kitchen storage solution The UK designed and manufactured S-Box™ is a concealable ‘pop up’ box that can be personalised to match any kitchen work surface. It comes with a choice of contents, is said to be easy to install and can be retro fitted. The range currently comprises six product applications: g

19” flat screen LCD HD ready TV

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iPod/MP3 docking station

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3 power sockets

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Built-in knife block (knives not provided)

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Two tiered spice rack and 10 jars

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Key rack

0845 486 8000 www.the-sbox.com

Siemens Teppan Yaki and BBQ Grill Domino cooktops Siemens has expanded its Domino cooktop range with a Teppan Yaki hob and a new-style BBQ Grill. Both appliances are 40cm in width and feature the brand’s innovative touchSlider control system and electronic displays. g

Teppan Yaki: Stainless steel griddle suitable for all foods that should be fried or grilled

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Temperatures range between 160°C and 240°C / 70°C warming function

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BBQ grill: Uses lava stones or water

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9 power levels / 2 cooking zones

01908 328400 www.siemens-home.co.uk

Beko OIM25502X built-in multifunction oven This latest addition to Beko’s comprehensive built-in range boasts one of the lowest energy consumption levels on the market, consuming 30% less than a standard ‘A’ class product. g

65-litre capacity

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Glass control panel and push in/pop out knobs

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12 settings and programmable electronic timer

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Removable inner door glass and shelf runners / easy-clean enamel cavity

01923 818 121 www.beko.co.uk

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NOV 2010

MagicBox Tower compact sound system

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MagicBox’s Tower iPhone/iPod Sound System with DAB/FM radio and alarm clock is 15cm high and 8cm wide and comes in red, purple, blue or black – RSP £69.99 g

High resolution backlit inverse display with scrolling text

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Digital volume control

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20 presets (10 DAB/10FM) / automatic and manual scan

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12 or 24 hour clock with auto time update

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Dual alarm / wake up to iPod, DAB, FM or buzzer / snooze and sleep timer

0207 998 1696 www.magicboxproducts.co.uk

THE PRODUCT GALLERY

Stoves limited edition Mini Range cooker Stoves, on teaming up with the WI to sponsor the organisation’s first national Real Jam Festival, has produced a special edition 55cm ‘Strawberry Jam’ Mini Range cooker to celebrate the UK’s rising liking for the preserve. g

LED clock & programmer

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Cast lid with chrome handle

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Ceramic hob with 4 zones

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Top conventional oven and electric grill

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A-rated main fan oven with side lights

0844 24 84 149 www.stoves.co.uk

Sharp AX1100SLM / RM countertop steam oven Sharp Electronics UK has developed a space-saving countertop “true steam” oven with integrated microwave and grill. The 27-litre Steamwave has balanced all-in-one meal options, 15 pre-programmed menus, steam defrost and a de-scaling function. RRP £299.99.

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by Orla Kiely PURE has commissioned fashion designer Orla Kiely to produce a radio incorporating her signature stem print.

The result is a luxuriously styled portable unit finished with a mirror chromed handbag-style handle, walnut veneered cabinet, cream fascia and a stylish leather tag to complete the look. The product is available to independent retailers from March 2011.

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16CC per minute steam generating power

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Digital and FM radio / input for iPod/ MP3 player

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900W microwave / 1000W grill

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ChargePAK provides up to 24 hours’ portable listening

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2 x steam trays, 1 x grill rack, 1 x glass tray

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OLED screen with manual and automatic brightness controls

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Combined instruction manual and cookbook

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textSCAN™ and Intellitext®

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Alarm, kitchen timer and 30 presets

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Frequency response 75Hz - 20KHz

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Loudspeaker Drivers 2 x 75mm bass/mid / 2 x 30mm tweeters

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Power output 2 x 15 Watts / Standby <1 Watt

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Available in white and black finishes

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Conran Audio, a new brand available from Armour Home, has brought the Conran ‘Speaker Dock’ for iPods and iPhones to the market. The unit is the creation of Studio Conran with audio performance engineered by Q Acoustics and operates wirelessly with Bluetooth-enabled devices. The dock assembly rotates so pods and phones can be placed horizontally or vertically. Six preset audio equalisation settings can be selected via an elegantly styled remote control. RSP £250.

NOV 2010

Conran Speaker Dock

13

STYLE

TIMELESS APPLIANCE DESIGN BY NEFF

14

The latest kitchen trends show that colour is cool, glass is class, steel holds appeal and gloss is the boss. But how far will consumers go in the name of ‘style’? GC reports

S

tyle is a very personal thing; one man’s chic is another man’s kitsch. But beauty is in the eye of the beholder, and most consumers will consider themselves to show good judgement and taste when it comes to styling a kitchen. Decidedly influential in generating this self-assurance and the eagerness to demonstrate the capacity for artistic flair, are the persuasive stimuli offered by magazines, TV programmes and attention-grabbing commercials portraying couples and families with idyllic lifestyles, serene in their enjoyment of well-designed, strikingly airy environments.

There is no shortage of ideas for revamping the kitchen and, although we haven’t seen a ‘one minute makeover’ on this room of the home yet, the images just keep on coming, feeding consumers a dish of glamour, a ‘you can do’ attitude to hosting and cooking and a recipe for eternal bliss.

On trend Today’s kitchen components offer the opportunity to mix and match colours and materials, and consumers have never had such an eclectic selection of both mediums to choose from in creating floor to ceiling glamour. In furniture, monochrome gloss finishes,

which have been around for some years now and are, according to Whirlpool Brand Manager Juliana Sado, “here to stay”, have been supplemented with new-look wood/wood effect finishes and a plethora of colour combinations which, experiment has proven, lend themselves to bold, avant-garde design.

Richard Walker, sales and marketing director, De Dietrich Kitchen Appliances (De Dietrich and Fagor), says the “big stories” in high-end kitchen design at both Eurocucina in Milan and kbb 2010 were white gloss or contemporary lacquered handle-less kitchens complemented by book-matched natural wood finishes or colour accents. And at the October Grand Designs Exhibition in Birmingham the focus was on pale wood, neutral lacquers and all shades of grey. Meanwhile, in the mid-ranges, he notes the application of rich jewel or citrus colour palettes.

With such a diverse catalogue of kitchen furniture on offer, what works and what doesn’t when it comes to matching domestic appliances to bold designs and colour combinations?

“Stainless steel remains the appliance finish of choice for most kitchen specialists,” says Walker. “It complements all, whether a traditional painted wood kitchen or a contemporary

“The ostentatious statements of grandeur, fancy woodwork and pelmets have gone, and in their place we have comfort, simplicity, warmth and style” Juliana Sado, Whirlpool Brand Marketing Manager

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Idea 7:

An induction hotplate on a freestanding cooker

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Introducing our all-new freestanding collection that’s full of big ideas. Let’s start with our groundbreaking induction technology, which provides a smarter, faster, safer and greener way to cook. And, what’s more, all of our freestanding cookers are manufactured right here in the UK, ensuring the highest quality and the best supply.

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KITCHEN STUDIO

minimalist design. It looks good, does not date, and colour matching is never an issue.”

Whirlpool’s Sado notes that “the Germans and Italians have taken a leaf from the book of international furniture manufacturers and continue to produce stunning high gloss kitchens.” She observes a trend to mix blocks of colour with banks of furniture or appliances in “clean, simple finishes such as white, silver or black,” thus allowing consumers to show their individuality in an understated manner. “White gloss finishes are coming through in appliances,” she advises.

“This is demonstrated by Whirlpool’s recently launched Ambient built-in range.” The white gloss Ambient collection follows the successful launch of Whirlpool’s Glamour range, which sports a high gloss, black mirrored finish.

The De Dietrich cooking collection, available in stainless steel or black, has certain additions in white gloss glass, too: “An ideal complement for ‘statement’ monochrome kitchens,” says Richard Walker.

David Garden, Commercial Director for GE at Glen Dimplex Home Appliances, is of the opinion that we will never see an end to finishes such as stainless steel because of their versatility and ability to complement most kitchen furniture. Gloss, too, remains popular “because it looks expensive, modern and luxurious and updates the look of the kitchen around it.” However, he points out that certain manufacturers are now creating customisable appliances that offer “no limit” to what can be achieved for people who like to regularly update their kitchen colour scheme. GE itself has partnered with plastics company Bartuf Graphics to create customised appliance door panels in individual designs, colours and textures.

Colour and confidence

GET CONNECTED

NOV 2010

“Stainless steel is still king of this market,” opines Neff Sales Director Mike Jarrett. “There is no significant evidence to show that any other colour is anything more than niche,” he argues.

16

“WILDLY ORIGINAL”: CDA’S ‘TIGER’ OVEN

LESS IS MORE: DE DIETRICH’S POWERFUL DOWNDRAFT EXTRACTOR OFFERS A NEAT ALTERNATIVE TO STANDARD COOKER HOODS

But some would beg to differ. Chinese manufacturer is, for many, the main family room and a place for Haier, for example, is rolling out its mirrored glass entertaining guests; hence, it is important that it finishes in cooling and dishwashing collections – some should be well laid-out and attractive. Yet, first and of which are presented in daringly bold hues of orange foremost, it is a work room, a place where utilities are and red – from 2011 onwards. And Gorenje, whose employed and personal time and energy is expended.

Karim Rashid collection incorporates an oven featuring It stands to reason, then, that the design should a full-length vertical bar handle with integrated LED be functional and appliances should offer resource lighting in seven colours, is basking in the retail success efficiencies and convenience benefits. But when the of its recently launched Retro cooling products which chips are down, do time and resource savings sell are available in a broad palette of shades ranging from products, or does ‘style’ sell products? lime green to raspberry pink and ‘royal’ coffee.

Ken Humphrey, Brand Manager for Bosch, says “Bold colours can be used to dramatic effect and functionality is often second to design in order of work particularly well with striking importance and is of the opinion furniture colours, as well as high gloss that consumers will “definitely” finishes and softer pastel shades,” trade up for a more stylish-looking says Gorenje Marketing Manager appliance. Yet Whirlpool Brand Ruth Ferguson. “Retailers should Manager Juliana Sado urges retailers feel confident to incorporate colour to be prudent: “Style certainly adds and adventurous designs in their value, but beware the danger,” she displays as they will attract consumers cautions. “Without functionality and make a great starting point for and sustainability it is a recipe discussions about creating an exciting for disaster. Style affords added contemporary kitchen.” attraction but if it fails to deliver on Rob Burton, Commercial Manager functionality then the credibility of for range cookers at GDHA, says that the brand and the retailer will be colour has always been a key factor harmed.” in homewares and it is increasingly Jane Lee, Product and Category playing a part in kitchen furniture Manager BSH Consumer Products and appliances. “The kitchen is the [small appliances], contends that room where everyone gathers, so it’s “Bosch and Siemens stand for quality the perfect place to experiment with and have a ‘built to last’ reputation, colours and make a design statement,” so people take functionality as read he reasons. “Home makeover shows and then look at style.” and interiors magazines have shown “It’s a catch-22 situation,” says people how to use colour effectively, Rita Balestrazzi, Marketing Manager so today’s consumers are much DARE TO BE BOLD: HAIER’S MIRRORED for Baumatic. “Consumers won’t pay GLASS 3D FRIDGE FREEZER more confident.” Burton also sees the any consideration to appliances that current focus on “green issues” and the don’t appeal to them aesthetically, environment filtering through to consumers’ colour yet they don’t want to compromise when it comes to preferences and “I think we will see more earthy and products’ functional abilities and technology either.” natural finishes such as creams, oranges and blues all Although style will always hold great weight when becoming more popular.” it comes to choosing an appliance, Balestrazzi maintains that consumers want the “best of both worlds” and Does style sell products? the trick is for retailers to offer exactly this in order to It is generally accepted that “kitchens sell houses” secure a sale. She also believes that most purchasers – perhaps never more so than in this era of mediawill be looking for value for money and a guarantee induced imagery and influence which so successfully of quality, “particularly in these times of economic raises aspirations and desires. But creating a statement uncertainty.” But when the decision to invest has been of one’s individuality or personal status, although often made, compromise is not on the cards: “Consumers a criterion (more to come on this), is not, certainly want appliances to look right in their kitchen, and if that for most consumers, the principal objective when means paying a little bit extra then so be it, as long as designing a kitchen. This central room of the home the product ticks all the boxes.”

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07/09/2010 14:58

KITCHEN STUDIO

THE NEW STOVES RANGE IN A STRIKING KITCHEN SETTING

GET CONNECTED

NOV 2010

Appliances in hiding

18

The words ‘style’ and ‘statement’ tend to go handin-hand in the language of kitchen design. Types of products such as side-by-side cooling and range cookers; an eye-catching ‘attack’ of colour, or an arrangement of appliances in towers, banks and in-line installations, all deliver a feast for the eye: a ‘style statement’. But what of those appliances that don’t project the image required for the visually impactful, elegant kitchen?

‘Wet’ appliances such as laundry and dishwashing products tend not fall into the ‘style statement’ category, yet the kitchen is where such products live in most UK households. And while Simon Freear, country manager for Amica in the UK, believes that developments in technology and materials have made even the most “visually boring” appliances more attractive, he concedes that “the utility room more often now paves the way for the modern, statement kitchen by providing a home for functional freestanding products.”

So is the trend for uncluttered, streamlined design driving consumers towards built-in and integrated design in a bid to tuck the utilitarian workhorses of the category away, asks GC? “Now more than ever,” states Gorenje’s Ruth Ferguson. “Definitely,” adds Baumatic’s Balestrazzi.

“The trend for built-in is growing, not only because it helps create a more streamlined feel as appliances such as washing machines and dishwashers look as if they are part of the overall kitchen design, but also because building such items into the design at the planning stage means the space can be used much more effectively.”

Indesit Company says it has seen a “slight” increase in sales of built-in versus freestanding wet appliances over the past five years. At 5% growth, “dishwashers are our most popular behind-the-door appliance,” comments Trade Marketing Manager Gina Gray. “This is because they’re easy to install and quiet enough in operation not to cause a disturbance.” She also notes that the proportion of built-in washing machines sold has increased “very” slightly (up 0.4%), while sales of built-in washer dryers have risen by 2%.

Whirlpool, meanwhile, has found “no evidence” of the migration towards integrated wet appliances, and Samsung’s Senior Product Manager Andrew Jones says his company actually has evidence to counter “the notion” of such products being tucked away behind furniture doors. “Our findings show that consumers recognise it requires a huge effort to have a washing machine in an integrated setting,” he comments.

Furthermore, “GfK research based on the 12 months to September 2010 shows that the built-in washing machine market is down 10% on last year, and built-in makes up only 4% of the market.”

But De Dietrich’s Walker thinks differently: “Given the fashion for smart, streamlined kitchens and the leaning towards open plan living, the current trend is moving in the direction of integrating dishwashers and washing machines behind the door. Both De Dietrich and Fagor offer highly advanced and quiet dishwasher models which have their design attributes on the inside. Door fronts for washing machines are a different proposition as they open out to show the exterior of the machine.” With ‘behind the [opening] door’ style in mind, Walker points out that all integrated laundry products from De Dietrich are available in an elegant black finish and feature blue digital displays, stainless steel buttons and turn and press controls.

Maytag also offers a totally integrated range of ‘hidden helpers’ that bring another dimension to the laundry room. “Added extras add great value for the retailer and a superb laundry experience for the consumer,” says Guillermard. Amongst the range of ‘hidden helpers’ are a pull-out ironing board, laundry care baskets and shelves, pedestal drawers, a rotary iron and laundry sorting baskets. She also notes that retailers have the opportunity increase profit margins by selling kitchen appliances for other rooms of the home too, “from compact appliances to wine cabinets in dining rooms, a coffee machine in the study or bedroom, and warming drawers nearer to the point of service. Options and choices have never been so flexible and adaptable as they are today.”

Future trends The current trend in kitchen design: bold, yet simplistic and elegant, is achieved using a dynamic mix of hues and materials to stunning effect. At kbb 2010, we even witnessed a display of ovens finished in leather, in an extensive range of colours and themes.

So where do we go from here? Are there any new boundaries to cross, or can consumers expect much of the same in the coming years? Baumatic’s Balestrazzi believes that “designs and finishes of the future will continue with the trend for minimal styling, with integrated appliances such as hobs having only a thin trim or none at all so they blend seamlessly into the overall kitchen design. Compact appliances that still boast a generous interior capacity will also become more popular

“There is something undeniably charismatic about the magical combination of big and beautiful, especially when style and functionality dovetail to produce the perfect appliance” Maytag’s Caroline Guillermard, Product Marketing Manager Premium, speaking about the classic American-style fridge freezer

Big ideas Caroline Guillermard, Product Marketing Manager Premium at Maytag, is seeing a much larger picture of products ‘in hiding’: “I think we can say that the trend goes further than just wet appliances – there is a move towards a totally integrated laundry room.”

Maytag’s latest laundry appliances are available in a range of specifications and finishes to suit consumers’ wash requirements as well as their chosen décor. Guillermard explains that they can be integrated into Maytag’s total laundry room concept in which different products are grouped into an “all-encompassing” laundry unit. “Here you have laundry products of the very highest quality and design, blending seamlessly into kitchen furniture of equal calibre. Those who prefer their washing machine and tumble dryer concealed behind a solid door can choose from a range of beautiful, professional finishes: high gloss white, stainless steel, high gloss black or a bespoke furniture door.”

as consumers look to make effective use of their kitchen space and seek a more varied range of cooking methods.”

Gorenje’s Ruth Ferguson, meanwhile, expects to see “very interesting” design trends, with colour remaining in fashion. “Stylish and unusual colours and bespoke lifestyle specifications – in sustainable and energysaving formats – will be the order of the year,” she says.

Ferguson also notes that, with kitchen areas becoming larger and merging into living spaces, “the glamorous wood-grained furniture finishes, textured surfaces and the introduction of glass, all of which work well in living spaces as well as in kitchens, will continue into 2011 and onwards.”

But for CDA, creator of the aforementioned leatherfinished ovens and the daringly flamboyant ‘Tiger’ oven pictured on page 16, it may be a case of boldly going where no man (or designer) has gone before: Tiger, according to MD Ian Kershaw, is just “a taste” of what the company can do. “Our cupboards are full of new and exciting ideas,” he reveals.

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16/09/2010 09:16

SONY’S 3D CHRISTMAS

o e v i t c e p s r e p a new

GET CONNECTED

NOV 2010

3D

20

is the big consumer electronics story of 2010. The increasing availability of 3D hardware at retail, and the growing volume of exciting broadcast, recorded and gaming content, has the format poised for a significant breakthrough into the home entertainment mainstream. For retailers, it is a prime opportunity to drive sales during the vital Christmas period, and to sustain growth into 2011.

Key for retailers looking to maximise the potential are: the ability to demonstrate the stunning visual impact of 3D in-store; the knowledge to explain the full potential open to customers who enter the world of 3D; and a range of high-quality products that cover the broadest range of 3D applications and come with powerful retail support from the manufacturer. Sony has taken a strong leading position in 3D, supporting the uptake of the technology not only with the central element – the 3D TV – but with the gaming, movie content and digital imaging elements that bring a comprehensive, all-encompassing dimension to the enjoyment of 3D in the home.

As we enter the vital Christmas sales season, Sony’s Christian Brown, senior category marketing manager, Home Entertainment answers some of retailers’ most frequently asked questions, and looks ahead to the continued development of 3D as the home entertainment format of the future.

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Where are we now with 3D? What’s available and how can retailers maximize sales of existing kit?

“3D remains a priority for Sony as the market continues to grow and more consumers take to the technology. Sony has recently added two new televisions to its 3D range – the KDL-NX713 and KDL-NX813 – as well as the NEX-3/NEX-5, DSC-WX5 and DSC-TX9 cameras, demonstrating Sony’s commitment to bringing premium 3D hardware to consumers. The award winning 3D BDP-S570 Blu-ray disc player also remains current.

“Content remains key – Sony Pictures Home Entertainment has already released ‘Cloudy with a Chance of Meatballs’ and ‘Monster House’, with ‘Resident Evil: Aftlerlife’ on the horizon too in January 2011. From Sony Computer Entertainment Europe, the hotly anticipated ‘Gran Turismo 5’ 3D game will also be out before Christmas.”

What’s the best way to explain the “3D Ready” concept to customers?

“The best way to explain this is simply that ‘3D Ready’ means the TV itself can display 3D pictures, then consumers will need to buy the 3D transmitter and 3D glasses separately.

‘Full 3D’ means that the TV can display 3D pictures, and the TV comes complete with an integrated 3D transmitter plus two pairs of Sony 3D active shutter glasses.”

How is gaming seen as a key element in getting 3D into homes?

“Gaming is one of the key drivers for 3D technology because gamers tend to be early adopters of new technology. Many gamers will have already used gaming peripherals – including headsets – so will adapt to

elements such as the 3D active shutter glasses that are worn to view the Sony 3DTV. Further to this, the extra ‘information’ the eyes receive about depth and distance through 3D helps the gamer to make splitsecond decisions, enhancing the overall experience greatly.”

What can retailers tell their customers about the immediate future for 3D in terms of content availability and product development into 2011?

“Retailers can tell customers that 3D will definitely remain a priority for Sony into 2011. In terms of the immediate future – a 3D VAIO is planned for early 2011, and it has been announced that Sony Pictures Home Entertainment’s ‘Resident Evil: Afterlife’ will be released on 3D Blu-ray disc on 10 January. “’The Green Hornet’, ‘Priest’ and ‘The Smurfs’ will be released in 3D in cinemas next year, with ‘Men in Black 2’ and ‘Spider Man 4’ to follow in 2011.”

How can Sony support its retail partners in presenting 3D to both early adopters and mainstream customers?

“Sony is very dedicated when it comes to supporting its retailers partners – when 3DTV launched back in June of this year, Sony trained up 500 dedicated in-store 3D demo staff to ensure that consumers – both early adopters and mainstream – were getting to try 3D out first hand.”

Clearly, there is a great deal for consumers to enjoy with 3D, not only from the TV experience through broadcast content and recorded movies, but also through immersive gaming experiences and the ability to shoot and display their own 3D content.

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e on Christmas Some of the outstanding products in the Sony total 3D experience: The BRAVIA NX713 and NX813 3D TVs bring style and connectivity to 3D As 3D entertainment moves out of the cinema and into the living room, these Full High Definition 3D TVs from Sony’s EISA award-winning BRAVIA range give retailers the opportunity to combine 3D capability, connectivity and elegant design, featuring: d

BRAVIA Internet Video – for on-demand online entertainment

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Full High Definition 3D – Just add a 3D Sync Transmitter and glasses to enjoy the 3D experience

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The ultimate style – the slim, elegant Monolithic design concept

As Christian Brown says: “More and more people recognize that 3D will play an important part in the future of home entertainment. And with the NX713 and NX813 you’ll be safe in the knowledge that you’re ready to upgrade to 3D viewing as soon as you decide the time is right.”

The NEX-5 and NEX-3: a new dimension in interchangeable lens cameras

Cyber-shot WX5 and TX9 with 3D Sweep Panorama Sony’s Cyber-Shot compact camera range is legendary for its style, convenience and outstanding picturetaking capabilities, incorporating Sony’s picture-enhancing and userfriendly technologies for professional results without fuss. Now, with the addition of 3D Sweep Panorama, these models give retailers the perfect opportunity to bring consumers into the age of 3D. Users can create their own panoramic images in 3D and enjoy viewing them via HDMI connection to a 3D BRAVIA television.

The BDP-S470 and BDP-S570 3D Blu-ray disc players The highly affordable S470 will be ready to play Blu-ray 3D Disc movies on a 3D enabled TV following a software upgrade.

The S570 has the built-in capability to play 3D Blu-ray Disc movies with no firmware upgrade necessary.

Advanced features include: d

Next-generation home entertainment with stunning 3D action on a 3D TV

d

BRAVIA Internet Video

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Built-in Wi-Fi for easy access to online content

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Enjoy movies & music throughout the home with DLNA & USB connections

d

Entertainment Database Browser from Gracenote®

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Supports both DivX HD and MKV formats

and this Christmas Sony has delivered retailers the products and the support to offer their customers the most exciting world of 3D options.

NOV 2010

Complete with integrated Full High Definition 3D capability and 3D Active Shutter glasses, the BRAVIA LX range puts the full 3D package in the living room without compromise on style, connectivity or picture-enhancing technology.

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The BRAVIA LX TV Series for the full 3D package

These exciting new compact system cameras combine the professional quality, versatility and artistic scope of an interchangeable lens system with the lightness and convenience of a compact camera. They are the first models to feature 3D Sweep Panorama so it’s now possible to shoot panoramic images in 3D and enjoy viewing on a compatible 3D BRAVIA television. A great Christmas story for retailers.

21

WARRANTIES & BREAKDOWN INSURANCE

Special Report

Warranties:

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the state of the art

There has been a powerful shift in UK consumer attitudes to warranties on electrical goods. Regulation and good practice have inspired fresh confidence in warranty products. Tough economic conditions demand prudence and forethought when committing to major purchases. And the growing ascendancy of experienced and dedicated specialist warranty services suppliers in the sector means a better experience for both consumer and independent retailer.

For retailers, the margin and cashflow benefits of point-of-sale warranty sales have become more and more attractive. Yet warranties remain a largely untapped reserve of revenue for the independent sector, says Jeff Griffiths, National Account Director at D&G. JEFF GRIFFITHS, NATIONAL ACCOUNT DIRECTOR

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NOV 2010

T

22

he warranty market has fared better than many sectors in the electrical retail industry over the last couple of years. More consumers turned their weather eye to an uncertain future, opting for the long-term peace of mind a warranty brings to a major purchase. But as fewer consumers have been coming into store since the beginning of this ‘great recession’, total plan sales have remained largely static in the independent sector.

Looking at that another way, that is still £20m of incremental business for electrical independents on top of their core domestic appliance and TV sales.

With warranties retaining a strong retail value, achieving accessory-level margins without the costs and logistics of up-front stock holding, they are the perfect retail product. And with the call-handling, customer service and breakdown logistics all handled by the warranty provider, what is not to like about selling warranties?

Some 2,000 electrical retailers across the UK sell extended warranty products, but their choice of warranty supplier is not as rich as it once was.

Specialist suppliers in ascendancy For some warranty providers, particularly those operating as a branch of an insurance company, servicing a large

number of relatively low turnover independent retailers has become less tenable.Groups such as Allianz have largely withdrawn from the independent electrical retailer warranty sector, leaving specialist warranty services providers to command the UK market. Domestic & General is by far the largest warranty supplier to electrical independents in the UK, with retra’s warranty company Retrasure and US company The Warranty Group also offering solid products for retailers.

The shift towards specialist warranty providers at point of sale has been largely cash-flow related. Unlike TVs and washing machines, with warranty products you do not have to purchase the product from the supplier until well after you have banked the full retail price from the customer.

For retailers this is an ideal scenario and great for cash flow in a cash-is-king economic environment. It is not so good for large insurance companies who are not seeing any revenue until well after the customer’s products have become a risk on the books. For providers such as D&G with over 11m electrical goods products covered by a warranty at any one time, this is simply part of the business model.

In fact, the cash flow benefits are one of the features that make warranties such a compelling product for retailers to sell in the current environment. With providers supplying stores with all the

paperwork, POS materials and dealer support, warranties benefit from a zero up-front stock cost, zero stock holding or warehousing burden and a near-indefinite shelf life. You don’t have to forward plan stock levels, and extra paperwork or POS material are just a free phonecall away. If you had just arrived on planet earth and decided to set up as an electrical retailer, pro-actively selling warranties with your major goods would be a no-brainer.

Variance It is interesting, then, that the level of enthusiasm for, and indeed the success in, selling warranties is so varied in electrical retail stores around the country.

The warranty penetration rate is the number of plans sold against the total number of warrantable products going out of the door. So if you sold no warranties but plenty of major domestic appliances or large screen TVs, that would be 0% penetration, if you talked every customer into a warranty with their new product it would be 100%.

On average, independent electrical retailers who sell warranties manage a penetration rate of around 2.0% to 2.5%.

However, that figure rather disguises the bigger picture and the dynamic range of the highest and lowest warranty sales performers. There are very many retailers that have a penetration rate lower than 2.0%, and even dipping below 1%, while

WARRANTIES & BREAKDOWN INSURANCE

What’s going on?

The e-commerce challenge

Customer demographic has a small part to play in the penetration rate of any one store. Warranty sales are slightly more common on higher value goods and to more affluent consumers, but that is a relatively small influence. The major factor in penetration is the selling staff: their enthusiasm for and skills in selling a warranty product. Big name multiple retail stores - where at the close of a sale staff simply ask ‘would you like to take out a warranty on your new purchase?’ the penetration is around 4%. And in the insurance industry as a whole, anecdotal evidence suggests up to 10% of consumers are very much risk-averse and will buy some form of future protection if it’s simply offered to them.

By comparison to these figures, the 2.0% to 2.5% average penetration of warranties at point-of-sale looks rather lame, with the businesses that get closer to the 10% mark realising more of the revenue potential. Clearly there is plenty of warranty growth potential in most retail stores. The challenge being to get staff truly understanding and believing in the warranty product so they can effectively encourage and motivate customers to buy.

Another challenging area for maximising warranty sales is e-commerce. Those bricks and mortar retailers who have set up web businesses have seen on-line warranty penetration drop to as low as 10% of their in-store levels. The problem here is two-fold: first, many internet shoppers are still buying purely on price rather than overall service, although this is changing as internet shopping becomes more the norm for consumers as a whole; second - and the biggest challenge - is the difficulty of effectively communicating the benefits of the warranty proposition at a point where the time-strapped consumer simply wants to buy the product and click away from the store.

LEE MILLER, DIRECTOR OF WHITES & RETAIL

Research and development Domestic & General is heading into 2011 on a mission to maximise warranty sales through its independent retail partners, both large and small, and through both traditional and e-commerce channels. At time of writing the retail business team, including Nigel Wilkinson (Director of CE and Retail), Lee Miller (Director of Whites and Retail), Jeff Griffiths (National Account Director) and Fiona Lawrence (National Account Director) are examining the company’s retail operation with a view to creating a dynamic and forward thinking retail strategy for the future.

The research phase currently in progress is examining every angle of the retail point-of-sale warranty business from retailer staff training through to the POS material supplied and post-sale customer communications. The team is asking tough questions of various D&G departments, as well as enlisting key retailers to consult on the project. How do we best develop new warranty products

NOV 2010

NIGEL WILKINSON, DIRECTOR OF CE & RETAIL

for the independent sector? How do we best inspire and encourage staff? How do we ensure the best service practices to our retailers? How do we maximise warranty revenue in store? How do we increase warranty penetration for on-line product purchases? How do we make warranty sales as natural and as easy a part of the sales process as ringing the sale through the till?

Engaging our many experts in this sector we will employ creative new ways of driving sales through retail development and new training initiatives, listening to the individual needs of the retailer to maximise effectiveness of the training. We already know that D&G warranties are proven to reduce returns, generate new business and build customer loyalty through our exceptional customer care operation, and we will introduce new marketing initiatives to fully explain these benefits to your potential warranty customers both in-store and on-line. We plan to iron out many of the operational and logistical hiccups that caring for 1.6m customer service calls a year invariably generates, and to offer a fully inclusive, understanding service to retailers. It is a very exciting time for the D&G retail business, backed by a strong commitment to fully realise the revenue and loyalty potential of the warranty market for all our retail partners.

FIONA LAWRENCE, NATIONAL ACCOUNT DIRECTOR

Have you got any comments, suggestions or tips on how to maximising warranty sales? Email jeff.griffiths@domesticandgeneral.com with your idea. The best comments will be featured in a forthcoming D&G warranty article in GC Magazine.

GET CONNECTED

many of the best performing manage 7% or 8% - some even approaching 10% penetration overall. The picture for white goods alone shows even greater variance, with the recent Datamonitor report claiming some outlets hitting almost 25% warranty penetration on products such as washing machines.

23

GEORGE COLE GETS CONNECTED

George Cole George Cole pinpoints hotspots in the world of consumer electronics.

E-mail: georgecole@gcmagazine.co.uk

2011: THE YEAR OF THE TV PORTAL

END OF AN ERA I

NOV 2010 GET CONNECTED

interesting one for viewers who want the convenience of being able to watch live broadcast TV, catch-up TV services and on-demand content on their television,

suspect that many people felt a

and better performance. For instance,

thanks to the arrival of new TV portal

twinge of nostalgia when they heard

a Walkman offered up to two hours’

services. Freesat HD TVs and boxes

the news that Sony was ending the

playback time with a C120 tape, but much

already offer BBC iPlayer – with ITV Player

production of the Walkman cassette

smaller iPods and MP3 players can store

set to join the platform. Humax is planning

player in Japan, although it’s still

thousands of audio tracks.

to launch a TV Portal that will allow

being built in China for other markets,

For me, the cultural change is more

including the UK. In this age of iPods,

significant. Take how the Walkman got to

YouTube and Flickr to be accessed via

MP3 players and Portable Media Players,

be developed. Morita had an idea, took it to

its HDR-FOX T2 and HD-FOX T2 Freeview

it’s easy to forget what a revolutionary

an engineer and a product was developed.

HD products. Before mid-2011,YouView,

product the original Walkman was. The

If the Walkman was being developed

a joint venture that includes the BBC, ITV

demise of the Walkman tape player is

today, it would be subject to focus groups,

and BT, will be launching a raft of catch-up

also a sign of how much things have

who would probably conclude that a tape

and online services including BBC iPlayer,

changed in the past 30 years, both

recorder that didn’t record wouldn’t sell.

ITV Player, 4OD, Demand Five, and pay-TV

culturally and technologically.

There would be engineering meetings,

services that can be received through a

management meetings, marketing

single set-top box.

Let’s start with the technology. When

24

Next year is shaping up to be an

the Walkman was first launched in Japan

meetings, and the chances are that the

in 1979, there were only two mass market

project would be shelved.

services such as BBC iPlayer, Sky Player,

music carriers: the LP and the cassette

The other major change has been the

(the CD wouldn’t be launched in Japan

transformation of the music business. In the

until late 1982). Personal audio was

1980s, the music industry was at its peak in

essentially restricted to pocket radios. The

terms of sales and revenue: the CD arrived

Walkman’s development was driven by the

and so did multi-million selling albums like

late Akio Morita, Sony’s co-founder, who

Michael Jackson’s Thriller. Music played a

wanted to listen to music on long-haul

central role in many people’s lives, and I

IS APPLE KILLING OFF THE CD?

flights, although it was audio engineer

can remember spending hours carefully

That’s the question being asked after

Nobutoshi Kihara who actually produced

producing tape compilations to listen to

Apple revealed that its new MacBook

the Walkman.

on my Walkman. Now, music is just one

Air computers don’t include optical disc

of a number of entertainment formats

technology. This isn’t the first time Apple

like the proverbial hot cake (more than

that include video and computer games.

has abandoned a long-established storage

220 million units have been sold) and the

You can download dozens of tracks onto

medium – it was the first company to

brand name entered the Oxford English

an MP3 player in minutes, and music

drop floppy disk drives from its products.

Dictionary. Although it’s always sad to see

is in danger of becoming a disposable

That said, lots of software and games are

the end of an iconic product, few tears are

item in the eyes of many. It is, indeed, the

still being distributed on optical discs,

likely to be shed over the demise of the

end of an era, but at least the Walkman

so it’s a bit premature to say goodbye to

Walkman, simply because today’s digital

name continues to live on through Sony’s

the technology, both in the computer and

music players offer more convenience

smartphones and MP3 players.

consumer electronics markets.

After a slow start, the Walkman sold

FROM THE BENCH

E-mail: fromthebench@gcmagazine.co.uk

Digital incursions Analogue TV distribution and a misleading symptom, described by Alan Bennett

signal carriers from the rooftop aerial to the bedroom or other TVs – vital for Freeview reception in difficult signal areas. These senders plug into the Scart socket of the equipment at each end of the link and have claimed transmission ranges up to 100m, but in practice it’s generally much less.

ven though we are in the rapid

known and can be overcome by retuning

Both the power and the quality of received

throes of going over to digital

the extension TV sets to a quiet spot in the

pictures and sound can be severely

terrestrial TV, many people,

UHF band then resetting the modulator

impaired in old, solid houses and in ones

even those in areas where analogue

output channel to match, typically done

which incorporate thick concrete in their

transmissions are now just a memory,

by numerical selection of the required

construction. Snow and ghosting on vision,

continue to use co-ax cable distribution

channel on its remote control zapper while

and hiss on sound, are typical symptoms of

systems to pipe analogue carriers – from

in an installation menu. Seldom was there a

propagation troubles with wireless senders.

a satellite box, video recorder or whatever

problem with this.

One advantage they do have over basic

– to TVs in other rooms, along with the

A puzzle can be presented when the

modulators/cable networks is their general

local terrestrial transmissions. It’s easily

same sort of clash pops up with a digital

ability to send stereo sound in reasonable

done by looping the RF output of the

(Freeview) broadcast signal. Here the

quality alongside the composite video

receiver or player back to the input of the

modulated data, carrying several TV

signals. They operate at very low power in

distribution amplifier.

channels, looks exactly like snow when

the 2.4GHz band.

Analogue link-up

AM-demodulated and displayed on the

There are a few wireless senders which

screen of an analogue TV. Thus it is

can handle high definition video signals

This analogue loop-through system works

indistinguishable from an empty channel

interfacing with the HDMI couplings of

well, and the standard-definition picture

until it hits the carrier frequency of the local

video sources and sinks like TVs and

and monaural sound it renders is adequate

modulator, when it superimposes ‘noise’ on

monitors. They are expensive, however: type

for the sort of TVs which are likely to be in

the picture: a noisy picture is shown in the

CWHDI by maker CYP costs £750; Belkin’s

the bedroom or the kitchen. Where older

right-hand off-screen snap below. This can

FlyWire, ditto. They are capable of wirelessly

gear with an RF modulator is replaced by

be very misleading, sending technicians

coupling an HDMI signal over a 30m path.

something new, for instance swapping a VCR

and viewers alike searching for a point

The Gigavideo 800 by Marmitek comes in

for a video disc player without one (though

of loss: duff cable, bad connection? The

somewhat cheaper at about £450. All of

many DVD/VCR combos do have them), it’s

giveaway is continued good reception, via

these will work between any two rooms

possible to buy a standalone modulator with

the distribution cables, of local analogue

in the house and are compatible with HD

channel 21 – 69 coverage from, amongst

and Freeview broadcasts; further proof

broadcast pictures and Blu-ray playback.

others, Keene Electronics. In today’s crowded

comes from disconnecting the aerial when

Even so, now that a decent Blu-ray player

UHF band, full tuneability is important, as we

the ‘noise’ disappears from the local signal.

can be bought for about £200, and since

shall see. This convenient system will outlive

Again, retuning the modulator provides the

Sky offers good terms for a second set-top

the analogue TV transmissions themselves

solution, but it may be more difficult to find

box and the wiring for the latter is relatively

as long as analogue modulators and TV

a clear channel in the UHF spectrum.

cheap, these high prices have tended to

tuners remain. It is supported by inexpensive

limit sales of HD video senders, even where

wireless infra-red remote control extenders

Wireless alternatives

like the Powermid (also available from

The need for an RF distribution system is

of a large HD screen at the receiving end.

Keene) and the Sky Remote Eye, which

eliminated by the various wireless video

The acquisition of such second sets is good

facilitate channel selection or playback

senders on the market, though they have

news for the likes of us!

their use can be justified by the presence

control from a TV anywhere in the house.

Carrier clash

GET CONNECTED

When the RF modulator’s carrier falls on

NOV 2010

E

the disadvantage of not passing on the

or near an analogue broadcast channel coming down the aerial lead, the result is a swirly interference pattern on the locallygenerated image as shown in the left-hand picture (right). This effect is quite well CLASH RESULTS: SWIRLIES…

…AND SNOWSTORMS

25

BACKCHAT

Ruth Ferguson, Marketing Manager for Gorenje UK, is an active, fun-loving ‘handbags and heels’ sort of girl who, happy with her lot, has her dad to thank for her go-getting approach and personal success.

Why did you choose to work in the electrical industry? I didn’t set out to work in the industry, it just happened. But to join such an exciting and growing brand in the UK is definitely somewhere I want to be

Who in the industry would you like to spend time with? Karim Rashid, ora Ïto and Philippe Stark, as I find their work very inspiring

What makes you laugh? My best friend who lives in Canada, I can laugh for hours when I am around her

What was the greatest turning point in your life? I think just one day waking up and deciding I wanted to see what it was like to live and work in new York, so I booked a flight and off I went. It made me realise I can achieve anything I want to

What’s the worst lie you’ve ever told?

A rumour in my old company was that Alex Ferguson, Manchester United manager, was my Uncle. I didn’t deny it

greatest regret? I don’t really see the point in regrets. Things can’t be changed or undone so just take them as a lesson learned and move on How would you describe yourself?

Very laid back and easy going, I don’t see the point in getting stressed. Happy most of the time, and fun loving

How do you think others see you?

Hmmm, well I think my friends would describe me as extremely laid back, imaginative, happy and funny

Is there anything about yourself that you would like to change? no point in worrying about that – just have to make the best of what I’ve got!

geT ConneCTed

NOV 2010

do you have any bad habits?

26

I don’t like to share sweets – some may say I have an addiction

Pet hate? People who read over my shoulder on the tube

Hobbies? I bought an electric guitar a few years ago, and I am a keen runner

If you weren’t in your present position, what job would you choose to do?

Perhaps a cartoonist, or work in fashion – something creative

Favourite TV programme?

What do you daydream about?

I don’t really have one, but I think the Inbetweeners is hilarious

About a lot of things. But right now, about being on a beach with a cocktail in hand

Favourite cuisine? I think it would have to be steak; a nice piece of rare fillet steak

What’s the worst thing that’s ever happened to you?

Favourite holiday destination?

My parents selling the home I grew up in

Somewhere with lots of sun, shopping and good food

If you were offered the opportunity to rule the world for a day, what would be the first change you would make?

Make truth more central to people’s agendas, then perhaps a couple of things would naturally improve… as well as a little more personal responsibility… a better legal system… I could go on…

If you were offered a leading role in a film of your choice, what character would you like to play?

greatest fear? Losing the ones I love What surprises you? The constant innovation in this industry

Who do you most admire? My dad What’s your favourite piece of kit? My digital camera. I take it with me everywhere

What motto do you live by? Life is too short to hold grudges, be angry, get stressed and make mountains out of molehills

Tomorrow I will… …be so grateful that I have all my life ahead of me

It would have to be Carrie in Sex and the City, just so I could have the choice of all the amazing shoes and clothes

Any particular fetishes?

Mulberry handbags & killer heels

do you have any hidden talents?

Coming in the top five in the ‘Run for Life’ race, out of 17,000 people [Not in those heels! – Ed]

What would you put into Room 101?

Croc’s – I think they are hideous shoes

What’s your greatest achievement?

Working in new York and persuading the company I set out to work for to give me a job even when they didn’t have any available

What sort of music do you like?

I can’t stop listening to norwegian Recycling at the moment, and I love American Anthems (can’t believe I have admitted that!)

Favourite quote? Appreciate what you do have, not what you don’t

Who has been the greatest influence in your life? My dad. He is one of my best friends and the kindest person I know. He is the reason I am where I am today and have been lucky enough to do the things I have done

name your poison? French martini

Independent electrical retailer:

“I have to admit I have no idea how things will go this year. My usual annual invitation-only evening with special offers and demos pulled in a good crowd, and there’s plenty of interest in the 3D TV demos and kitchen appliance displays, but much as I’ve tried to use the VAT rise as a “buy now” incentive, customers are cautious. They love what’s here to buy, but I get the feeling the Internet and the multiples may cream even some of my most loyal customers with the crazy price offers. It’s a hard one to call.”

UK representative of global CE manufacturer: “There’s been a lot of pressure this year to maintain market share at any cost on the bread and butter business, and also to get a strong foothold in newer technologies like 3D. But behind it all, I sense a massive global shift in interest towards the potential of the emerging world markets.

The UK and Europe generally are not the priority markets they used to be.”

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Visit us: www.dad-online.co.uk Domestic Appliance Distributors, Henry John House, Unit A, Mill Place (South), Bristol Road, Gloucester, GL1 5SQ

Tel: +44(0)1452 504084 Fax: +44(0)1452 504545 Website: www.dad-online.co.uk

The Independents’ Choice D.A.D is a major distributor of

domestic appliances and consumer

electronic goods throughout the UK. Based in Gloucester, we operate from an 80,000 sq ft, modern warehouse

and are recognised as a significant, reputable and established trade outlet to independent electrical retailers,

kitchen specialists, national multiples, house builders, developers and internet websites.

With a product range including over 40 brands, the choice for our tomers is endless!

cus-

Supporting our Customers...

We supply our customers monthly special offer

booklets and flyers that include up to the minute

Domestic Appliance Distributors Unit A, Mill Place 2 (South), Bristol Road, Gloucester, GL1 5SQ

Call +44(0)1452 504084 Fax +44(0)1452 504545 www.dad-online.co.uk

offers and, when available, end of line models at

fantastic prices.