Get Connected: July 2011

J U LY 2 0 1 1 www.gcmagazine.co.uk

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HIGH STREET HIGH NOON? Retailing in the UK has been savagely reshaped by the recession, and many believe the High Street as we know it has an imminent date with extinction. Is that necessarily a bad thing? And what, if anything, can be done to save the best of the old while embracing the new?

PIANO by Introducing the world’s most advanced and versatile ‘zoneless’ induction hob.

THE GREEN ROOM The impeccable green credentials presented by so many of today’s major domestic appliances are the result of sustained investment and commitment from leading manufacturers. With ecofriendliness now a higher priority in the kitchen, retailers have a powerful new sales tool

PORTABLE CE DEVICES Portable, powerful, stylish and well connected. What is the future for the burgeoning portable consumer electronics devices market?

GROWTH FROM KNOWLEDGE GfK with the figures on what’s selling in portable CE devices

Challenging all previous induction hob concepts, the awardwinning Piano features total ‘zoneless’ cooking for up to 5 pans delivering the ultimate in versatility and freedom. Three hob modes; Expert; Piano and Solo meet all cooking styles.

FULL ‘ZONELESS’ INDUCTION COOKING TOUCH AND PLAY...

The intuitive interface on the full colour TFT screen is simple and easy to use. Individually control time and temperature for each pan with an effortless touch.

FROM THE BENCH

DTiM1000C 93cm Piano Induction Hob delivers full ‘zoneless’ cooking for up to 5 pans SUBJECT TO REGISTRATION

SUBJECT TO REGISTRATION

Alan Bennett considers the optimum conditions for the ultimate viewing experience

BACKCHAT Linsar’s Barry Kick gives a 2-minute interview

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CONTENTS

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

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Editorial Comment

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In and around the industry

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High Noon on the High Street What’s happening to retail in the UK?

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The Product Gallery

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The Green Room

Efficiency in Major Domestic Appliances

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Portable CE Devices

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Growth from Knowledge

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Carrying the Future

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GfK facts & figures on the portable CE market

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George Cole Gets Connected

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From the Bench

Alan Bennett covers the viewing angles

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Get Connected. Greyfriar Cottage, Winchester Road, Chawton, Alton, Hampshire. GU34 1SB www.gcmagazine.co.uk

The Word

Backchat

Industry comment and a 2-minute interview from Linsar’s Barry Kick

The GaGGia GelaTiera:

This summer, help your customers unwind and indulge in delicious quality ice-cream at home.

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uaranteeing great tasting results every time, and easy to operate and clean, the Gelatiera from premium italian brand, Gaggia, prepares gelato in just thirty minutes.

Motorised paddles churn the ice-cream leaving it smooth and creamy and producing a real, authentic italian experience at home.

The Gelatiera perfectly balances a creamy consistency with the distinct classic taste of the finest Italian hand-made gelato. Ready to use in five minutes, the machine has a built-in freezer so you don’t have to re-freeze the bowl and can leave the cooling system on until ready to enjoy.

Robustly built, the machine has the capacity to produce up to 600g of ice-cream and also comes with an additional bowl meaning you can make multiple batches.

Jo Pratt, presenter and celebrity chef, comments: “There is something really indulgent about making your own ice-cream at home and with the Gaggia Gelatiera you can be adventurous with your flavours and seriously impress family and friends.”

To support the launch of the Gelatiera, Jo has created some delicious recipes that are sure to whet the appetite.

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JULY 2011

Editorial & Publishing Director: Terry Heath Telephone: 01420 886 33 » terry@gcmagazine.co.uk

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get Connected

Editor in Chief: Marlinda Conway Telephone: 01420 886 33 » marlinda@gcmagazine.co.uk

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EDITORIAL COMMENT

Marlinda Conway Editor in Chief

GET CONNECTED

JULY 2011

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e’ve always been in favour of reporting the good news in our industry, talking up the positives and finding reasons to look ahead with as much confidence as possible.

As we’ve seen over the past few difficult years, confidence is a key element in the economic health of the country. When consumers don’t have confidence, they don’t spend money at retail. And when people are not buying, the entire economy suffers.

But while there’s little point in being negative and taking delight – as the mainstream press seems to do – in headlines of doom, there is even less point in pretending there’s not a problem. Just a glance through the news pages of this issue of Get Connected is enough to confirm there is a problem that, for our retailers, is at least as acute as it’s been at any time since 2008. We report it because it’s there to be reported, and only by facing the facts with a clear-sighted realism can the industry formulate and execute the best strategies for dealing with it.

The Government seems to have woken up very late to the fact that retail, which is the essential interface in the “real” economy (“the part of the economy that is concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets”), is suffering from difficulties largely beyond its control, and needs support.

There is a lot that can be done, if the will and the expertise is there, to get regulators, legislators, landlords, local authorities, manufacturers and retailers talking together about mutual help. But Governments don’t really have that expertise. It resides in the practitioners, and all the Government can do is listen to them and act on what they say.

In our experience, electrical retailers are among the most astute, commercially aware and self-motivating business people in the country. They are people worth listening to, because they really do understand what

is happening at the grass roots of the real economy, because that is where they are positioned. And they really do have clear ideas, based on solid experience, about what can be done to aid economic recovery.

Having said that, there can be very little doubt that retailing in the UK is undergoing profound and irreversible change, and the traditional model of the High Street simply no longer works for some communities in some locations across the country. New channels, new ways of selling, new ways of engaging consumers and giving them the service, convenience and choice they demand are being opened up. It’s a change that began before the recession, and will only be reinforced as the economy recovers, and any retailer who is not part of managing change will fall victim to it.

So what do you think the Government, and we, as an industry, should be doing now?

Do you welcome the appointment of Mary Portas as the figurehead of a “save our High Streets” initiative, or is it just another celebrity sticking-plaster applied to a problem that’s bigger, more complex and more intractable?

And what about the proposed removal of the law preventing manufacturers from setting a Recommended Retail Price (RRP) on some classes of electrical goods? Anything that takes away restrictive regulation from our industry has to be welcomed, but will it have the desired effect of creating a “level playing field” and helping independents to compete in a price-driven world?

We have gathered opinions from a number of sources (see pages 13-15 in this issue) that may have some readers applauding and others flinging the magazine across the room in anger.

Either way, it’s good to talk. Please do send your thoughts, opinions, ideas and rants to HighStreet@gcmagazine.co.uk. Heaven knows the country and its Government could do with some real guidance from people who actually make, distribute, sell, install, service or repair electrical goods for a living.

Terry Heath Editorial & Publishing Director

Will Dobson Creative Director

James McIntosh Consumer Consultant

Lynne Henry Communications Officer, GfK Marketing Services

George Cole Consumer Electronics Consultant

Graham Southern Advertising Sales

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

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THE WORD | INDUSTRY NEWS

The seven-day period that rocked the retail world

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JULY 2011

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s quarter-day fell at the end of June, chaos reigned on planet retail. The catalyst that accelerated retail collapses at the start of the recession was again seen as instrumental in delivering the final blow that would kill off another round of Britain’s well-known high street names.

In a seven-day period, business failures and store closures at high-profile retailers such as HomeForm (Moben, Dolphin, Kitchens Direct, Sharps), Habitat, TJ Hughes, Thornton’s, Jane Norman and Carpetright threatened staff jobs and consumer confidence.

The Retail Trust charity reported a 300% increase in calls to its confidential helpline in a three-day period from retail employees fearing redundancy. The charity said that the team taking calls, answering e-mails and responding to texts from worried retail staff had seen contacts rise 40% on June of last year, after the aforementioned troubled companies put 10,000 jobs at risk.

Manchester-based HomeForm, which was bought out of administration in 2007 by US private equity firm Sun Capital Partners, was the first of the casualties. The Group appointed Deloitte on 23 June after a funding requirement resulting from a trading downturn could not be secured. Shortly after the appointment, the Sharps Bedrooms division was sold to a new company, Sharps Bedrooms Limited, owned by an affiliate of Sun European Partners LLP. The sale was said to have safeguarded 627 of the 1,208 HomeForm jobs.

Within 24 hours of HomeForm’s collapse, Habitat, which had ventured into selling kitchens and appliances, put 30 of its stores outside London into administration and sold its three flagship stores in the capital to Home Retail Group in a £24.5 million deal.

The heavily indebted Habitat retail operation in the UK was bought in 2009 by private equity group Hilco, which styles itself a “global leader in retail restructuring.”

Habitat said that trading conditions had remained challenging for retailers of bigticket items and a return to profitability for the business in the UK appeared unlikely.

The failure of such familiar retail names prompted consumer watchdogs to warn shoppers to “protect their cash” when making deposits on expensive items.

But the counsel came too late for customers of Kitchens Direct, Moben and Dolphin.

Deloitte warned that, unless a sale of the businesses takes place, 453 customers with deposits totalling £1,530,000 who did not pay by debit card, credit card or finance agreement were unlikely to receive a refund.

A further 921 customers with deposits totalling £2,584,000 “should be able to reclaim the money from their credit or debit card provider,” Deloitte advised.

The operations of Moben, Dolphin and Kitchens Direct were closed down, and at the time of this magazine going to press, the administrators were engaged in “urgent discussions” with key stakeholders and interested parties in an attempt to sell all or parts of the businesses. 557 staff were made redundant and 24 remain employed by the company “whilst matters are finalised.”

On 30 June, discount department store chain TJ Hughes called in administrators after filing an intention to do so three days prior, citing the withdrawal of credit facilities and protection against the threat of a wind-up order application from a supplier.

The chain had only recently, in March this year, been refinanced and sold to its management in a secondary buyout backed by private equity firm and “turnaround specialist” Endless LLP.

Endless said in a statement: “We have provided TJ Hughes with working capital since March when it was about to fail and knew then that pulling it back from the brink was going to be difficult. Trading at the business has continued to be significantly down on last year as a result of difficult retail conditions and the loss of supplier and credit insurer confidence. Sadly, on this occasion, a rescue of the company has not been possible and we will now focus on helping the administrator save stores and jobs.”

On 7 July, restructuring specialist GA Europe acquired Endless’s secured debt arising from TJ Hughes and was appointed to work with administrators Ernst & Young to liquidate stock from the retail chain’s 57 stores.

Joint administrators Tom Jack and Simon Allport stressed that they were still attempting to sell the department store group as a going concern and were in discussions with more than 30 interested parties.

Emmanuel Hembert, principal at global strategy consultancy A.T. Kearney, described the situation on the high street as “a bloodbath”.

“We urged caution about the unexpectedly upbeat retail figures in March and April, and we have unfortunately been proved right,” he said. “Economic fundamentals remain weak and are suffocating consumer spending. March and April were rosy on the surface, but in fact many sectors have experienced a decline in sales for several months in a row.”

Kearney also accused retailers of “eating each other’s lunch”. He said: “In order to continue growing, large retailers are expanding into non-food, putting more high street players at risk. Only the most efficient through the entire value chain [category management, assortment, logistics, store operations, promotions, pricing...] will survive.”

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FULL ‘ZONELESS’ INDUCTION COOKING TOUCH AND PLAY...

The intuitive interface on the full colour TFT screen is simple and easy to use. Individually control time and temperature for each pan with an effortless touch.

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THE WORD | INDUSTRY NEWS

BRC confirms slight rise in retail sales Retail sales increased in June as stores committed to clearance sales earlier than usual, according to the BRC.While food sales continued to slow, general homewares benefited from modest growth, but consumer caution continued to hit big-ticket items.

The monthly BRC-KPMG Retail Sales Monitor showed that, on a total basis, sales rose 1.5% against a 3.4% increase in June 2010.

Noting the spate of shop closure announcements and weak company results in June, BRC Director General Stephen Robertson said the figures were “not as bad as they could have been.”

UK recovery stalls The Office for National Statistics has reaffirmed that UK gross domestic product in volume terms increased by 0.5% in the first quarter of 2011, following a 0.5% fall in the final quarter of 2010. The news confirms that the UK economy is now stagnant, and some analysts fear that an upturn in the second quarter of the year will not come about.

Consumer spending during the three months fell 0.6%, the biggest decline since the second quarter of 2009, while disposable income fell by 0.8% in the same period, following a drop of 0.9% in the fourth quarter of 2010.

Robertson commented that underlying conditions in retail are “still tough” and being masked by a minor revival in non-food sales, driven by price cuts and clearance events starting earlier in the year.

“It shows just how tough times are when total sales growth of 1.5% is regarded as not that bad,” he added.

Shop price inflation up in June Overall shop price inflation increased to 2.9% in June from 2.3% in May, according to the BRC-Nielsen Shop Price Index. Food inflation rose from 4.9% to 5.7%, while non-food increased from 0.8% to 1.3%.

BRC Director General Stephen Robertson said: “Real disposable incomes have dropped the most in 34 years but increasing petrol and energy bills plus low wage rises are the main causes.

“Shop prices are going up much more slowly than the wider Consumer Prices Index.

Overall shop price inflation is being driven by surging world commodity prices, the effect of the weak pound on import costs and higher VAT – all beyond retailers’ control.

“Considering January’s VAT rise, non-food inflation is still very low.”

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JULY 2011

South of England suffers highest number of retail store closures

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Data released by PwC revealed that nearly half of multiple retail store closures recorded in 300 UK town centres during the first five months of this year were located in the South of England.

The report, compiled by the Local Data Company on behalf of PwC, said that UK retailers have closed 20 stores a day on average this year, and showed that the South bore the brunt of the retail downturn to the tune of 1,036 of the 2,156 closures nationwide.

PwC’s latest retail insolvency statistics for Q2 2011, released on the same day, recorded 375 retail insolvencies, a rise of 9% on the same period last year.

Mike Jervis, PwC insolvency partner and retail specialist, said retailers will continue to struggle for the next six months.

Since the start of the recession, financially troubled retailers have closed, or plan to close, an average of half of their store portfolios, according to PwC. Mark Hudson, retail and consumer leader at the firm, said “we are seeing a repeat of the buying behaviours we saw in the second half of 2008. The next challenge,” he added, “is going to be planning sales and securing stock for Christmas. There are going to be some tough negotiations in the coming months.”

Retail profit warnings double Struggling retailers issued more profit warnings in the first half of 2011 than during the whole of the previous year, according to a report released by Ernst & Young.

The business advisory firm said that listed retailers have issued 26 profit warnings so far this year – almost twice as many as in 2009, highlighting the strain on businesses as consumption shrinks under Britain’s ailing economy.

The second quarter of 2011 saw the largest number and proportion of UK quoted companies warning since the peak of 2008.

Alan Hudson, partner and head of restructuring at Ernst & Young UK, said it has been a tough first six months of trading for many listed businesses, and it is no surprise that the retail sector continues to suffer.

“The latest figures show that household disposable income is falling 2.7% year on year, with tax rises, benefits cuts and below-inflation wage increases are really taking their toll on consumers’ ability to part with their cash at the tills,” he said.

The report stated that rising input prices also remain a significant contributor to profit warnings, with the weak economic environment making it harder for companies to pass on significant rises in raw materials.

Ernst & Young said that warnings are expected to stay relatively static in the third quarter, barring a further sharp deterioration in growth or credit availability, before increasing in the fourth quarter of the year.

THE WORD | INDUSTRY NEWS

Best Buy UK losses dampen CW preliminary results Carphone Warehouse, 50% owner of Best Buy Europe, reported in Group preliminary results that Best Buy UK, which opened its first store here in April 2010 and now has ten “Big Box” outlets in the UK, has racked up losses of £62.2 million for the 12 months to 31 March 2011.

The Best Buy UK losses are in stark contrast to Carphone Warehouse Group’s other divisions (overall Group earnings up 67% to £63.3m), and highlight the difficulty Best Buy has had in launching and establishing a specialist electrical retail chain in the UK in the teeth of a severe and continuing economic downturn.

The reported £62.2 million loss is some £50 million more than forecast. The joint venture was always prepared to take a substantial initial hit to establish Best Buy in the UK, but under current conditions, with other specialist electrical chains struggling, speculation over Kesa selling off its Comet operation and a predicted gloomy outlook over the next few years, £62 million may be a hit too far.

Kesa Electricals announced the closure of 17 Comet stores after the chain posted losses of £8.9 million for the year ended 30 April 2011. In its end of year statement Kesa said that two stores traded below breakeven and 31 failed to fully absorb Comet’s fixed cost base.

Despite a positive start to the financial year, trading at Comet over the Christmas and New Year period failed to offset earlier weakness in the market and tougher conditions in the final quarter.

Total revenue fell 6.8% to £1,537.9 million compared to F/Y 2010 (7.7% on a like-for-like basis).

Within days of releasing its year-end results, Kesa Chairman David Newlands confirmed speculation that the sale of the Comet chain was under consideration.

BrightHouse reports double-digit profit rise Rent-to-buy electricals and furniture retailer BrightHouse has posted a 16.4% rise in underlying EBITDA to £39.7 million in the year to March 31. Revenue rose 15.4% to £227.7 million, while operating profit increased to £33.6 million from £24.8 million in the year prior.

Like-for-like revenue grew 9.2%.

The 228-store retailer opened 30 new outlets during its 2010/11 financial year and a further 30 are planned for this year. Chief executive Leo McKee said: “Despite the travails of the High Street, we continue to see customer demand for our products and services remain relatively buoyant. The current financial year has started in line with management expectations and we are working towards delivering another positive year.”

Refocusing HMV Group announces poor results HMV, having refinanced and undertaken a restructuring and refocusing that will see the Group, among other things, expanding its range of consumer electronics products, has announced a profit before tax and exceptional items for the 53 weeks to 30 April 2011 of £18.8 million. Exceptional & impairment charges, however, pushed the Group into total losses of £121.7 million.

Having taken the £111.5 million hit in non-cash impairment charges for the Waterstone’s book store and HMV Canada disposals, the plan is now to refit some 150 outlets by September, in time for the Christmas sales period. With sales of traditional music and video carriers being severely hit by downloads and supermarket competition, the refocused HMV is aiming to create a wider entertainment-based offering that will include consumer electronics hardware, MP3 players, tablets and headphones.

“HMV remains a world-class entertainment brand,” said CE Simon Fox, “and we now have a very clear focus and strategy to drive cash generation and cost reduction, reinvigorate the customer offer and further diversify the Group into the growth areas of live, ticketing and digital.”

Knight Vinke moves to quash Comet media rumour Kesa Electricals’ biggest investor has moved to clarify its stance on the sale of Comet following recent media reports suggesting it is opposed to the disposal.

Shareholder Knight Vinke said in a statement: “We confirm that we have not at any stage said that we would be opposed to a sale of Comet. On the contrary, we would have no objection to Kesa selling Comet today, subject to Kesa obtaining an acceptable price and the process not being drawn out beyond the two to three months that the board has indicated it will take to sell the business.”

The investor added that it would not support any plan to close down or liquidate Comet if there were other alternatives for the 250-store chain and has put forward a plan that it wants the Kesa board to assess while simultaneously considering the sale of Comet.

Both parties expect Kesa should be able to update the market by the time of its annual shareholders meeting in September.

JULY 2011

Dixons Retail issued preliminary results for the year to April 2011 showing a pre-tax loss of £224.1 million. Excluding the £309.4 million impairment charge following the shutdown of business in Spain and writing down the value of online business Pixmania and operations in Greece, the group made a profit of £85.3 million, which was in line with market expectations.

Total sales in the UK & Ireland fell 5% to £3,816.1 million, and like-for-like sales were down 3% across the year. Underlying operating profit for the full year was £71.3 million, a slight improvement on the previous year’s £71.1 million.

The UK & Ireland performance was described by the company as “encouraging in the context of a weak market.”

Comet year-end losses amount to £8.9 million

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Dixons announces £224.1 million pre-tax loss

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THE WORD | INDUSTRY NEWS

Electrolux to implement prices increases in Europe Electrolux has confirmed that it intends to increase prices in European markets to offset the rising costs of raw materials and transport. The company said in a statement that appliance prices will rise by 5% to 7%, effective from 1st October this year.

Samsung forecasts 26% fall in Q2 operating profits Samsung Electronics has forecast Q2

Linsar meets demand for “convenient sized” TV screens Demand from the independent channel has prompted Linsar UK to launch a 26” model into its Titanium LED range.

The new Full HD unit has an integral DVD Player, Freeview, EPG, HDMI and PC inputs. All models in the range have a Plug, Play & Record facility, easy-to-use remote control and come with a 5-year product warranty.

Linsar Director Terry Reed said: “We treat feedback from our loyal customers very seriously and so when demand for a 26” screen was evident due to a gap in the market, we realised the opportunity and moved fast with a solution.”

Built-in appliance leader Neff has teamed up with Macmillan Cancer Support to hold ‘The World’s Biggest Coffee Morning’ on Friday 30th September, hosting a series of events on the day in conjunction with designated kitchen specialist dealers nationwide.

Haier has launched a nationwide UK consumer advertising campaign focusing on its MyZone cooling products. The fourmonth promotion will run in key lifestyle magazines and national newspaper supplements, with supporting online activity and a dedicated website at www.myzonebyhaier.com

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operating profit of 3.7 trillion won ($3.48 billion), a 26% decline on the record 5.01 trillion won recorded a year earlier. Giving its earnings guidance ahead of the release of official results, the company estimated Q2 revenue at 39 trillion won, a 2.9% increase from 37.89 trillion in the same quarter of 2010. No estimate for net profit was released.

Sky freezes subscription prices Sky has announced a freeze on its subscription charges until at least September 2012, saying the move will give customers peace of mind at a time when many other household bills are on the rise.

The price freeze applies to all TV, broadband and talk products from 1st September 2011.

Bosch has been named ‘Best Large Home Appliance Brand’ in the Which? Awards 2011 for the second time. The brand previously won the title in 2009.

Which? has awarded Best Buys to Kenwood’s Major Titanium (KM020), Chef Classic (KM336), kMix Stand Mixer (KMX series), Mini Chopper (CH250) and kMix 1.6L jug kettle (SJM040 series).

Smeg has launched a range of glass splash-backs in 8 colours to complement the brand’s collection of coloured FAB and stainless steel appliances.

Products are available in a selection of heights and widths, in Black, Cream, Red, Pastel Blue, Lime, Silver, Matt Black and Matt White. 

Panasonic moves to close Cardiff TV Design Centre Panasonic has announced that it is considering closing its Television Design Centre in Cardiff and relocating work to Japan in a move which could threaten almost 140 jobs.

The company made the announcement to staff on Friday 1 July and requested that the union enter into a consultation process. The union representing staff at the centre said the announcement came as “a complete surprise.”

In a statement, the company said: “It is Panasonic’s aim for all areas of its business to be profitable and we are looking at options to consolidate our design efforts from Panasonic Manufacturing (PMUK) Television Design Centre in Cardiff to Japan.

“The potential transfer of these business functions will help ensure that Panasonic’s European TV business will remain competitive while delivering high quality with a lower competitive product cost.

“If this consolidation goes ahead, it is likely to have a significant impact on the 138 employees who work within the PMUK Television Design Centre and potentially some shared service support functions. The other business units at PMUK are not affected.

“A period of consultation is now under way. Until this has concluded, Panasonic has no further comment.”

Samsung has launched a £3 million marketing campaign for its flagship ecobubble™ washing machine range. The initiative includes print, PR, TV and digital elements, and focuses the energy-efficient benefits of the appliance.

KEF has kicked off its 50th anniversary activities with a trade-in initiative running until 1 October 2011. Consumers tradingin old speakers of any age and brand at participating KEF retailers will be eligible for a 20% discount off any model from the multiaward winning KEF Q- and T-Series ranges.

THE WORD | INDUSTRY NEWS

“Eco first” for Glen Dimplex Home Appliances Glen Dimplex Home Appliances has

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Headphone specialist Sennheiser has become the first consumer electronics company to join Brand-i, a website directory dedicated to listing approved online stores selling genuine products, which has the backing of bodies such as the Trading Standards Institute and the Industry Trust.

Hotpoint marks its 100th anniversary with the launch of a new microsite celebrating the brand’s history. www.hotpoint100.co.uk contains footage of old ads, facts about the brand, and promotions such as an invitation to post a picture of an old Hotpoint appliance for the opportunity to win a brand new one. Retailers can download a range of posters, bunting, product stickers and leaflets.

Beko has entered into a year-long sponsorship of the LMFM Outside Broadcast Unit ‘Roadrunner’ to support local retailers in the North East of Ireland and drive the Beko brand message to a wider consumer audience. Beko will be promoted on air and online throughout the sponsorship period.

Roberts Radio has introduced its first internet-only radio compatible with ConnectR, the brand’s recently-launched iPhone / iTouch app which is available free of charge from the app store. The new STREAM 105 has an RRP of £100.

For further information: 01892 548468 or e-mail admin@indi.co.uk

Smeg is giving away a genuine England rugby shirt to purchasers of its St George FAB28 fridge in a promotion that runs until 31 October 2011. Retailers are being offered a special display incentive, and a competition for the best St George FAB window display is being held. The winner will receive the funding to kit out a local junior rugby team of their choice.

First new-format Sony Centre retail store opens in Wimbledon Former Wimbledon champion Martina Navratilova and Sony Europe MD Gildas Pelliet (pictured) opened the first new-format Sony Centre retail store on 21 June in Wimbledon’s Centre Court shopping centre. The 128-square metre outlet is the first of its kind in the UK and adopts the new global retail format, designed to help customers personally interact and engage with Sony’s products as they would in a home environment.

The store is totally open-fronted and inviting, incorporates a bright pallet of colours and features world class architecture and design. Its modular layout has product set out for customers to get up close and hands-on.

Roy Dickens, Retail Director for Sony UK, commented: “Sony’s goal is always to exceed customer expectations, and feedback from them tells us that they want to be excited by an interactive and entertaining shopping experience. Our new store concept gives shoppers an opportunity to engage with trained and knowledgeable staff as they play, and to experience the right Sony proposition for their needs.”

The timing, the location and the presence of Martina Navratilova at the opening could not have been more appropriate. The first week of Wimbledon was well underway and Sony was ready to film and broadcast the finals in 3D.

JULY 2011

that will evolve into a useful utility for the public and trade alike.”

To enable both aforementioned parties to get the best from the site, Millington is urging all independents to ensure their details are logged on the search directory.

He is also looking for industry members and affiliates to help with content for the website category pages. The intention is that every category listed will have a facing page containing unbiased information about a particular product area or service, the purpose being to “help the reader make an informed decision and hopefully a purchase decision.”

“We know it is content and relevance that is important and the category pages with the most relevant content are getting the most impressions and clicks,” Millington said.

GET CONNECTED

A relatively new website promoting members of the independent electrical retail and installation industry in a convenient search directory is said to be going from strength to strength. www.indi.co.uk was established

by Phil Millington of The Satellite Shop in Tunbridge Wells in the second half of 2010 as a resource for consumers and trade and now has almost 6,000 industry members listed.

Explaining the concept behind indi.co.uk, Millington said it was an idea he had on the backburner for a few years. “Although many manufacturers, distributors and associations have dealer locators on their websites, they are often difficult to find and use. Indi provides multiple tag searches so an end-user can search for dealers that sell [for example] flat screen TVs and TV aerial installation and are CAI members in London.

“The project has grown considerably in size and we now have a website for the industry

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THE WORD | INDUSTRY NEWS

Doorway to heaven?

A FAB way to go…

A Smeg FAB fridge has been used as the doorway to a “secret” cellar bar in one of London’s trendiest watering holes. The recently opened Breakfast Club on Spitalfields’ Artillery Lane installed the adapted appliance as a covert entrance to its moodily-lit basement bar ‘The Mayor of Scaredy Cat Town’. Customers are invited to walk through the Smeg fridge to discover the hidden jewel, which is already renowned for a range of cocktails including American classics.

The Mayor of Scaredy Cat Town can be found “Behind the Smeg Fridge, The Breakfast Club, 12-16 Artillery Lane, Liverpool Street E1 7LS”

Swan teams up with TV show Come Dine With Me Small appliance brand Swan is to introduce a range of products which it says will be the “must have” in electrical goods in the run up to Christmas. The company has confirmed a licensing deal with ITV Studios for the popular reality show Come Dine With Me and will launch the new collection in September.

The range of ‘table theatre’ items will come with a recipe book and game pack, so dinner hosts can be judged in a manor similar to that of the TV show. Cooks will be encouraged to add their recipe successes and disasters, pictures and scores to the Come Dine With Me by Swan facebook page.

Vax unveils world’s first cardboard vacuum cleaner Floorcare brand Vax is supporting young British design talent with the production of the “world’s first” cardboard vacuum cleaner, designed by Loughborough University student, Jake Tyler.

The Vax ev is constructed for optimum sustainability using recycled and recyclable materials that reduce the burden on landfill. The corrugated cardboard panels that form the body of the appliance are easily replaced if damaged and cost a tenth of the price of an equivalent plastic panel. They are multi-purpose, too, starting off as part of the box the vacuum cleaner is sold in. Once the cardboard parts are separated from the box they ‘pop’ into place around the motor housing.

Components that cannot practically be made of cardboard have been produced from recyclable, pure nylon plastic using rapid process manufacturing rather than injection moulding, so Vax ev can be manufactured locally to order without the need for costly tooling moulds and assembly lines, while avoiding long distance distribution.

Vax is currently exploring a limited production run of the vacuum cleaner.

Yamaha appoints Big Red Sales GDHA looks for the Yamaha has appointed Big Red Sales Ltd to sell its AV products into BRSL’s established dealer network, commencing with the introduction of the company’s Desk Top Radio, Audio Systems and One Bar solutions.

BRSL, which presently handles business for Vogel’s, Sennheiser, Off the Wall and Linsar, reported “record turnover” for the first six months of 2011 – a time described by director John Reddington as “the most challenging period in the 40 years I have been in the Industry.”

With the addition of the Yamaha brand in BRSL’s portfolio, Reddington said he is “confident” that the remainder of the year leading up to the peak season will see increased sales.

The arrangement with Yamaha leaves the Japanese brand in a position to continue to look after its current distribution partners.

See www.gcmagazine.co.uk for the stories behind the news…

 Sony shareholder meeting in Tokyo well attended Sir Howard Stringer expresses confidence in the future

 Retailers face “unjustifiably-high” charges for payment processing Hard-pressed customers switch payment methods

 Samsung announces UK launch date for Galaxy Tab 10.1

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JULY 2011

“Slimmest, lightest and smartest tablet” will hit UK stores in August

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 It’s time to change, says CI(H) chief executive “Let’s get passionate about what we do again”

 “Think Asia, Think Hong Kong” event comes to the UK in September A spotlight on business opportunities…

 Electrolux agrees acquisition of Olympic Group Deal due for completion by August

‘Face of New World’ GDHA brand New World has launched a campaign to find the ‘Face of New World’ as the brand image is revamped in a bolder, stylish and younger fashion. Consumers are invited to compete for the title which will provide the opportunity to become an ambassador for the brand, tweeting and blogging on its behalf and attending interiors exhibitions, design shows, fashion and food events.  Read the full article at www.gcmagazine.co.uk

Electrolux marks first year of Vac from the Sea project Electrolux is marking the first anniversary of its ‘Vac from the Sea’ project with a consumer initiative entitled “A Cleaner Ocean, One Vacuum Cleaner at a Time”.

The Vac from the Sea project involved Electrolux building a number of unique concept vacuums using plastic trash gathered from the sea. Now the mission is continuing with 1.5% of sales from all Electrolux Green Range cleaners sold in Europe going directly to Algalita and its partner organisation 5 Gyres, who together analyze plastic pollution and its severe effects on the marine environment.

The in-store promotion includes new packaging, in-store presentations and films.

RETAIL REVIEW

T

Failure of more high-profile household names, and “evidence” that High Streets are falling into disuse and decrepitude, have sparked a flurry of concern in the general media, and of changing social structures and changing that was already well under way before the gurus have been in demand on TV and radio consumer demands. A High Street that grew recession. The recession simply accelerated and in the papers, giving opinions on what’s organically, sometimes over centuries, to serve and exacerbated a shift in consumer demand wrong with retail, how it might be fixed, and a specific community cannot expect to go on that had begun decades before. The choice to the steps necessary to “save the High Street.” serving it when that community has radically shun the High Street in favour of the quicker, Much of the focus has been on countering changed. Many people don’t work where they more convenient, free parking, once-a-week the effects of the recession, finding fast live any more. In households where everybody trip to the supermarket had already been fixes for shabby high streets, expensive goes to work, there’s no longer a dedicated made by significant numbers of consumers. parking, high rents and rates, “homemaker” for whom lack of public transport. And, of shopping is a task that can be “…the faults in the UK’s High Streets are not course, that perennial argument allotted precious time. There’s a the cause of their decline, but a result of it” about supermarkets and outgeneration that doesn’t actually of-town megastores killing the want to spend time chatting independents. with the butcher and the baker while being The High Street is undoubtedly changing, but But there is a body of opinion that individually “served” with their purchases. we are not at the beginning of a “new era” in believes the faults in the UK’s High Streets There’s a generation that uses public transport retail: we are already a lot further down the are not the cause of their decline, but a result only when there’s no alternative (such as the road of change than that. of it. Poor choice of shops, lack of public commuter train to work) and uses the car transport, boarded-up premises, rents and whenever possible. For these consumers, the The consumer has spoken rates disproportionate to turnover, a general big, single-location, by-car, easy free parking Seen in this light, it’s been suggested that the air of shabbiness and neglect are, some say, decline of some High Streets in some locations trip to the supermarket or out-of-town the results of a change in shopping habits megastore is the natural choice. has to be accepted as a natural process: part

JULY 2011

Gurus galore

Can the UK’s High Streets be fixed, or is the whole concept past its sell-by date? Is there a way back for the “traditional” British retail experience, or have the new needs and habits of consumers already evolved to the point where it can no longer satisfy their 21st century demands? Get Connected takes a look at these complex questions, with the help of opinions - probably controversial - gathered from inside and outside our industry.

get Connected

here’s been more blood on the pavements. Names such as Habitat, HomeForm (Kitchens Direct, Moben, Dolphin, Sharps), T. J. Hughes, Jane Norman and Focus have bitten the dust. Dixons has taken a huge hit on closure of its operations in Spain. Kesa was reportedly thinking of selling Comet and pulling out of the UK. As well as this fresh crop of retail failures and difficulties, there has been a rash of reports charting UK retail in crisis: the BRCKPMG Sales Monitor for May showed a likefor-like drop in sales value of 2.1%, providing a “more realistic reflection of how tough conditions on the High Street really are”; the influential Item Club has predicted ten years of hard times and slow retail growth; and a uSwitch.com survey of consumers showed that only 6% of shoppers remain loyal to their high streets, with boarded-up shops, lack of choice, expensive parking and generally “shabby” appearance being cited as the main turn-offs.

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RETAIL REVIEW

BOARDEDUP SHOPS ARE A HIGH STREET TURNOFF

And this is also the generation that has taken to the convenience and price advantages of online shopping in a big way.

Advertising and business communications expert Sir Martin Sorrell said in a recent radio discussion that, while the recession may not have caused the boom in online retailing, it has accelerated “the rise of the clicks.” He added that “this is an e-commerce country,” and predicted that in the future most nonfood products will be sold on the Internet.

Electrical retailers are well aware that the only differentiator that currently matters on the internet - price – has already shaved margins to, or even beyond, zero, and is giving consumers unrealistic price benchmarks that “proper” retailers – those who give real advice, quality service and after sales support – cannot possibly match. Unfortunately, consumers who find a bricks and mortar specialist retailer unwilling to match web prices assume that he is just “profiteering.” If only they knew!

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JULY 2011

Any answers?

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So, with these seismic shifts in the retail landscape already well advanced before the recession, should we be looking at how to save Britain’s High Streets in general, or accepting that some cannot survive in their present form, and instead focusing townby-town, High Streetby-High Street, shop-byshop on what individual communities want and how it can most profitably be delivered? There is no onesize-fits-all national solution.

The local, more detailed, custom-designed solutions will have to be found locally by local retailers, residents, local authorities, landlords and business associations working together for mutual benefit.

What works in Harrogate may not be the answer in Harlesden or Harwich, and anyone charged with a national plan to “bring the bustle back to our High Streets” is going to have to engage

all participants at local level and be prepared to entertain a large number of tailor-made solutions. Does any “guru” have the stamina or the capacity for local detail to do that – let alone the grace and modesty to admit their own pet ideas will not necessarily be the best in every situation?

There are still thriving High Streets with great independent stores providing excellent service all around the UK today. From leafy rural and suburban locations to big city shopping enclaves, there are retail operations grouped into a recognisable High Street format that are serving their specific communities extremely well. Some village and small town High Streets remain the hub of communities that still recognise themselves as such, rather than as a random collection of nameless people who happen to live next door to each other and have to catch the train to work every morning.

In major cities – London is a prime example – many “village” communities have sprung up grouped around an urban High Street that provides the immediate area with what estate agents like to call a “vibrant local scene.” The restaurants, bars and independent specialist retailers provide the goods and services young professionals want, at the time they want them – and all within walking distance in a city where getting about by car is not a brilliant everyday prospect.

Clearly, High Street successes like this that have grown organically in response to community demand can’t be simply replicated and imposed on other communities across the country. There has to be some local reference to what people want. However, finding that out is not as simple as just asking them.

Saying and doing Remember Woolworths – the high-profile failure that first brought the public’s attention to the fact that something bad was happening in retail? There was an outcry because a loved and old-established brand had been toppled, and nostalgic regret at the passing of a retail icon led the public to demand that “something should be done about it.” The majority of people, asked if they wanted to see Woolworths back on the High Street, said “yes.”

But would they have started to shop there more frequently and spend more money there?

LOCAL COUNCILS MAKE SHOPPERS PAY BEFORE THEY EVEN GET TO THE SHOPS

Woolworths’ demise was a clear indication of the difference between what consumers say they want and what they actually do. They were sorry to see it go, but had clearly already voted for its demise with their feet - and their cash – by not shopping there enough or spending enough of their money to keep it going. An example of consumers’ serial reluctance to do in practice what they like the idea of in theory.

Similarly, consumers say they love the idea of a High Street with plentiful cheap or free parking, regular bus services, a family butcher, an artisan baker, a wet fish shop and a grocer selling fresh produce, plus friendly, helpful specialist retailers who can advise them on consumer electronics and major domestic appliances. They even say that if their High Street were like that they would use it more.

But in most cases these are the very people who have driven the butcher, the baker and the specialist independent off their High street by choosing to shop at the supermarket and the out-of-town big stores, and are now complaining that the High Street they’ve shunned is looking tatty and doesn’t have a great choice of shops.

So beware of asking consumers associated with a failed or failing High Street how it could be revitalised. Check the history in a little more detail to find out how the community’s relationship with its High Street has evolved.

Not a mile from this office there’s a market town with a High Street dominated by charity shops, estate agents, banks, building societies and coffee chains. There used to be three family butchers, five fruit and veg shops, seven independent electrical retail/ repair outlets and branches of two multiple electrical retailers. Now there’s one of each, all struggling to survive.

A major supermarket with massive free parking facilities opened within a stone’s throw of that High Street some years ago, and it was argued that it would bring more footfall to the town and boost local retailers. It is now common for local residents to drive to the supermarket to do their shopping, but never, from one years’ end to the next, take the one minute’s walk to the High Street, because they believe there’s nothing there that they want.

I’m not saying the supermarket killed the High Street, because the community had already evolved into a dormitory town for London workers and the “local” feel was breaking down.

But given the opportunity, local shoppers jumped at the chance of one-stop shopping and convenient, free parking.

This is by no means the counsel of despair for independents. There is still enormous scope for good independent retailers to thrive and prosper on the strength of their

RETAIL REVIEW

“The decline of some High Streets in some locations has to be accepted as a natural process”

Mary Portas, celebrity guru and retail expert (her track record is impressive and nobody can deny that, within her own disciplines, she knows what she’s talking about), has famously been called in by the Government with the composite national mission of “addressing the problem of vacant shops; adopting new business models for the high street that fit the needs of the modern shopper; preventing the proliferation of “clone towns”; and increasing the number of small and independent retailers doing business in local town centres.”

She comes with a reputation for delivering forthright, acerbic advice and insisting on her own ability to find the right answers to retail problems. She is on record as saying that big supermarket chains have killed off too many High Street traders. She has a personal track record of retail success. But it is difficult to assess how all that might translate into helping independent retailers, since most of what we know about her as a retail adviser is based on her TV persona, edited to entertain rather than deliver serious professional advice. However qualified their stars might be, “business”

Removing the RRP ban: will it help?

TATTY HIGH STREETS SHOWING SIGNS OF NEGLECT

For thirteen years the electrical industry in the UK has suffered from a law prohibiting manufacturers of a range of electrical goods from publishing a Recommended Retail Price (RRP) for those goods, and from

THE DESOLATION OF THE HIGH STRE

ET CAR PARK

having a free choice about which retail outlets they supply those products to. In 1998 it was seen as a pro-consumer, procompetition law, but times have changed, and to the relief of many independent retailers the OFT is recommending that the Competition Commission removes the ban on manufacturers giving a Recommended Retail Price on electrical goods.

The move has been welcomed as creating a “level playing-field” for independents, who have suffered from price-cutting competition they can’t hope to match, and who have lacked a consumer-credible benchmark to prove to their customers that they are not “profiteering” by charging what is in fact a reasonable price for the goods they sell.

The removal of the ban on RRPs is to be welcomed, but comes with a warning. As one independent retailer said to Get Connected: “It is a massive relief to know that RRPs may be back soon. It gives us a reference point, and a better chance of making a living margin. But it is still a recommended retail price, and it will only work if manufacturers are prepared to take action by refusing to supply retailers who deviate blatantly from it and cut prices ridiculously. We all know that the biggest differentiator in e-commerce is price. It’s all they’ve got over proper electrical retailers, and if that’s taken away from them, it will theoretically be a huge help to my business.

“We’ll have to wait and see how many manufacturers are really prepared to forgo volume and the Holy Grail of market share by preventing the volume retailers from selling their products too cheaply. I have more than once had the impression over the past ten years that some manufacturers have hidden behind the ban on RRPs, claiming to retailers like me that there’s nothing they can legally do to stop the cut-price merchants from ruining the consumer electronics market. Now we’ll be able to see who steps up to the plate.” * If you agree with, are outraged by, or want to express any reaction to the opinions contained here, email: HighStreets@gcmagazine.co.uk.

We’re open for debate and will publish as many of your views as we possibly can in the interests of helping the electrical retail sector live long and prosper.

JULY 2011

Oh Mary Portas, what shall we do?

programmes such as Portas’ series, “The Apprentice” and “Dragon’s Den” are essentially light entertainment, not intended to be educational or commercially detailed.

She is currently, we believe, on holiday while a team of civil servants carries out the information-gathering exercises and surveys that she will need to do her work, and while her website gathers ideas and suggestions from the public and from retailers. It is, as we have noted, unlikely that there is any overall national solution to be identified by any guru, however experienced. From the evidence of her TV series, she is good at telling retailers they need to understand their customers, to make the shop look good, to know their products, to smile a lot, be enthusiastic and welcoming and make sure their hair is combed and they have a clean shirt on. All great basic retail advice, but among the surviving independent electrical retailers on the High Streets of Britain today, none of it is a revelation.

And while Ms Portas did make a visit to Tesco prior to her holiday, it is difficult to believe that – even with her celebrity and experience behind her – she can have one iota of influence on the business model of the UK’s most successful retail organisation.

The law of the retail jungle is already in place: big manufacturers and suppliers boss smaller retailers; big retailers boss everybody.

We hope as fervently as anyone that this turns out to be more than another publicity stunt by a government that doesn’t know what to do, and calls in a “celebrity” to demonstrate that something is indeed being done. How long does it usually take for the celebrity “tsar” of this or “guru” of that to cease to be associated with their Government task?

It’s a trait of most Governments that, faced with a problem they’re not qualified to deal with, they announce a review, or a Public Enquiry, or a Royal Commission, or something that will take so long that either people will have forgotten about it, or the problem will have gone away, or the consequences have arrived so there’s no point in doing anything about it because it’s too late. This time, there is urgency. As the British Retail Consortium’s director general Stephen Robertson so appositely says “action, not reviews” are what’s needed now. And the most effective, most knowledgeable, most vigorous action can only be taken by those involved: by retailers, local groups and their business partners.

GET CONNECTED

superior quality, service and knowledge.

There are strong arguments for encouraging and helping independents by looking at local planning regulations pertaining to big store applications, for talking to landlords about realistic rents and to local authorities about decent parking, reasonable business rates, good public transport and promotional events. But these things, important as they are, will only help “bring back the bustle” if there is a local community that is receptive to the benefits of High Street shopping.

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Geneva Model M iPod/iPhone dock system The Geneva Sound System Model M is a complete bookshelf sized stereo system in a single cabinet. The compact model with LED display houses two Hi-Fi speakers and uses patented technology to deliver true stereo imaging. It is finished in piano-lacquered wood in white, black or red and holds an RSP of £550.

2 x 1” tweeters / 2 x full-range 4” woofers / 2 x bass ports

4 x powerful Class D digital amplifiers

Digital radio with 6 presets / Digital clock with alarm

Stereo mini line-in jack

TouchLight controls / Remote control

0843 2897195 www.sav-distribution.co.uk

Dimplex Bingham electric fire The contemporary-styled Dimplex Bingham has a clear glass casing providing a three-way view of the brand’s Opti-myst flame and smoke effects. The unit creates a dramatic and safe focal point for homes and commercial settings and is also suitable for corner installation.

Independent flame and heat / Variable flame effect

Long lasting dichroic Xenon bulbs

Remote control operation

0845 601 5111 www.dimplex.co.uk

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JULY 2011

Loewe Xelos LED TV

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Loewe has developed its Xelos TV range with the introduction of LED backlight technology. The Xelos houses DVB-T and DVB-C tuners – a DVB-S2 tuner can be fitted on request – and comes in 32- and 40-inch screen sizes with a range of display options. Products are available to order now in Black or Chrome Silver finishes.

RSP £995 and £1,590 respectively.

100Hz moving image display

Multimedia functions

USB recording / CI Plus interface

Loewe Sound System+ (2 x 20W integrated speakers)

01294 315 0000 www.loewe-uk.com

Whirlpool ARC 229 wine cellar

Samsung SS7550 Series stick cleaner

Whirlpool’s new ARC 229 in-column wine cellar is an electronically controlled unit that maintains a stable temperature and consistent humidity. Low vibration dampers and a glass door with ultraviolet protection ensure the safe storage of wines.

Samsung’s new 2-in-1 cordless vacuum cleaner combines a powerful, lightweight upright with a detachable handheld unit. The appliance has a motorised power brush with pick-up booster and corner-cleaning feature, and is suitable for upholstery, hard floors, rugs or carpets. SRP: £139.99

Five oak shelves hold up to 46 bottles

Internal temperature range 6° to 18°C

Elegant ‘Fusion’ design with integrated handle

0208 649 5000 www.whirlpool.co.uk

18.5-volt lithium battery

Twin-chamber cyclone

Twin filtration system with washable HEPA filter

Available in black with blue accents or white with blue accents

01932 455000 www.samsung.co.uk

THE PRODUCT GALLERY

Panasonic LUMIX GF3 DSLR Weighing just 225g, the LUMIX GF3 is the lightest and smallest of Panasonic’s interchangeable lens LUMIX G system cameras. The product produces highquality photography and AVCHD Full HD movies and automatically focuses shots in up to 0.18 seconds. It has an aluminum chassis, easy-grip handle and comes in a choice of black, red, white or brown.

Intuitive 3-inch LCD touch screen

12.10-megapixel Live MOS Micro Four Thirds sensor

High-end image processor

Face Recognition / Intelligent Scene Selector

01344 862444 www.panasonic.co.uk

Electrolux ENL60710X American-style fridge freezer The Electrolux American-style fridge freezer with in-door water and ice dispenser is a no frost model that keeps perishable foods in the correct climate. The appliance incorporates a SpacePlusTM extra-large vegetable drawer which uses humidity control to preserve the natural texture of produce. A full-width dairy compartment is conveniently placed in the fridge door and a full-width wine rack in the fridge compartment.

Intensive cooling with auto switch-off / Fan air circulation

Electronic temperature controls with LCD display

2 large salad drawers with humidity control / 3 adjustable glass shelves

2 freezer drawers, 3 freezer shelves and 4 freezer door shelves

08445 611611 www.electrolux.co.uk

Beko DPU8360 ‘Dry and Save’ condenser dryer Beko has extended its ‘Excellence’ laundry range with the launch of the DPU8360 8kg ‘Dry and Save’ condenser tumble dryer. The appliance has an A+++ energy rating and is powered by heat exchange technology.

15 sensor-dry programmes

Interactive LCD display

Dryness-level indicator light / End of cycle buzzer

SRP: £449.99

0845 600 4911 www.beko.co.uk

80W RMS stereo sound

Clearsound™ technology

Input for USB flash drives / 2 x auxiliary inputs / Video output (composite)

Fully-featured RF remote control

Large graphical OLED display / Quick access to favourite stations via presets

0845 1489001 www.pure.com

GET CONNECTED

The latest launch from PURE, the Sirocco 550, is an internet-connected micro hi-fi system with digital radio, FM, CD and iPod/iPhone dock. The unit provides streaming of digital music collections, access to PURE’s online portal ‘The Lounge’, and is part of Apple’s ‘Made for iPod’ and ‘Made for iPhone’ programmes. SRP £349.99.

JULY 2011

PURE Sirocco 550

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H

E

GRE

E N RO O M

T

THE GREEN ROOM

Energy efficiency and sustainability are key priorities for manufacturers of kitchen appliances and the European labelling system is now “catching up” with the extraordinary developments in the performance of products. But opinions differ on whether consumers have really taken the ‘eco’ message on board; whether their hearts are sold on price and style, or whether saving money in the long term and conserving the earth’s precious resources provide enough motivation to buy the very best energy-rated appliances.

The value of R

Freestanding, energy and resource-saving technology still has to justify itself and demonstrate a return on investment. “Most of us simply don’t recognise what is going on behind the control panel,” he says, adding that technology has to be translated both into consumers’ language and tangible savings.

“Resource-saving appliances deliver high rewards for consumers, who have never had such amazing technology at terrific prices as they do today.”

Whirlpool’s ‘Pocket Vs Planet’ survey revealed that, even during these challenging economic times, 57% of people feel that the impact on the environment is as important a consideration as getting the best-value deal.

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JULY 2011

esearch carried out by refrigeration specialist Lec confirmed that price was indeed the most important aspect in the purchase decision. However, as Commercial Director David Garden points out: “Of the 1,000 consumers we quizzed, 90% said that a product’s energy rating and eco credentials are essential. In fact, when asked to determine the most important factors in the purchasing decision, price was followed closely by energy efficiency and functionality.”

A high level of design, followed by technology and then price is how Whirlpool views consumer perceptions. According to Dean McKelvie, Product Marketing Manager

AMICA’S COMBI STEAM OVEN INCORPORATES A ‘RAPID HEAT’ FUNCTION

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And when it comes to purchasing, low energy and water consumption are high on the list.

“We are getting there, but there is still a way to go to persuade the rest,” says McKelvie.

His remarks are echoed by Maytag’s Caroline Guillermard, Product Marketing Manager Premium, who comments that manufacturers are wholly committed to the relationship between product and the environment; however, “we have a long way to go to convince the consumer. Concerns about the environment are changing, yet consumers are still persuaded by price, style and brand values and this isn’t going to change as quickly as we’d like.”

Hotpoint Brand Manager Iain Starkey, while agreeing with Guillermard’s view, is keen to highlight the fact that GfK charts show that, in some cases, energy efficiency and lower running costs are the most important reasons for purchase. An opinion shared by Hoover Candy Marketing Director Steve Macdonald, who – although registering evidence that suggests people are delaying purchases and conserving their cash – believes that when they do decide to spend they expect their money to go further, “not just at the point of sale but also to continue to provide savings throughout the operational life of the machine.”

“For the UK consumer, a good reliable brand name still takes precedence over green credentials,” asserts Neff Sales Director Mike Jarrett. “From our studies, people are definitely interested in energy-efficient appliances but do not want to pay a premium for the privilege of owning them. This is set to change in the future as the subject goes higher up the political agenda with

“The appliance industry has always been excellent at delivering innovation, but not so good at maximising its promotion”

the arrival of EU regulations on the greening of appliances. Design is very important to customers, as are price, reliability and quality.

After that comes energy efficiency in the priority rankings.”

Jarrett points out that from July 2011 it will be illegal to sell any B-rated cooling appliances in the UK and from 2012 A-rated cooling will not be allowed either – the minimum will be A+. “At Neff, we have ensured that all our cooling appliances will conform to the regulations well in advance of these dates as the lowest rating currently in the range is already A+. From 2012, there will be no choice but to purchase energy-efficient cooling appliances and, in our opinion, this will set a precedent for the [MDA] market as a whole.”

Labelling

difference between what actually constitutes an A-rated appliance. The new label should help clarify the differences between A and A+++ product.”

But Whirlpool’s McKelvie, although welcoming the consistency the label should bring, asks: “How far will the pluses go?” He has a point. Beko, for example, is currently promoting its WMB81445L washing machine as A+++++ rated – two pluses beyond the scope of the new system. Head of Product Buying Les Wicks says the 8Kg machine produces a 50% energy saving on a 60˚C cotton wash, compared to standard A-rated models, and washes two loads for the price of one.

Overall, suppliers see the move to again harmonise the appliance labelling system as beneficial. Lec’s David Garden says: “I think these are positive steps and will ensure that factual figures regarding energy credentials are stated and regulated on product. At Lec we have created a good brand message on energy efficiency in conjunction with the Energy Savings Trust and continue to develop

our range in line with tightening regulations.

There will be, in my opinion, some interesting developments from other brands and some key decisions taken over the next 12-18 months as energy regulations come into force.”

For Maytag’s Guillermard, the positive ‘plus’ sign [as opposed to the earlier proposed ‘minus’ sign] and the mention of annual consumption are all good steps to make the label more meaningful. “It will deliver market transparency and hopefully help consumers make an informed purchasing decision, which we all hope will translate into sales.”

Use of the new label will be mandatory from 30 November 2011 on refrigeration appliances and from 20 December 2011 on washing machines and dishwashers, although voluntary use of the new format before the aforementioned dates is encouraged.

Dealers will have to ensure that products displayed or offered for sale show the label in a clearly visible manner. Appliances placed on the market with the old label before the mandatory introduction dates can be displayed and sold at any time.

JULY 2011

APPLIANCES OPERATING IN SYNERGY: WHIRLPOOL’S GREENKITCHEN 2.0™ CONCEPT

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As the development of energy-efficient products powered ahead of expectations, the European Energy Label failed to reflect the progression of technology, leading to inconsistencies across the system and consumer confusion as to which products really are the ‘greenest’. As Smeg Product Development and Training Manager Joan Fraser notes: “The system was not designed and set up to allow for performance improvements. Hopefully,” she adds, “the new system will provide the long-overdue clarification, with inbuilt future-proofing.”

The new EU energy label for kitchen appliances will, as per the previous version, have set classes ranging from the most inefficient to the most efficient, but with ratings up to A+++ in all product sectors.

It will also contribute to consumers’ ability to make a more informed decision as the washing machine label, for example, will show the annual energy consumption in kWh (no longer per cycle), and contain pictograms highlighting selected performances and characteristics such as noise emissions in decibels; spin-drying efficiency class; capacity in kilograms and annual water consumption in litres.

Hoover Candy’s Steve Macdonald is hopeful that the new system will make it easier for consumers to make a direct comparison between competitive products, “particularly at the top end, where there can be a significant

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THE GREEN ROOM

In the meantime, it should be beneficial to all concerned if all suppliers would abandon the intermediate ‘A-‘ rating in communications in order to promote consistency at these early stages.

UK trailing behind Gas and electricity costs have escalated in the past two years and, according to energy suppliers, there is to be no letup in the foreseeable future. Households are increasingly stretched by this additional burden on their budgets, but while there has been a widespread move to switch off lighting and appliances at times when they are not necessary and to demonstrate frugality in the use of home heating, Neff ’s Mike Jarrett rightly remarks that, when it comes to being ‘green’, the UK is still lagging quite a long way behind most other European countries.

“We need to raise awareness both at trade and consumer level to change the consumer’s mindset on the subject of energy efficiency,” he comments. “The importance of long-term cost savings in terms of money in the pocket should be emphasised more clearly, especially in these recessionary times when every penny counts.”

“To accelerate uptake of energy- and water-efficient appliances we need to drive home the importance of smart consumer choices through marketing,” comments Graham Bremer, Head of Marketing at Electrolux. “This,” he says, “includes highlighting cost savings – the follow-on value of going green. Strong sustainability messaging generates results.”

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The result is that food is preserved properly and stays fresh for as long as possible.

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Bremer adds that Electrolux is proactive in helping to raise awareness of eco-issues with consumers. “Two examples of these are our informative web site www.electrolux.com/ ecosavings and our “Vac from the Sea” initiative to get plastic waste out of the world’s oceans and into home appliances www.electrolux.com/ vacfromthesea.”

Smeg’s Joan Fraser believes that energy efficiency and environmental assets should regularly form part of the training content delivered by manufacturers and, where possible, tangible benefits such as average water and energy saving per month/year should be illustrated. De Dietrich Sales and Marketing Director Richard Walker is in agreement, pointing out that both his brands, De Dietrich and Fagor, offer “full hands-on product and sales training in which every aspect of the appliance is considered together with energy savings.”

Samsung, too, stresses the importance of regular and effective training to ensure retail staff have the tools needed to articulate the various product benefits. Marketing Manager Andrew Jones says “the key for manufacturers is to communicate the overall savings that can be made by investing in a green product.

For example: how many pounds per week or month the consumer will save in running costs, or how much less they can expect their energy bills to be.”

Additional benefits

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The benefits of resource-saving appliances go far beyond conserving water and energy.

Whirlpool, for example, worked out that the average UK household could save around £193.20 per year with the brand’s new Green Generation refrigeration technology. The calculation was based on information from WRAP (Waste resources & action programme)

which suggests that the average household disposes of £420 worth of food every year – 46% of this is fresh food, which could be kept for longer in the correct refrigerated conditions.

In a second example, Whirlpool notes that its Detergent Dosing Recommendation system, present in Green Generation washing machines, could save up to £249.00 over the lifecycle of the machine. Dean McKelvie explains that the figure is based on the concept that consumers overdose detergent by as much as 45%.

“ ‘Go green’ messaging remains a powerful selling tool for retailers” Providing an alternative example of savings, Siemens Brand Manager Jane Massey says: “In the UK we are still using 15.4 million outdated fridges, freezers and washing machines. If everyone living in the UK switched their current washing machine to an A-rated Siemens appliance, we would save enough CO2 to fill more than half a million Olympicsized swimming pools.” Massey also points out that Siemens dishwashers can save up to 39 litres of water per load, compared to washing up by hand.

The key eco messages for retailers at the point of sale, she says, “are to acknowledge that today’s new super-efficient appliances are, by necessity, slightly more expensive to purchase, but choosing an ecologically innovative appliance will more than pay off in cost savings in the long run. In addition to

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Professional cooling technology keeps food quality and nutrition at its best AEG’s ProFresh NoFrost combi-bottom fridge freezer range keeps 99% of the moisture in food for a week, for superb freshness and quality, while using 20% less energy than A-class models.

Cooking like a professional means having the best ingredients. Keeping those ingredients at their best between weekly shopping trips, though, is a challenge. Standard no-frost fridge freezers have just one cooling system, resulting in extremely dry air in the fridge compartment which dehydrates food and compromises freshness and quality.

AEG’s ProFresh fridge freezers, however, have two separate cooling systems. This means that temperature and humidity in the fridge compartment can be optimised.

Neue Klasse design The ProFresh Plus fridge freezer is also in the Neue Klasse design family, which suits modern kitchens and lifestyles.

AEG Trade Sales: 08445 610610 www.aeg.co.uk

Confusion cooking?

energy savings of up to 75% compared to the average 15-year old appliances, today’s new greener appliances generally offer significantly superior features. For example, our engineers are constantly working on innovative solutions for reducing power and water consumption.

Siemens’ Zeolith drying system for dishwashers (energy efficiency A-30%) is a great example of the groundbreaking innovation that is possible, even in categories that already

“People are definitely interested in energy-efficient appliances but do not want to pay a premium for the privilege of owning them” feature extremely efficient appliances. In fact, Siemens’ iQ700 dishwasher with Zeolith drying is the world’s most energy-efficient dishwasher.” Siemens also lays claim to producing the world’s most energy-efficient tumble dryer, which over a 5-year period could save up to £450 on running costs.

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JULY 2011

Maximising promotion

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Point-of-sale materials are an essential aid to raising eco-awareness and educating consumers in-store; however, Beko’s Les Wicks believes more needs to be done: “The appliance industry has always been excellent at delivering innovation, but not so good at maximising its promotion,” he contends. “Manufacturers and retailers alike issue increasing amounts of information to consumers, so the task must now be to ensure that feature benefits, including energy ratings, are clear, concise and easy to understand and relate to. This will help ensure that ‘go green’ messaging remains a powerful

selling tool for retailers.” He explains that POS materials available for Beko’s WMB81445L ‘A+++++’ washing machine focus on the product’s ability to wash two loads for the price of one. “This is an easily understandable and quantifiable statement that consumers can relate to, which will help them recognise the benefits of buying this model.”

Indesit Company also highlights the importance of good promotional material.

Advertising and Communications Manager Libby Morley says that both brands – Indesit and Hotpoint – supply retailers with dedicated POS packs for appliances and offer an online ordering service for such. She stresses that retailers should “make good use” of the materials provided and “take advantage of any training provided too.” Indesit Company has 18 multi-skilled trainers on the road, covering built-in and freestanding products.

Hotpoint’s Iain Starkey also flags up the fact that selected products in the brand’s collection are factory-fitted with the Eco Tech symbol, which is Hotpoint’s guarantee of “class-leading, environmentally friendly performance.” He adds that many of the brand’s appliances also have eco features and energy ratings printed onto the fascias.

Gorenje, too, has taken steps to help consumers quickly and easily identify energy-efficient appliances. Marketing Manager Ruth Ferguson advises that the brand has introduced the Eco Care label across its appliance range. “This identifies the most energy-efficient products by providing a visual aid that is of benefit both to consumers and retailers. POS materials for this label are also available for retailers to allow them to highlight the products that are the most green.”

While the focus on environmental concerns relating to the use of laundry, dishwashing and refrigeration products has continued to strengthen in the past decade, less consumer interest seems to have been aroused by the ‘greening’ of ovens – perhaps because progress in this area hasn’t been communicated to the same degree as in wet and cold appliances.

The fact that only electric ovens are labelled in accordance with EU regulations, as there is no standard for measuring the efficiency of gas ovens, and that other cooking appliances such as hobs and microwaves do not come under the labelling system is probably a tad confusing for consumers too.

Nonetheless, significant moves have been made to improve efficiencies in the one cooking sector that does carry the energy label, despite some dissent amongst manufacturers as to how consumption is measured (skeptics question the use of the ‘brick test’ in determining energy ratings), and when the new EU label for electric ovens is made compulsory, it may be that some uniformity in the manner in which ratings are communicated will help minimise consumer confusion and increase awareness.

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JULY 2011

CANDY’S GRANDO EVO WASHING MACHINE INCORPORATES A 20C WASH PROGRAMME THAT DELIVERS A 40C RESULT

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In some corners of the market, greater energy efficiency is accompanied by greater oven capacities. Hoover’s Prodige, for example, has a cavity almost 40% larger than standard, at 76 litres, yet the appliance is rated A-20%. Some of the models have a divider that allows the cavity to be split into two ‘flexi’ cooking zones with independent temperature controls – a further saving in energy if only one zone is required.

Samsung added to its Dual Cook oven range in 2011 with the Dual Cook Steam oven – the first product to provide the choice of splitting the oven in two to cook at independent temperatures with the option of using steam technology. Andrew Jones says the 65-litre appliance is AAA-rated for energy and saves up to a further 25% when using the upper cavity only.

Hotpoint recently introduced two new Openspace ovens, one with pyrolytic cleaning and the other with Stay Clean catalytic liners.

As with existing Openspace models, these new A-rated, 70-litre ovens have an insulating divider that allows the cavity to be split into two independently controlled compartments.

Early this year, AEG introduced Neue Kollektion single ovens rated at A-10%, with Pyroluxe versions in the A-20% category, and Gorenje took the step of increasing the capacity of its Pure built-in ovens to 65 litres, with an “even better” energy rating of A-20%.

Communication While the arrival of the new energy label should make ratings easier to communicate at the point of sale, additional and proprietary environment-friendly features will continue

to need explaining. An example of such is provided by Amica country manager Simon Freear, who highlights the Eco function incorporated into the brand’s A-rated Scandium oven. Freear explains that the feature utilises residual heat inside the oven chamber to regulate energy consumption.

He also points out that the Scandium’s Aqualytic cleaning system uses 90% less energy than its pyrolytic counterparts; although, for some, this may be seen as comparing apples with oranges, as aquabased cleaning systems, though said to be “kinder to the environment”, are not considered by all to be as effective as pyrolytic, especially on heavily soiled and greasy cavities.

Steve Dickson, Commercial Manager for Belling, believes it is crucial for retailers to get additional “eco messages” across to customers.

“For example, the Belling Bl60i – the first induction oven on the market – offers a saving of £75 per year on energy bills, and this cold, hard figure is often enough to capture the customer’s imagination before you even talk about the product’s other features.” When used in induction mode, the Bl60i consumes 50% less energy than an A-rated oven.

A greener future Energy efficiency and sustainability are now firmly established as fundamental elements in the design of kitchen appliances, and manufacturers have continued to drive technological advances in energy, water and consumables savings to such a high that one would be forgiven for asking if there is any more room for further improvement and progress.

Looking ahead at the strongest trends and potential developments in eco technologies, Gorenje’s Ruth Ferguson thinks that products will continue to develop at “lightning speed”, offering even better energy efficiencies.

“We believe that key trends for product development will be the integration and use

of Smart Grid technology and rechargeable batteries to allow consumers to minimise energy costs, with remote operation of appliances also an area of interest.”

Whirlpool, too, sees Smart Grid technology as the future. Dean McKelvie says the brand’s Green Generation range of appliances is the “first step” in the enablement process. He also highlights the company’s GreenKitchen 2.0™ – a concept that takes “best in class” technology and delivers an integrated eco-system obtained by combining individual appliances in a synergetic way in order to save or reuse water, heat and energy. The technology increases energy savings by up to 70% and accommodates integration into the Smart Grid system.

Beko’s Les Wicks is also thinking along the lines of recovery & recycling resources, envisaging more in the way of heat recovery systems playing a part in the future: “The heat from the back of a fridge or freezer could be used as a heat source for the home or to provide warmer air input for the tumble dryer.

And as water becomes scarcer we will have to be more inventive about how it can be used. Perhaps water that has been used in the dishwasher should be recycled and used in a second process,” he suggests.

It is worth mentioning at this point that the new Maytag dishwasher, model ref: MDW 606 AWG, achieves its low level of water consumption by saving the water from the final rinse in a dedicated reservoir where it is recycled for use at the beginning of the next programme. The appliance uses an unprecedented 6 litres of water to wash 13 place settings, providing proof that, inch by inch, the development and discovery of eco technologies continues to edge forward.

Perhaps not at the same pace witnessed throughout the noughties, but as the line goes: one small step for man; one giant leap for mankind.

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The Platinum collection combines innovative technology and stunning aesthetics with environmental credentials. One day all kitchens will perform this well.

PORTABLE CE DEVICES

Time was when FM transistor radios - and then the revolutionary Sony Walkman tape player - were the last word in portable CE devices.

Today, the category has expanded to include on-the-move access to huge libraries of music and books, sophisticated gaming, the means to watch, shoot and share still and moving images, direct voice-tovoice contact with people all over the world, and computing power that only a short time ago would have been more than acceptable on the big, fixed desktop in the office. George Cole looks at what consumers are carrying now, and what they’re likely to be carrying in the future

I

t’s amazing what we carry around with us these days – everything from smartphones to MP3 players, e-readers, tablets, cameras, camcorders, digital radios and media players.

The world of portable devices has certainly come a long way since the days when the Walkman tape player was at the cutting edge of portable technology. For retailers, the portable boom is both exciting and challenging: exciting because it opens the way for a host of new products and formats; but with the challenge of choosing the right products, brands and technologies with the strongest sales potential.

Where will it carry us next?

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JULY 2011

Not surprisingly, there are many opinions when it comes to the products most likely to lead the portable communications explosion. Paul Hicks, Toshiba’s DPS (Digital Products & Services) business development manager, says “tablet devices will be a big driver for retailers. They’re the newest significant device category, and they secure a large space in the retail market, which in turn brings additional footfall into stores. There is also a wide range of accessories that go with tablets, so there’s an incremental business opportunity for retailers.”

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The success of Apple’s iPad (which sold two million units in its first two months on the market) has seen many companies entering a market that was previously thought to be a niche sector. Sony, for example, has announced two new tablets, which are due this autumn. Sony is also one of the leading supporters of e-readers, devices that allow users to pack hundreds of e-books into a palm-sized device. Amazon says that sales of e-books now outstrip traditional books, and although many people are sceptical about the potential success of e-readers, this market is set to grow over the coming years.

For Alex Windle, LG’s head of marketing mobile, “2011 is very much the year of the smartphone, with devices becoming richer in features and turning into sophisticated all-in-one multimedia devices.

Smartphones also offer retailers higher margins.” Nick White, head of digital imaging, Samsung, says that devices which offer features that appeal to a wide audience are best suited to high street retailers, as these tend to generate the most sales. “Also, products which require accessories can deliver a good boost in sales for high street retailers,” he adds. He cites the example of Samsung’s NX11 camera, which has similar technology to a digital SLR but in a compact form.

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“Compact system cameras are a good choice for high street retailers as they lead to additional accessory sales of lenses, memory cards, flashguns, bags and tripods.”

Toshiba’s Hicks also thinks that “another area for healthy sales is HD camcorders – current models like our Camileo range are really popular, as they offer a lot of high end features for a relatively low cost – so consumers get a great deal too.”

THE TOSHIBA CAMILEO RANGE DELIVERS HD QUALITY AND CONVENIENCE IN A LIGHT, COMPACT PACKAGE

Mix of opportunities Although emerging portable markets such as tablets and e-readers are gaining most of the media coverage, more established portable formats can still reap dividends. Owen Watters, Roberts Radio sales and marketing director, says “portable radios continue to offer a huge potential for high street retailers and we offer a wide range of models to reflect the broad scope of models that consumers seek.” It’s a view supported

by Colin Crawford, Pure’s director of marketing. “I’m not going to pretend,” he says, “that digital radio has the market potential of tablets, but there is still a real appetite in the UK for radio on the move, as continued product success in this area shows. This is particularly true for independents, as the multiples don’t show off personal products very effectively.”

Sales of portable products are driven by a number of factors, including size, price, design, performance, convenience, content, apps, says Roberts’Watters. Pure’s Crawford says the biggest driver for digital radio is content, followed by build quality, sound quality and convenience.

“Tablet devices will be a big driver for retailers”

Many portable devices are the electronic equivalent of the Swiss Army Knife, and offer multiple functions. A smartphone, for example, can also be used as a digital camera, games player, digital music player and digital photo album. So is there still a place for the dedicated device? LG’s Windle thinks “the trend is moving towards more integrated products. Smartphones can pack a huge range of functions into one device. In general, this is what consumers are opting for - ease of use and convenience, as THE SONY READER: A WHOLE READANYWHERE they don’t want to carry many different devices around with LIBRARY IN A SLIM, COMPACT DEVICE Price is only one factor them.” But others are not so sure, including LG’s Windle says that the smartphone market is opening up Omar Gurnah, Sony category marketing “For retailers, the portable boom as many smartphone manufacturers support the Android manager, who says: “As smartphones get mobile platform, and there is much scope for differentiation cheaper, sales of high-end MP3 players is both exciting and challenging” through features and design. LG was first to market with will fall. However, sales of entry-level dual-core [fast processor] smartphones and is continuing its to mid range players are flat, and that is commitment to 3D, with the development of a smartphone strong across a range of categories will be better placed because people are buying MP3 players as that offers glasses-free 3D. than those which only focus on one or two categories. There a secondary music player. You don’t want to go LG’s Optimus 2X smartphone are also significant growth opportunities for CE companies running with a £500 smartphone, or use up all can be connected to a TV and in convergence. Samsung’s smartphones, for example, can of your phone’s battery on the daily commute. used as a gaming controller. be used as a remote control for LED televisions as well as That is where dedicated music players come Samsung’s White says that a viewing device for one of our latest cameras.”White also in.”Toshiba’s Hicks adds: “There are natural “consumers do think about believes that by enabling simple connectivity to various limitations to any do-it-all device. There will price when considering the portable devices, consumers are more inclined to purchase always be people that want more functionality purchase of a product, but devices from brands that have products across a range of from a device, and this is where manufacturers this isn’t the only key driver in CE categories. have an opportunity to add value for customers. their decision. Consumers seek This is especially true of devices like camcorders, Efficient retail value in the form of design, where physical components, such as optics, are A combination of display, demonstration and dialogue brand, features and overall required for better images.” with the customer can help sell portable products. “The performance, and these Consumers will choose products that ability to create a positive customer experience through attributes are equally best meet their requirements, so there will the presentation of products in-store is a huge advantage,“ important to them. We continue to be demand for both says Samsung’s White. “It is important to allow consumers are also seeing a tendency integrated and specialist products, to interact with products. If retailers can demonstrate the towards consumers says Samsung’s White: “Camera capabilities, consumers are going to be more impressed investing in products phones have increased the demand for APPLE’S IPOD TRANSFORMED THE PORTABLE AUDIO MARKET than merely seeing them on a shelf. An impressive way of that will provide the latest digital cameras by taking photography to a displaying products is to showcase how they connect with innovations in technology as wider audience. Many of today’s mobile phones each other to demonstrate convergence.” a way of future-proofing their offer consumers a wide array of features and Fujifilm’s Edwards adds that demonstration is always investment.” Samsung’s SH100 camera, for example, is Wi-Fi significantly improved image quality, but their primary key to persuading consumers to move up the quality scale. enabled, so consumers can easily share their images over function is telecommunication. The digital camera’s primary “Retailers should look to have a wide range of products the internet. function is to take high quality pictures, and that is why they available to test, and with respect to cameras, The success of Apple in the digital music market (iPods will always come out on top for photography enthusiasts.” should also create different scenarios in-store that take around 70% of the digital music player market), Fujifilm’s Edwards also sees camera phones as less of a demonstrate the functionality of the products.” smartphones (the iPhone dominates the market, although threat and more of a stimulus to digital camera sales: “Many Roberts’Watters says that colour can play the Android platform is catching up, as noted above) and consumers’ introduction to digital photography is now via a part, too. “Colour is fantastic at drawing tablets, shows how powerful brands are in this sector. camera phones, which actually benefits the market by in consumers. Our Revival spring colour “Brand names are always important where consumers want increasing the overall interest in photography. After this window competition was so successful an assurance of quality. This is particularly the case with initial experience, many consumers look for better image the retailers kept the window display for compact cameras, where image quality is the driving force quality and more flexibility, which inevitably leads them to a lot longer than required.” And Sony’s behind consumers looking to upgrade from their camera a dedicated camera product.” And as Pure’s Crawford notes, Gurnah points out that “we have retailer phones,” says Fujifilm’s Edwards. LG’s Windle agrees: “When “you still can’t get digital radio on smartphones, and until display solutions especially made for purchasing smartphones and tablets, consumers look to then, our customers certainly say they want simplicity.” independent dealers to help them brands they trust.” Consumers like to buy from brands they Balance of power demonstrate products in-store trust and know will support them with their product for For a long time, consumer electronics companies dominated something many of the larger years to come, adds Samsung’s White. Toshiba’s Hicks agrees all sectors of the portable communications market, but retailers can’t do.” that brand names do play a part in a consumer’s decisioncomputer companies like Apple have moved into areas making process - although it’s not always the major factor, such as digital music and turned it upside down. So, can he says. “In today’s marketplace, consumers are very savvy SONY WALKMAN OF THE DIGITAL GENERATION consumer electronics manufacturers maintain a strong with their money and will make an informed judgment, grip on this sector? “With a continued rise in integrated based on in-depth research, brand trust and whether a products,” notes Samsung’s White, “CE companies that are product is fit for their needs.”

JULY 2011

Horses for courses?

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Lucy Edwards, Fujifilm’s marketing manager, digital cameras, notes that, “with regards to cameras, performance is still a key driver in the market. Consumers are realising that to get quality images they need a dedicated device as a step-up from using a camera phone. Additional functionality is also important too, such as GPS, which can automatically tag photos with the location they were taken.

Simpler controls and touch screens, easy upload to websites such as Facebook, plus stylish designs, have all been well received in the digital camera market recently”.

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GROWTH FROM KNOWLEDGE

Portable Audio:

not getting carried away with its success

Growth from Knowledge

Portable audio has undergone a series of transformations over the last half-century, exploring a few blind alleys on the way but continuing to innovate and adapt to changing consumer demands. It has stood up remarkably well to the recent pressures on the Consumer Electronics sector. With accessories such as headphones scoring growth in a depressed market, and the rise of DAB boosting portable radio sales, Portable Audio certainly has legs.

GfK account director Nick Simon looks at trends and current performance

T

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JULY 2011

he Portable Audio market has been constantly redefined over the last fifty years. Hence its relative durability. Forty years ago we were restricted to pre-recorded music played back on a portable cassette recorder, which the more adventurous of us connected to a microphone and then rammed it up against a radio with questionable Lo-Fi results. Then the Radio Cassette Recorder came along, and the larger boombox version became a 1980s style icon, when we also embraced the new personal stereo products that developed as a three-way split of cassette, radio and radiocassette products, whose common feature was the headphones that were supplied with each. In the nineties we had the relative cul de sacs of mini disc and especially Digital Compact Cassette.

28

The rise of MP3/4 You could say that in the last ten years we successfully got the whole portable audio recording and listening experience taped, as it were. Since 2001, MP3 players and their more sophisticated video equivalent have accounted for sales in excess of 30 million units, without even considering the numerous mobile phones that also double as music players.

Unfortunately this crossover, and the sheer volume of products sold to date, have led to a slowdown in sales, with the 4.6 million units sold in the 52 weeks ending April 2011 being a pale reflection of the 6.1 million units sold in the previous moving year ending April 2010. You could have been forgiven for assuming that these woeful tidings, together with the much publicised slowdown of the whole Consumer Electronics industry, would have left the Portable Audio sector in a similar state of acute decline. But the 52 week ending comparison sees a reduction of “only” -10.9% in value, compared to -16.7% for the MP3/ MP4 market ( which is still worth 65% of the total category).

Headphones driving ahead The real success story is the continued growth of the Headphones market (up 12% and 14% in units and value respectively), demonstrating the popularity of top-end

noise cancellation products in particular, and also the reluctance of consumers to abandon traditional headphones while still purchasing copious amounts of new style in-ear products. The total market size of the product is nearly five million units, equating to £135 million.

DAB broadens portable possibilities Of course, a fundamental plus factor of the whole Portable category is the inexorable rise of DAB. Although we should give credit to manufacturers of essentially static Audio Systems for the support that they have provided, the dominant product is the Portable Radio, with Clock Radios too contributing to a total DAB market whose products are twice as likely as their static counterparts to be portable. In addition, this market is now enjoying the stimulus of internet radio, allowing access to a worldwide offer of different broadcasting.

 For further information please contact Nick Simon in the UK on +44 870 603 8128 or email nick.simon@gfk.com. www.gfkrt.com/uk GfK. Growth from Knowledge

• Listen to over 15,000 stations from around the world • Play your music collection from your computer • Wireless connection • Auxiliary input socket for iPod/MP3 playback

FREE

Remote Control App

• Headphone socket • Battery or mains operation

     

    

ROBERTS www.robertsradio.co.uk

GEORGE COLE GETS CONNECTED

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

E-mail: georgecole@gcmagazine.co.uk

HEAD IN THE CLOUD?

W

ill the homes of the future have

It sounds like an enticing proposition

Cloud services like Apple’s iCloud and

racks of CDs, DVD boxed sets

– no need to clutter up your home with

Amazon’s Cloud Drive. Cloud services also

and Blu-ray libraries? Or will

hundreds of discs, and the ability to

rely on us having access to fast, reliable

all our entertainment content be stored

access your entertainment content

broadband services – something many

on the internet? If you’ve been reading

anywhere there’s an internet connection.

homes lack. And there’s also the issue

the news recently, you can’t have missed

Even the Hollywood studios are getting

of having your Cloud account hacked or

the hype over Cloud services, with Apple’s

in on the act with the Ultraviolet, a new

attacked by viruses and other malware.

iCloud being the latest in a long line

online movie service we talked about

of planned ventures. A Cloud service

some time ago. Ultraviolet will allow users

tracks from iTunes, but if I want to buy

basically stores your content - such as

to purchase movies, which are stored

an album, I still prefer to own a physical

music and photos – online rather than

online and accessed by various devices.

copy. But perhaps it’s just my age, and

you having a physical copy in the home.

But will Cloud services replace

I purchase a fair number of individual

maybe younger consumers are quite

Google, Amazon, Sony and Samsung are

physical content? Many people now rip

happy about not owning a physical copy

other companies that have announced

their CDs to music library programs like

of an album, boxed set or movie? Cloud

Cloud services.

Apple’s iTunes – a friend of mine does this

services certainly have implications for

and then packs his CDs in the loft. But it’s

manufacturers of consumer electronics

(eventually) videos are held in a cyber

another thing to dispense with owning a

equipment. And let’s not forget that

locker – an online storage depot - which

physical copy and leaving all your content

Apple has a strong track record in

streams or downloads our content to

online. There are also issues about piracy

disrupting existing markets and formats

various devices such as smartphones,

– something music and movie companies

– look what it did to the music and

computers, Smart TVs and media players.

are concerned about when it comes to

mobile phone markets.

The idea is that our music, photos and

GET CONNECTED

JULY 2011

YOUR WHOLE LIFE IN YOUR POCKET

30

In this month’s feature on portable devices

launched a mobile payment service in the

scheme will enable “everyone to put their

(page 22), there’s a discussion on whether

UK, Quick Tap. The scheme initially involves

whole life in their pocket on one device.”

consumers want devices with multiple

around 50,000 retailers that have special

functions, such as smartphones that also

contactless readers that use short-range

people that the system offers robust

play music and take digital snaps. As you’ll

wireless technology called Near Field

security and privacy – and that it’s no

see from the feature, opinion is divided over

Communications (NFC). Consumers who sign

more expensive than paying by cash. Even

the merits of all-singing, all-dancing devices.

up to the scheme (they need an NFC-enabled

then, some industry insiders are sceptical,

But naturally, mobile phone companies see

phone) can purchase goods by simply

pointing out that consumers will need an

things differently and there are already

waving their smartphone in front of a reader.

NFC handset and retailers will have to invest

plans for smartphones to replace our cash,

No more scrabbling around for cash or

in new infrastructure (such as readers and

credit cards and debit cards, by turning

waiting for your card to be processed. Now,

IT systems). And as one person pointed out:

the mobile phone into a mobile wallet that

Everything Everywhere has teamed up with

“I’m not convinced that using your mobile

stores electronic cash. Barclaycard and

Vodafone and Orange to develop an industry

phone to save time when you purchase

Everything Everywhere (parent company

standard for mobile payments. Guy Laurence,

a hamburger is going to be a compelling

to Orange and T-Mobile) have already

Vodafone UK’s chief executive, believes the

reason for consumers to use the system.”

But the industry will have to convince

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FROM THE BENCH

E-mail: fromthebench@gcmagazine.co.uk

Perfect viewing Alan Bennett examines some of the peripheral factors in TV viewing

I

a high customer satisfaction score in the last (June) issue of

Viewing position and sound

Which? magazine. They achieved 12th place in a consumer

For the best possible

t was good to see independent electrical dealers achieving

survey of 100 shops of all types; Richer Sounds came first,

TV experience the viewer

PC World 98th, Currys Digital 94th and Comet joint 82nd. In a

should be within about ±15°

popularity survey confined to electrical shops independents

(30°cone, max. 50°cone) of

came sixth out of 22, with Richer Sounds first, Comet and Currys

the vertical and horizontal

joint 14th, and PC World second to last. Considering that these

centre lines of the screen.

scores take price (where independents struggle to compete with

This avoids ill effects due to

the big boys) into account, they have done well, but could do

the screen structure, and

better! It seems that Richer Sounds scored best on account of

the geometric distortion

‘great’ stock, pricing and staff expertise.

arising from ‘slant’ viewing

Expertise and product knowledge has always distinguished

furnishings should ideally be dark in colour to absorb light, and

specifications, features and price – into such spheres as installation,

not hard and shiny; these reflect and echo sound, though here, as

ambience and other in-home factors. In the March issue we

with loudspeakers, we are getting into conflict with other functions

discussed aspects of ambient light. Time now to consider other

of the lounge! The ideal, of course, is a dedicated cinema/sports

influences in viewing, applicable to in-shop demonstration rooms,

viewing room. mounting position so long as a reasonable symmetry is achieved

screen type.

with L, R and the two rear ones, and the centre speaker is close to – or behind – the screen; no longer does it need to be magnetically shielded. The subwoofer can go virtually anywhere in the room:

TV buyers generally choose a smaller screen than is ideal for their

some top systems (not for living rooms!) now use two woofers. It

viewing. To get the best out of movies and sports the widescreen

is possible to switch two speakers between a TV-surround and a

diagonal should be about 33–40% of viewing distance for SD

two-channel Hi-Fi system if required using double-pole two-way

pictures, and 50–66% for HD and 3D viewing. Thus with the sofa 3m

switches, best set before either system is switched out of standby.

from a full HD picture a 60-inch screen is appropriate, 42–44inch

When working with a separate surround system mute the TV’s own

for a 2m spacing, and so on. At greater distances the full detail

speakers to avoid weird phasing and other effects.

capability can be lost.

Regarding the mounting position, in front of or under a window is better – to minimise reflections and image washout – than facing one.

This can compete with any open fire in the room to become the ‘focal’

JULY 2011

Surround sound loudspeakers are fairly tolerant of their

especially when it comes to such things as screen size and 3D

Screen size and placing

GET CONNECTED

of a 2D display. The room

independent dealers, and this extends beyond the basics of

customers’ installations and advice to those purchasing equipment,

32

HOW THE VIEWING EXPERIENCE HAS CHANGED!

For in-shop demonstrations of hi-def and 3D TV keep two or three brilliant Blu-ray discs, and play whichever is most appropriate to the customers in your armchairs!

wall. To assess the chances of installing a TV screen over a fire, fit a

Setting up

reasonably deep shelf to deflect the warm airstream, then check the

Correct setting up is crucial to TV picture reproduction. Avoid hard,

temperature at the wall above with a thermometer when the fire is

glaring, brassy images like those preset by (e.g.) ‘Turbo’, ‘Vivid’

running. Compare the reading with the ambient temperature rating in

and ‘Dynamic’ modes: they are for competing with other makes in

the TV’s specification. Take care that light from the screen does not fall

brightly-lit showrooms and dealers’ windows. With many models

on the front panels of nearby set-top boxes or disc players, etc. – it can

the ‘normal’ or similar pre-set, or with all the analogue controls at

wipe out remote control operation. The less light falling on the screen

about 50% or 60%, is a good starting point. Getting the best possible

the better, and soft backlighting is best as we saw in the March issue.

black level is important so choose the lowest LCD backlight setting

It is not for me to join in the huge controversy of active versus

consistent with adequate brightness and contrast. If you have a

passive 3D systems currently raging, but I believe that the passive

light meter about 100–300 lux average (e.g. with a test-chart display)

type has the advantage in many respects except that of 3D image

is a good setting for most viewing. It is possible for your customer,

definition. There are systems afoot to overcome this. Certainly with

or for you in a demonstration room, to have a TV screen set up and

passive screens you can have all your mates or family in to watch the football or Green Hornet 3D without needing to spend a grand

calibrated by an ISF (Imaging Science Foundation) professional, or

on viewing glasses...

and www.homecinemaengineering.com

even to become one yourself: see www.greyscalesolutions.com

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We stock the latest brands and continue to offer expert and friendly advice to our customers. We pride ourselves with offering the best prices with the best service.

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BACKCHAT

Barry Kick is a Director of UK TV supplier Linsar. He has used his determination, patience and creativity to build a company that – to his own surprise – has been accepted in the UK industry. He has a strong affinity with water (though a decent pint of real ale is always acceptable), has a thing for high speed, and admits to lying to his wife.

Why did you choose to work in the electrical industry? I grew up learning all about the latest gadgets from my father, who worked in the industry for most of his career Who in the industry would you like to spend time with? I love spending time with all the guys at Linsar, but especially my co-director Terry Reed who is the only person who really understands the challenges we have faced and overcome. I would also like to meet James Dyson – clever bloke!

What makes you laugh?

I like slapstick humour, which makes my son the funniest person I know What was the greatest turning point in your life? The birth of my son Hobbies? I love getting out on the water, whether on a board or anything else that floats. Also I am a bit of a gym freak and love skiing and mountain biking What’s the worst lie you’ve ever told?

I won’t be home late (see below…)

What’s your greatest regret?

Letting old friends drift out of contact What historic figure do you identify with?

Winston Churchill – love the fighting spirit How would you describe yourself?

Determined, patient, creative How do you think others see you?

Ambitious, capable, pedantic!

GET CONNECTED

JULY 2011

What’s your pet hate?

People who think the world owes them something, and arrogance

34

Do you have any bad habits?

Telling my wonderful wife I will not be home late, then coming home late!

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

Pro waterskier/wakeboarder

Favourite cuisine? A really good steak or a reasonably dangerous curry!

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

You have been offered a leading role in a film of your choice. What character would you like to play? It would have to be Superman – I know I can’t fly and look more like his nemesis but it would be fun to pretend for a while!

What’s the best kind of punishment….

Finding that reincarnation actually exists and you have come back as a frog…

You have been offered the opportunity to rule the world for a day. What would be the first change you would make? I would end the suffering of children; if they are happy, eventually everything else will fall into place…

Is there anything about yourself that you would like to change?

I would increase the amount of loft insulation and give myself a good singing voice!

Do you have any hidden talents?

I can strip and re-build a car/boat engine without finding I have a screw left over!

…and who deserves it?

I can think of a few people!

Where do you see yourself in 5 years’ time?

A further evolved version of where I am now, plus Dad to two little ones (another one on the way!)

What’s your greatest fear?

Anything bad happening to my family Who do you most admire?

Barack Obama is phenomenal as an orator and a statesman What’s your favourite piece of kit?

My boat – it’s a passion

Do you have any particular fetishes?

High speed!

What motto do you live by?

It’s a mad world; just get on with it…

What would you put into Room 101?

Gordon Brown – spent all that money and we have nothing to show for it other than debt and a section of society who have forgotten the value of hard work

Tomorrow I will… …keep building Linsar and get a bit closer to my dreams

What’s your greatest achievement?

Creating the life we have as a family in Bournemouth What sort of music do you like?

Anything uplifting – Trance, Drum & Bass Favourite quote?

If you can keep your head while all those around you have lost theirs, you probably don’t fully understand the situation!

Who has been the greatest influence in your life? My parents, for more reasons than I can write here Name your poison? Decent pint of real ale

Favourite TV programme?

Anything Sci-Fi. Love a good movie, too

What do you daydream about?

Being on the water with the sun shining

What surprises you?

How well our company has been accepted in the industry

What’s your favourite holiday destination?

Even split between the beach and mountains, Obergurgl is a great European ski holiday

Independent Electrical Retailer:

“There’s been another wave of carnage on the high street, electrical retailing is suffering and the big electrical multiples must be thinking ‘recovery?

What recovery?’ As an independent I don’t know whether to see it as an opportunity, or as a sign that we’re all doomed. One thing’s for sure: just keeping on doing the same thing and hoping for the best is not an option. My business is small enough to refocus, quickly adjust to new ways of turning a profit…. but the choices are life or death to smaller retailers like myself.”

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