Appliance Retailer March 2016 by The Intermedia Group

THE BUSINESS MAGAZINE FOR THE CE COMMUNITY / NOW IN ITS 20TH YEAR

Coffee CUSTOMISATION MEETS CONNECTIVITY

RETAILER

APPLIANCE

MARCH 2016

Dick Smith:

A TALE OF TOO MUCH INVENTORY AND DEBT

Prices

ARE ON THE RISE

HOW ELECTROLUX WILL SPRING FORWARD IN 2016

FLOORCARE

WHY STICK VACS AND ROBOTS ARE WINNING

MOTHER’S DAY BENCHTOP APPLIANCES PICK O’ THE CROP

Don’t leave your office without us The Appliance Retailer afternoon online newsletter delivers the latest and most relevant industry news for both consumer electronics suppliers and retailers around the country. As part of our recent refresh, our newsletter has been redesigned with a smart layout and includes retail-centric content to help retailers stay competitive. The new ‘look and feel’ of the Appliance Retailer monthly magazine has been designed to make it easier for you to navigate categories and find that important content or contact that will make your business life easier. Don’t get left behind. Stay up to date with local and international appliance and consumer electronics industry news at:

www.applianceretailer.com.au

EDITORIAL AR Appliance Retailer is published by The Intermedia Group Pty Ltd ABN 940 025 836 82 41 Bridge Road, Glebe NSW 2037 Australia P 02 9660 2113 | F 02 9660 4419 E appliance@intermedia.com.au W www.intermedia.com.au ISSN: 1328-1852

Price rises can’t come too soon

Managing Director Simon Grover Editorial Director James Wells james@intermedia.com.au Editor Claire Moffat cmoffat@intermedia.com.au Features Editor Kymberly Martin Journalist Emily Bencic General Manager – Sales Rod Riley rod@intermedia.com.au Art Director Alyssa Coundouris Prepress Tony Willson Production Manager Jacqui Cooper jacqui@intermedia.com.au Head of Circulation Chris Blacklock Subscriptions Ph 1800 651 422

Average Net Distribution (AND) Per Issue, 6,153 CAB Publisher’s Statement Period ended 30 September 2015

espite the sharemarket turbulence which marked the beginning of 2016, the latest Australian Retail Index figures are encouraging. They indicate that overall retail sales were up 6.88% during the Chinese New Year celebrations, compared with the same week in 2015. But just in time to balance that trend, the unemployment rate jumped back to 6% in January, as the job market shrank by about 8,000 and the number of people looking for work grew, according to the Australian Bureau of Statistics. As the unemployment result was below expectations, the Australian dollar, which has such a critical impact on our industry, immediately dropped about 0.6 %. Against this backdrop, suppliers are now certainly validated in increasing prices, many of which have already taken affect. For those who were still undecided, this may just be the turning point (see our story Page 7). Meanwhile, the fate of Dick Smith continues to hang in the balance (see story next page) with a Senate inquiry scheduled, once the fi ndings of the receiver McGrathNicol are complete. This is new territory for the CE industry, and if any good can come from that retailer’s demise, perhaps it will be a new blueprint on how (not) to run a national retail chain.

On a more positive note, the industry is welcoming back Carl Rose as Samsung’s new vice president of consumer electronics. For newcomers, Carl had a blue chip career at Sony, working for the company in Australia, New Zealand and the UK. He is an industry warrior and while at Sony did battle with Samsung on many fronts. Samsung has demonstrated wisdom in recruiting Rose for such an influential role. Despite Samsung’s dominance in several markets, its reputation has recently been tarnished by its management of the ongoing washing machine recall. In his role, Rose will leverage his extensive experience in consumer electronics and business management to oversee television, audio visual, home appliances, air conditioning and CE business solutions within Australia. Meanwhile, this edition is bursting with insightful content in the Coffee, Benchtop Appliances and Floorcare Features. One strong trend which resonates across all three categories is the strong performance of the premium, crème de la crème appliances which are not for the faint hearted. They are connected, stylish and highly priced: good news for retailers wanting to capitalise on the approaching Mother’s Day sales season. Enjoy!

Editor Claire Moffat cmoffat@intermedia.com.au

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Alyssa Coundouris twitter.com/Applianceretail

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Page 41

Page 29 Volume 22 / Issue #2

CONTENTS 03 Editorial

Suppliers take the inevitable step of increasing prices on the back of turbulent market conditions

05 News

Page 58

13 Coffee Feature

The rise of the connected coffee machine

29 Floorcare Feature

Page 56

Leading small appliance suppliers disclose details of new products, as they explain the trends driving growth and pushing boundaries, and why health-conscious consumers are prepared to pay premium prices

56 New Appliances

Appliance Retailer’s pick of the crop of the hottest appliances, from coffee machines and ovens to shavers and facial saunas

57 Retail Rules

How increasing shopper frequency drives proﬁts

58 New Gadgets

The latest gadgets that have hit store shelves include an activity tracker and multiroom speaker

Appliance Retailer March 2016

There is more than one way to create your perfect coffee with this machine. Use the PrimaDonna Elite’s intuitive, colour touch display; or download the Coffee Link app to your mobile device to communicate remotely with the machine. Create personalised recipes and save them to up to six user profiles, making dinner parties effortless. And for households where everyone’s a coffee lover, multiple devices can connect to the PrimaDonna Elite, so you get the perfect coffee, every time.



Why robotics are shaping up to be the heavy hitters of this category

41 Mother’s Day Feature

DéLonghi’s new luxurious PrimaDonna Elite serves barista-quality coffee to satisfy every taste with its vast personalisation possibilities. To replicate a real barista experience at home, the PrimaDonna Elite has a one touch ‘coffee-first’ function that delivers the coffee before the milk.

ON THE COVER

A deeper look into the collapse of Dick Smith, imminent supplier price rises, an exclusive interview with Electrolux’s local head and more

Café coffee experience at home

NEWS AR

Anatomy of a collapse: how did Dick Smith fall so far?

BY CLAIRE MOFFAT

t’s been the biggest retail collapse in Australian consumer electronics history, even eclipsing the demise of the once mighty Retravision group. Whereas that collapse around ten years ago, eventually took the life savings and health of many small store owners, this one was swift and deep and will now be the subject of a Senate inquiry. As Appliance Retailer goes to print, the life of Dick Smith Holdings (DSH) is officially over. On Thursday February 25, receivers Ferrier Hodgson said they had been unsuccessful in finding a buyer and all stores would be closed. Receiver James Stewart said,”While we received a significant number of expressions of interest from local and overseas parties. Unfortunately, this means the sale process did not result in any acceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses. “The offers were either significantly below liquidation values or highly conditional or both.” This makes the actions of South Australian independent Senator Nick Xenophon even more imperative. He has successfully gained bipartisan support for a full Senate inquiry (technically it is an inquiry into ‘the causes and consequences of the collapse of listed retailers in Australia’). Xenophon said he was spurred on by discussions with his constituents. Although he initially wanted the inquiry to report in May, he said he would be willing to extend the term of the inquiry until after McGrathNicol have submitted their report to creditors. In recent articles on the Dick Smith demise on applianceretailer.com.au, we suggested that the inquiry might consider these questions: • Why did Anchorage praise the value of the Dick Smith brand in the prospectus when it didn’t recognise an asset for that brand at acquisition date? • Why would Woolworths sell the Dick Smith business for $115 million if Anchorage and its auditors, Deloitte, reckoned the fair value was $261 million? • Why did Woolworths earn another $118 million for “administration” costs in the Dick Smith changeover?

“The light also needs to focus on the peculiar matter of the Nick Xenophon

• Was there a conflict of interest when Deloitte, the auditor of Woolworths, was also appointed as Anchorage’s auditor and investigating accountant for the prospectus? The light also needs to focus on the peculiar matter of the company’s inventory and how it was reported after the Woolworths sale to Anchorage. Woolworths 2013 accounts showed that DSH inventory was $149.3 million at June 24, 2012. Then, just five months later on November 25, 2012 inventory was $370 million, a remarkable increase. Just the next day, November 26, the inventory was written down by $58 million to $312 million. That writedown was not mentioned in the DSH prospectus nor in the report by Deloitte as investigating accountants. Compounding this was a growing mountain of debt. According to the 2015 accounts issued on August 15, operating cashflow was negative by around four

company’s inventory and the way it was reported after the

Woolworths sale to Anchorage partners in 2013.”

million. Investing cash was outflowing at $31 million in payments for plant and equipment. DSH had to borrow a net $70 million to plug the gap and deliver a $35 million dividend. This extraordinarily high inventory level subsequently left the company in an obviously disadvantaged position (we all understand that technology stock goes off very quickly) at the same time as setting out on an expansion plan in August, one which was to see it put small appliances into “100 stores between now and Christmas” and according to Aboud, go head to head with competitor JB Hi-Fi in a market where it had no previous experience. Just over four months later, Dick Smith was placed in receivership. AR www.applianceretailer.com.au

AR NEWS

Masters demise: 63 stores and over 7,000 jobs in limbo When Appliance Retailer asked major suppliers about the impact of Woolworths’ cutting ties with Masters, the response was unanimous that it was too early to make comment, despite the hardware chain leaving a question mark over 63 store sites, over 7,000 employees, and millions of dollars of stock. The $14 million warehouse built for Masters in Nowra on NSW’s south coast would have created 180 jobs but construction of the site has come to a halt. Local mayor and former federal Liberal MP for Gilmore Joanna Gash said the decision was a “huge blow”.

“It’s significant to our area. We were happy to see it all happen because it was a huge project, which was going to employ a lot of young people,” Gash told media. A Masters spokeswoman confirmed that the Nowra store would not open, but said the company was “committed to doing the right thing by our landlords and developers”. “We will be dealing with sites where construction is planned or underway on a case-by-case basis.” Masters opened near Adelaide Airport in early 2015 and began work on a second store in Noarlunga in May.

A month later, work began on a 13,500 square metre store at Parafield Airport, which was due to open in May this year and create 130 jobs. Meanwhile, Masters hosted a grand opening for its Penrith store, in Sydney’s west, on January 16, just two days before the announcement from Woolworths. The store employs approximately 130 people. Penrith Mayor Karen McKeown said a potential closure after such a short time was extremely disappointing. She pointed to the huge catchment area and the strong population growth in Penrith as a big magnet for a hardware store operator. AR

Aldi: Ready to eat into South Australia’s smalls market German supermarket chain Aldi opened its first stores in suburban Adelaide early last month with a special offer of a Super Blend 1000 juicer and blender for $69.99 to mark the occasion. The new stores are located at Parafield Gardens in Adelaide’s north, and Hallett Cove, Seaford Heights and

Aldi South Australia managing director, Viktor Jakupec and CHEP Australia and New Zealand President, Phillip Austin.

Appliance Retailer March 2016

Woodcroft in the south. South Australian Premier Jay Weatherill attended the Parafield Gardens opening. These stores are also sporting new livery of more modern, brighter interiors, upright freezers cabinets, light wood panelling and new signage. Aldi South Australia managing director Viktor Jakupec said he was confident the model will succeed in SA without any fine tuning. Industry observers expect this improvement will increase Aldi’s attractiveness to customers and further boost its market share in Australia, especially among the key middle-class consumer market. If industry retailers were still dismissive of the Aldi competition, they need only refresh their intelligence by reading a 2015 survey by Canstar Blue. The research company found that consumers who purchase their (almost iconic) capsule coffee machine Expressi said they were happy with the machine’s overall performance and value for money. Aldi has also been building its brand by advertising the awards it won for

BY EMILY BENCIC

BY CLAIRE MOFFAT

Industry observers expect this improvement will increase

Aldi’s attractiveness to

customers and further boost

its market share in Australia, especially among the key

middle-class consumer market. its fresh products at events, such as the Sydney Royal Cheese and Dairy Show, Royal Melbourne Fine Food Awards, and Sydney International Wine Competition. Meanwhile, Brand Finance Australia managing director Mark Crowe puts the bigger picture into perspective. “With sales expecting to slow at faster rates than rivals, the biggest challenge to Woolworths and other supermarket operators is coming from the German discount chain Aldi,” he said. AR

Suppliers prices on the move…. Industry prices have begun to move upwards with Sunbeam moving first in February followed by Fisher & Paykel on March 1. Appliance Retailer also spoke with Panasonic managing director, Paul Reid who, along with other senior industry leaders, also acknowledged that rises were a distinct possibility. “Based on the current exchange rate environment, Panasonic is studying the possibility of price increases in selected consumer electronics and appliance categories sometime over the coming months. However, nothing has been decided at this time Reid,” said. Over at LG Electronics, general manager of marketing Angus Jones explained that the company was “as bound to exchange rates as anyone”. “At this stage, we don’t have any increases planned, but we never say never. When we recently introduced new models we did take the exchange rate into account.

…WHILE RETAILERS WELCOME THE MOVES

Harvey Norman executive director David Ackery, has described the imminent price increases of appliances as “economically sane” and he is “more than fully supportive” of the moves planned by major companies including Electrolux and Fisher & Paykel. “[This is] great news and economically sane given some of the deflationary activity driven by some manufacturers recently in key growth categories,” Ackery said.

BY JAMES WELLS Pansonic’s Paul Reid is considering price rises.

“We always encourage price increases where required. It is a good thing when handled properly by suppliers. We can’t be profitable if they are not.” David Ackery, Harvey Norman. “With exchange rates the way they are, everyone in our industry has no choice but to realign the equation. We are fully supportive – actually more than fully supportive,” he added. A whitegoods buyer not connected with the Harvey Norman business interviewed by Appliance Retailer has also echoed Ackery’s comments. “We always encourage price increases where required. It is a good thing when

Sunbeam’s CEO explains why prices had to go up BY KYMBERLY MARTIN Increasing prices was the only option in the current market, Sunbeam CEO, Karen Hope explained after GUD Holdings CEO Johnathon Ling (pictured) declared that Sunbeam’s prices across its appliance range would rise in February by an average of 8%, its biggest price hike ever.

Hope said some products will cost more and some less, but on average the 8% increase will apply to most SKUs following a detailed review. And the primary reason is the falling dollar which has depreciated by 15% to 20% – a major contributor for the decline in profitability, Hope said.

handled properly by suppliers. We can’t be profitable if they are not. [I expect] all major suppliers will be doing the same,” the buyer said. Sydney-based retailer Andrew Whitford said, “Companies that have imports have had a great time with high Australian dollar. Consumers have benefitted wfor a long time, so price rises are a good thing for the industry. With higher prices comes the possibility for higher margins.” AR

“Our sales went up year-on-year by 1%, but where we suffered was because the weaker dollar pushed up Sunbeam’s cost of goods, which in turn squeezed margins. The reality is that when currency depreciates to the extent it has, Sunbeam’s margins are not enough to accommodate all of that devaluation. So at the end of the day price increases have to take place,” Hope said. But it is the electric blanket business in 2016 where Sunbeam is looking for some good news. After losing the account in 2014, Sunbeam will return to Big W shelves this winter, with a new Sunbeam range in addition to a Private Label line. “We are market leader in electric blankets and we are pleased to regain our relationship with Big W,” Hope added. AR

www.applianceretailer.com.au

AR NEWS

How Electrolux is reaping the fruits of its labour In his first industry interview since being appointed managing director of Electrolux Home Products, Mike Putt discusses his key areas of focus within the business with James Wells.

he 2015 calendar year was a good year for the Electrolux Home Products business in Australia and New Zealand. “We are very pleased with the results in 2015 on the back of a strong residential property market in key cities complemented by building and new construction which were equally buoyant. We are benefiting from the effort put in 8

Appliance Retailer March 2016

by our team for the last three to four years and now the hard work is paying off. “Our market shares were slightly up on the previous year overall, by both volume and value. We reclaimed share in categories such as dishwasher and laundry. In cooking we enjoyed good shares, with Westinghouse built-in cooking a highlight. To be able to launch a new range of Westinghouse built-in cooking appliances and have them so well received by the market and our customers and consumers was very pleasing.” One of the largest investments in marketing and advertising over the last 12 months was the appointment of celebrity Julia Morris as the brand ambassador of Westinghouse. “Some of the Westinghouse success is directly related to the advertising featuring Julia Morris which researched very well and was favourably received

by consumers. Julia will remain as our ambassador and we are thrilled that she chose to partner with us. In 2016, she will come back on TV and also be involved in digital campaigns. Our other sponsorships for this year include the Appetite for Excellence program with Luke Mangan as well as our global relationships with the Electrolux Taste festivals.” In the final quarter of 2015, the new generation range of Westinghouse Flexspace refrigerators was launched to our retailers. “Flexspace represents the first of the new refrigerators manufactured at our Rayong facility in Thailand with features based on consumer insight testing conducted in Australia. Since then, a range of Kelvinator fridges have rolled out to market in the first weeks of 2016. “We were excited to host many of our key customers on visits to the Rayong

plant over the last few months of 2015 to see the facilities and the quality of manufacturing we are delivering for our retail partners.” Another key category for Electrolux is the barbecue category.

well as the launch of the Big Bugg in first half of this year.” Since his appointment as MD, Putt has announced a number of key appointments within the sales and marketing team of the business.

“Electrolux is serious about its place in the Australian barbecue business and we will build on our BeefEater acquisition in late 2014.” “Electrolux is serious about its place in the Australian barbecue business and we will build on our BeefEater acquisition in late 2014 which has already fitted in perfectly into our business. This year we look forward to building a successful consumables and accessories business as

Putt said that Julia Morris will remain as Westinghouse ambassador.

“We are delighted to have Michael Doyle who joined us in January as the new Electrolux head of sales responsible for the retail and commercial divisions. He has a wealth of industry knowledge and is highly regarded by our customers. “We are in the process of appointing a director of marketing to elevate the importance of brand within the organization. Our key strategic brands will continue to be Westinghouse and Electrolux, and we are fortunate to support these with a number of other iconic brands. “We have also appointed a new brand manager and a new head of digital – this is the first time the organization has hired a specialist to manage our digital assets and inventory.” The housing category continues to represent an important contributor to the business and Putt is confident the category will remain stable even though booming house prices have cooled. “We think that the buoyancy in the housing sector and completions will run to the end of the third quarter of 2016. The opportunity is in the pipeline of completions as all of those apartments are going to need new appliances and this will certainly be one of the goals for 2016. Putt remains committed to his most important business partners – his retailers. “This year we are looking at increasing our collaboration with our retail customers around forecasting and planning so that we can both manage our inventory better. We want to work more closely with our customers to support sell through activities and have a real commitment to in-store execution to create an ambience and theatre in store. We have just increased our training resources, and for us it is all about supporting our customers with training. The success of our business is determined by our retail customers and the relationships we have with them. But while relationships are critical, a relationship in isolation will not secure the future of our business. We also understand that we need to constantly evolve and adapt to change.” AR www.applianceretailer.com.au

AR NEWS

How Haier intends to run General Electric

ust weeks after Electrolux walked away from the deal to buy the General Electric business, the mighty Haier Group of China stepped in during January. The company is now in the process of buying GE for US$5.4 billion in cash. GE Appliances CEO, Chip Blankenship said the business should continue to thrive with little disruption under the Haier ownership. He stressed that under Haier, the appliance division’s headquarters will remain in Louisville with its current leaders in charge.

This is very different from GE’s failed attempt to sell GE Appliances to Electrolux, which would have run the business from its US headquarters. “We’re very excited that Haier’s track record on acquisitions is to keep the management team intact and have the local team empowered to run the business,” Blankenship said. Unlike Electrolux, Haier has little presence in the US. It has a US headquarters many times smaller than that of GE Appliances in Wayne, New Jersey and a refrigerator factory in South Carolina.

Myer class action reignited

Appliance Retailer March 2016

But GE Appliances should benefit from becoming part of Haier, which operates in 100 countries although 85% of its sales are in China, Blankenship said. “They’ve got enormous scale that they can bring to our business in areas such as the supply chain and research / development,” he added. Blankenship added that he expects Haier to allow the appliance division to keep investing about 4% of its annual sales into research and development, which lead to new business. That would be about US$236 million a year based on GE Appliance’s 2014 results. “We’ve been on a business transformation journey for the last four years,” Blankenship said, referring to the $1 billion that GE has invested. GE has retooled factories at Appliance Park, brought in new products for the fi rst time in decades and added about 3,000 production jobs since 2010. Global observers claim that the effect of that turnaround is evident in the difference between Haier’s US$5.4 billion offer for GE Appliances and Electrolux’s US$3.3 billion offer. Haier was among “more than five strategic company suitors and more than 30 private equity fi rms that were interested in bidding” on GE Appliances after the Electrolux sale was scuttled in November, Blankenship said. Haier’s offer was based on GE Appliances profits in 2014 and 2015, whereas the Electrolux deal had been based on the division’s 2013 performance. AR

BY CLAIRE MOFFAT

Legal action initiated by a Melbourne lawyer in early 2015 against Myer Holdings has been reactivated with a series of advertisements in the Australian Financial Review. Melbourne City Investments Pty Ltd (MCI), an investment company set up by former Minter Ellison partner Mark Elliott, launched legal proceedings against Myer in the Victorian Supreme Court in March last year. He alleged shareholders have suffered loss and damage as the result of statements made at the time of Myer’s 2014 results and the company’s subsequent profit downgrade. The writ was fi led in the Federal Court by Portfolio Law Pty Ltd on behalf of MCI, which was and still is seeking to bring a group action for itself and on behalf of an unnamed group of shareholders. In an emailed response to Appliance Retailer, Elliott said that he had “lots of emails in support already. I want to let all shareholders know that the case is running and that they are automatically included unless they opt out.” AR

BY CLAIRE MOFFAT

S SHAREHOLDER s Ltd WANTED - MYER ng ldi Ho ents P/L v Myer

estm commenced a ments P/L (“MCI”) lbourne City Invest Court, pursuant to Part 4A of the Me 5 201 rch Ma reme On 25 gs Limited (“Myer”). in the Victorian Sup group proceeding against ASX listed company Myer Holdin , and on behalf of alf beh n ow Supreme Court Act its MCI on ptember 2014 and s commenced by The proceeding wa uired shares in Myer on or after 1 SeMyer announced a all persons who acq shares on 19 March 2015 when se who still held tho ngrade for FY 2015. al year of in excess significant profit dow for the 2015 financi of $75-80M. net profit after tax ge Previously forecast d downwards to a figure in the ran t. ise deceptive conduc of $98.5M was rev d in misleading or ely Myer has engage ed to disclose to the market in a tim al MCI alleges that fail nci fina has 5 er that My for the 201 Further, MCI allegesard revision of its earnings forecast to suffer loss and manner the downw thousands of shareholders in Myer ny year causing ma o are included in damage as a result. er shareholders wh t Myer. contact with all My ins MCI wants to make g that it has already commenced aga and still held those the group proceedin r 1 September 2014 res in Myer on or aftet MCI at: info@myerclassaction.com.au If you acquired sha tac ail. 2015 please con shares on 19 March pation in the class action in further det tici to discuss your par Melbourne City Inv

| On the Move | The past month has seen continued recruitment activity in the industry as companies such as Electrolux strengthens its marketing team, while Breville makes a restructure. BREVILLE Breville has made two Kambrook redundancies following a minor restructure. Kambrook business manager, Richard Babekuhl and Sonja Featherstone – Kambrook sales coordinator. Babekuhl joined the Breville Group in mid-2012 as marketing and communications manager for the Australian Breville business, before moving over to the Kambrook division in 2015. Prior to joining the Breville Group, Babekuhl (pictured) worked for Electrolux Home Products in Australia and in China from 2004 across marketing, strategy and category roles.

CITIGROUP Citigroup has moved Craig Woolford into the position of director of research replacing Bruce Rolph who now has a global and Pan-Asia product role working with some of the bank’s commercial partners. However, Woolford, who joined Citigroup in 2005 will continue to lead Citi’s consumer sector team despite his new responsibilities.

CELLNET Tony Peck has been promoted into the role of marketing director with Cellnet Group Limited. He formerly held the position of national sales manager for

twelve months and prior to that was also national accounts manager for a year. Peck replaces Kristen Trappett who held the role for around three years and has now moved over to Incipio LLC as general manager.

DE’LONGHI De’Longhi has promoted Darryl Yakas to the role of national sales manager for Kenwood and Braun. Yakas, who has been with De’Longhi Australia for over twelve years, previously worked for the De’Longhi distribution partner, Parex Agency in New Zealand. He has come up through the ranks as state manager Queensland and more recently a national channel manager. Yakas replaces Arthur Banbas who left the company at the end of 2015.

DICK SMITH Former Dick Smith director of buying and marketing Rodney Orrock who left the company in late 2015 is now CEO of fashion retailer Best & Less. During his time at Dick Smith, Orrock was responsible for running the brand-label product buying and managing brands such as Apple, Toshiba and LG. He was also responsible for introducing the fitness category to Dick Smith. Prior to joining Dick Smith, Orrock was general manager for Domayne’s retail business for nearly eight years. He was also national business manager for Harvey Norman for two years. Orrock replaced Holly Kramer at Best & Less, who exited in May last year.

ELECTROLUX Karen Nguyen (pictured) has recently stepped into the role of Electrolux brand manager. She previously worked for Fujitsu General as brand manager for two years. Electrolux has also appointed Samantha Pugh to the newly created role of head of digital. She previously worked for News Ltd as digital subscriptions marketing manager from 2013. Pugh joined the company from M&C Saatchi Australia where she worked as digital account manager.

SHRIRO Andrew Frangi has been appointed NSW/ACT commercial manager with Shriro. He came from Dayton Superior where he had worked for ten months.

VALE: GEORGE ALDER George Alder, former general manager and director of R. Gunz (Photographic), passed away in February. Fresh from school, George Alder began his career way back in 1951 at R.Gunz in Sydney. He began working in the warehouse and was eventually appointed manager of the new Brisbane office in 1959. A well known industry identity, George retired in 2000 and returned to Brisbane for the last 15 years of his life. AR www.applianceretailer.com.au

AR NEWS

Hong Kong Spring Fair expands zones The Hong Kong Electronics Fair (Spring Edition), returns April 13-16 this year and is being held concurrently with the HKTDC International ICT Expo. Claire Moffat reports.

he 2015 Electronics Fair attracted 62,000 buyers, while nearly 30,000 visitors attended the ICT Expo. Both events will be held in Hong Kong at the Convention and Exhibition Centre in Wan Chai. These events will be amongst seven major fairs being held in Hong Kong in April and will attract over 220,000 buyers from all over the world. In 2015 attendance from developed markets such as the US, UK, Sweden and Korea recorded strong growth along with emerging markets such as India, Israel and Argentina. The Spring Edition will see the launch of two new zones: iAccessories, showcasing a wide spectrum of accessories for mobile and smart devices and Mobile & Smart Devices featuring the latest tablets, mobile phones and smart devices. The Wearable Electronics zone will capitalise on the latest trend of using wearable devices for monitoring health and fitness. Also showcased will be Unmanned Tech - a futuristic look at technologies including drones, quadcopters and more. Another returning zone is Connected Home which provides a glimpse into the future with the application of Internet of Things (IoT) in the home environment. Meanwhile, the In-Vehicle Electronics & Navigation Systems zone returns to the Fair with state-of-the-art audio visual systems, sensors and GPS instruments that enhance the driving experience.

Appliance Retailer March 2016

Popular product categories from the 2015 Fair included â&#x20AC;&#x201C; Bluetooth, Global Planning System (GPS), SMS, Business Applications, Linux, MMS, Cloud Computing, Liquid Crystal Display (LCD), Mobile Marketing, Software Customer Relation Management (CRM), Tablets, Point of Sales (POS) and

The Spring Edition will see

the launch of two new zones:

iAccessories, showcasing a wide spectrum of accessories for

mobile and smart devices and

Mobile & Smart Devices featuring the latest tablets, mobile phones and smart devices.

Enterprise Resource Planning (ERP). The concurrent International ICT Expo explores the latest information, communications and technologies solutions with products that help SMEs sharpen their competitive advantage. This yearâ&#x20AC;&#x2122;s event gathers almost 600 exhibitors from 13 countries and regions. There are six pavilions this year, coming

from Canada, the Chinese mainland, India, Korea and New Zealand. The iStartup@HK area was launched last year by the Office of Government Chief Information Officer to promote the innovative projects from over 20 local start-ups. Incubators including Hong Kong Science & Technology Parks Corporation and Cyberport, as well as pavilions from Canada, India and Korea have brought start-up entrepreneurs and innovators to the expo to meet potential business partners. There will be a huge focus on the world of startups in 2016 with the SuperCharger Accelerator, a Hong Kong venture dedicated to help both FinTech start-ups and more established financial technology companies capture opportunities in growing markets of Asia. The SME IT Clinic at ICT Expo will again provide free one-on-one professional consultation services for small and medium sized enterprises from such global technology leaders as Google, Kingdee, Microsoft, SoftLayer (an IBM company) and Yahoo. Various aspects of IT will be covered including developing online capabilities, increasing sales, reducing costs and enhancing efficiency. The Hong Kong Trade Development Council is offering a range of sponsorship options to Australian and New Zealand buyers looking to tap into this market. More details from the HKTDC Sydney office can be found at sydney.office@hktdc.org. AR

FEATURE

AR COFFEE

GfK Figures

OUTLOOK

 Sales of coffee machines (total) rose 0.2% (y-on-y) to 541,800 units in 2015. Category value is $161 million.  Sales of standard coffee machines rose 5.4% (y-on-y) to 166,600 units in 2015. Category value is $84 million.  Sales of pod coffee machines declined by -1.9% (y-on-y) to 375,200 units in 2015. Category value is $77 million.

Here’s what to look for in Australia’s robust coffee market BY CLAIRE MOFFAT

n a sign of a more sophisticated Australian consumer who desires not only great coffee, but premium looking machines to adorn their homes, sales of standard coffee machines rose 5.4% (year-on-year) to 166,600 units in 2015 with a category value of $84 million. According to Euromonitor Australia, sales of coffee machines (total) rose 0.2% (year-on-year) to 541,800 units in 2015, with a category value of $161 million. This tiny increase can be attributed to the

declining sales of pod coffee machines. This segment fell by -1.9% (year-on-year) to 375,200 units in 2015 and category value is now $77 million. This shift towards standard coffee machines has been a boon for several suppliers with robust machine ranges. Swiss brand Jura has experienced its most prosperous year since 2012. “Our growth has been consistent throughout 2015, resulting in an increasing market share,” Jura head of sales George Liakatos, explained.

“The biggest factor for improvement has been our continued investment in new innovations and products. For example, in the beginning of 2015 we introduced the Jura F9 which was the fi rst fully automatic coffee machine on the market to produce a real flat white (that is, pouring coffee fi rst). “The novelty of this feature is its ablity to cut through the household market and connect with those consumers who want a true café style coffee,” he said.

De’Longhi category marketing manager, Helen Finlayson confi rmed that 2015 was also a strong year. “Compared to 2014, the total espresso market has performed admirably. We have experienced growth across all sub coffee categories, and in some instances, fully automatic and Nespresso Lattissima, where we have recorded growth in double digits,” she said. One of the key factors in De’Longhi’s success in 2015 was a switch in focus from sell-in to sell-out. “We have worked hard on so many initiatives during 2015, listening to our customer and endeavoring to deliver tangible results,” Finlayson added. Over at Nespresso Australia, commercial manager John Ciaglia, stressed that the positive growth in the coffee category, “makes it an important time for us, as the pioneers of the [portion] category, to reinforce that Nespresso is more than just a machine.” “Nespresso offers the highest quality coffee, innovative machines

and exceptional customer service. Our range of innovative machines have been designed and manufactured in collaboration with leading appliance

Sales of standard coffee machines rose 5.4%

(year-on-year) to 166,600 units in 2015 with an

overall category value of $84 million.

brands Breville, De’Longhi and KitchenAid. Last year, we launched two highly popular machines, the Lattissima Touch and the Nespresso by KitchenAid. Both offered premium milk solutions and contemporary designs,” he said.

Meanwhile, Sunbeam head of product marketing, Tim Anderson attested that the company is experiencing healthy growth backed by strong innovation developed from consumer insights. “For the fi rst time, Sunbeam has entered the sub segment of capsule coffee machines with the release of two multi-capsule machines, the CM2000 and CM100. “In addition, we launched a superpremium manual machine, the Sunbeam Torino, which elevated Sunbeam to a new high price point of $1,999. The expansion of our offering into capsule and super premium manual has driven strong growth,” Anderson said. V-Zug sales and marketing manager Mark Tragear also had positive news, confi rming that sales in this category have increased compared to 2014. He attributed the automated functionality of V-ZUG’s Supremo CCSXSL60 Coffee Centre as the major factor driving company sales. AR

GfK: Espresso machines on the rise in Malaysia’s households KUALA LUMPUR: While Australians constantly reference the European coffee experience as a model for local growth (George Clooney drinking Nespresso in Italy is a pleasing sight), we often overlook the coffee culture in our closest neighbours. The rise of the café culture in Malaysia for example, has been key in stimulating the demand of having an espresso machine in one’s own home. In the first nine months of 2015, GfK point of sales tracking reported over 4,400 units of espresso machines being sold across Malaysia. “Experiencing a similar trend with its neighboring Asian markets, the coffee industry here in Malaysia is also witnessing a greater demand for high-quality brew,” GfK managing director Malaysia Selinna Chin noted. “Sophisticated consumers have learnt to enjoy the beverage as an artisanal food and not just a commodity,” she said.

According to the latest GfK report, an espresso machine in the country averages around $A364 this year, up from $A329 a year ago. However, the most premium model can go as high as $A1,016. This year, consumers have spent over $A680,000 on 600 units of espresso machines which cost over $A677. “In spite of its higher price tag, consumers who are specialty coffee drinkers see these espresso machines as an investment and are more willing to spend to get their regular coffee fix at home,” Chin said. “Considering the one-time cost of buying a machine versus the time and costs incurred by frequent visits to the café, it makes more monetary sense to invest in the former in the long run.” However, consumer spending on espresso machines has dipped in 2015 compared to 2014 by 5%. Despite this, the decline is much less when compared with the overall hot beverage maker market, which registered a substantial dip of 24% in sales value.

“The overall decline is attributed to the softening of consumer spending in general—not just in the hot beverage machine market,” Chin commented. “However, findings reveal an interesting growth trend in the market share of espresso machine segment this year. The transfer of market share from the filter coffee machine to espresso machine segment indicates that the impact of the economy is far lesser in the higherend coffee machines segment.” In 2015 year to date, the market share for filter coffee machines in Malaysia fell by 2% in value terms, which is being absorbed by the espresso machines segment that makes up 75% value share of the total hot beverage maker market. “Asia has a huge market potential for growth in the coffee and tea industry, driven by a growing young and afﬂuent urban population,” Chin said. “As the coffee culture continues to boom in Malaysia, we anticipate a sustained, if not growing demand for espresso machines in the near future,” she concluded. ◆

AR COFFEE

TRENDS

Call my coffee connected

t was bound to happen, the emergence of the connected coffee machine that can download your request from a device in one room of the house and actually make the coffee to a customised order in another. Nespresso’s John Ciagla explained, “We’ve seen growth in consumers looking for new technology such as connectivity that offers even more convenience and versatility to fit into their busy lifestyles.

John Ciagla – Nespresso.

“To meet these demands, in March 2016 we are introducing the Prodigio&Milk machine, Nespresso’s fi rst connected machine.” The Prodigio&Milk has features such as capsule stock management with quick and easy reordering, ensuring customers never run out of capsules. Additionally, the machine provides care and maintenance reminders and the ability to make the perfect coffee from a smartphone, adding even more convenience and personalisation to the Nespresso coffee experience. Nespresso’s research behind Prodigio&Milk was conducted with consumers and conclusively revealed the ever-growing role that portioned coffee has in people’s lives. Ciagla said that as a result of the study, they found that lattes and flat whites make up the vast majority of Australian coffee consumption, with 75% of fi rst morning coffees being milk based. 16

Appliance Retailer March 2016

“It’s these sorts of insights that help us understand Australian coffee lovers’ preferences and help us to offer machine solutions to cater to this. With a nation of latte-lovers, the range of coffee solutions offered by Nespresso machines provides everything from one-touch cappuccinos, lattes and espressos to cold and hot frothed milk. Consumers also have the ability to experience Nespresso in-store through our in-store tasting program, based on their coffee preference.” While Melbourne based Jura also has connected technology embedded inside its F9 machine, Liakatos maintains that the strongest trend in the coffee machine category in 2016 leans toward premium machine sales.

Helen Finlayson – De’Longhi.

.highest and most consistent increased growth, particularly in our premium segments. This can be attributed to job creation and an overall increase in consumer and business confidence in our products,” Liakatos added.

“Personalisation is also a huge worldwide trend and we are observing that across many different industries; never has it been more important to give the customer what they want.” Helen Finlayson, De’Longhi. “We are experiencing healthy growth in this segment as consumers are more willing to invest in premium products. There is also a shift back to a higher quality coffee experience, made with fresh beans, not capsulated. “New South Wales is our best performing state experiencing the

George Liakatos – Jura Australia.

De’Longhi’s Finlayson reports that one of the strongest trends the company is tapping into a renewed consumer appreciation for fresh beans. “There are so many blends and varieties on the market and the everyday coffee lover is demonstrating a huge appetite. You don’t have to be a coffee aficionado to enjoy a good cup of coffee. In fact, it is now expected, with consumers demanding a barista quality coffee not only in cafés across Australia but also from their home coffee machine. “Personalisation is also a huge worldwide trend and we are observing that across many different industries; never has it been more important to give the customer what they want; literally,” she explained.

AR COFFEE De’Longhi has conducted two separate consumer insight studies, one which spoke directly to its most recent fully automatic customers (via its database) and another, where they commissioned a general research survey to gauge the coffee drinking habits and expectations of the general public.

Tim Anderson – Sunbeam.

“In both instances we have been able to draw on the fi ndings to help develop our future strategies,” Finlayson said. In 2015, all states performed above expectations for De’Longhi, although New South Wales and Victoria were the highest performers, driving the volume due to their strong coffee cultures. “However the café scene is alive and well across Australia, and as we have seen on the eastern seaboard, consumers really want to replicate that experience in home,” she added.

Appliance Retailer March 2016

Sunbeam is building its 2016 business on manual machines. Citing latest GfK data, Tim Anderson said manuals are increasing in value share and are now bigger than automatic coffee machines. “$600 plus is the fastest growing segment in manual machines,” he said. “Consumers are demanding an improved coffee at home, one that replicates their purchase in their local café. They also want to be hands-on and a part of the espresso making experience. Coffee lovers want to show off their machines. It’s the new power statement in the kitchen and the $600 plus manual machine is the best way to do this,” Anderson said.

Trevor Wilson – Miele.

coffee, but are also easy to operate with minimal maintenance. “Both our fresh bean and Nespresso coffee machines are growing well,” Wilson advised. “Today, purchasing decisions have

“Coffee-lovers want to show off their machines. It’s the new power statement in the kitchen and the $600 plus manual machines is the best way to do this.” Tim Anderson, Sunbeam. Miele Australia product manager, built-in and refrigeration, Trevor Wilson agreed with Jura’s Liakatos that the coffee category is continuing to experience strong growth as Australians seek quality coffee machines that not only produce perfect, great tasting

become more considered as Australians seek coffee machines with the latest technology and the best value for money,” he said. “As a result, the most popular coffee machines deliver quality, ease of cleaning and maintenance, longevity, visual integration into the kitchen environment, and of course, great tasting coffee specialties equal to those of the best cafés,” Wilson said. VZug Australia director Mark Tragear holds to the position that the kitchen is the social hub of the home, where conversations and meals are shared. “This means consumers are increasingly seeking products that are quiet. V-Zug’s Supremo CCSXSL60 Coffee Centre has a built-in conical burr grinder, making the machine virtually silent when in use,” he said. “Our best performing state for our coffee machine sales is Victoria due to its vibrant coffee culture,” he added. Ilve marketing manager Daniel Bertuccio notes that coffee machines are now a common fi xture in the kitchen “with many consumers needing one [coffee] to start their day”. “We have found that there are two types of coffee consumers, the ones who long for a caffeine fi x, and then the connoisseurs who are more interested in taste and quality. Ilve and DeDietrich’s strengths are their simplicity that caters for the devotee, with one machine per brand,” he said. AR

The connected machine

Capsule stock management Never run out of capsules

Maintenance alerts Simplified machine assistance and care

Scheduled brewing at your desired time

AR COFFEE De’Longhi PrimaDonna Elite.

RESULTS AND RANGES

POWERFUL MACHINES

to drive 2016 growth

e’Longhi’s Italian product development team and designers have been working on a high end project for the last few years and are now set to launch two new fully automatic coffee machines within the PrimaDonna Elite range. According to Helen Finlayson, these machines feature cutting edge technology and product innovation. Both models ECAM65075MS $3,599 and ECAM65055MS $3,199, can be operated via an app, allowing the user to interact remotely with the machine. The user profi les of up to six people, either family members or dinner guests, can be set and saved. A few quick commands and the coffee is ready. “As part of our consumer insight study we recognised that to deliver a barista quality coffee demanded by our customers, we had to provide an alternate coffee delivery system, one where the coffee is delivered fi rst to the cup, followed by the milk. Both PrimaDonna Elite models feature this option,” she explained. Both models are high end luxury, the interface is touchscreen with animated user prompts. Finlayson also noted growth in the Dolce Gusto range, and with its exit from the grocery chain channel, it has become more relevant to electrical retail trade. Ciagla explained that the Nespresso machine range has been designed to combine contemporary design with advanced technology to bring even more 20

Appliance Retailer March 2016

convenience and personalisation to coffee lovers around the world. “New and existing Nespresso machine owners turn to us for our smart, compact and attractive designs, which is why we continue to introduce new machines to cater to every type of coffee-lover and style,” he said. “In 2015, we further expanded our ultra-compact Inissia range with two limited edition fun and playful colours. We also introduced the successful Lattissima Touch, which can create six coffee recipes at the simple touch of a button. Most recently, we introduced the Nespresso by KitchenAid machine, which offers both performance and aesthetics built with the high quality craftsmanship for which Nespresso and KitchenAid are renowned. “This year, we will be introducing a new addition to the Nespresso coffee

Nespresso Prodigi0 & Milk.

Jura Z6.

machine range, the Prodigio&Milk. Nespresso’s fi rst connected machine, Prodigio&Milk is for customers looking for the next level of convenience and versatility. With a modern compact design, this intuitively designed machine allows consumers to program their coffee experience through Bluetooth technology from their smartphone. In addition, the Prodigio&Milk includes new features allowing coffee lovers to manage their capsule,” he added. Jura kicked off 2016 with a stylish launch of its Z6 machine described as “an impressive showcase of Swiss innovation” in Melbourne in January. The Z6 achieves a new standard of coffee quality through its Pulse Extraction Process (PEP), which optimises extraction time to guarantee professional quality, barista-style coffee. Before the brewing process begins, the coffee is moistened by the Intelligent Pre-Brew Aroma System (IPBAS). This causes the pores to swell up and start to release the aroma. Next, the PEP developed by Jura, pulses the hot water through the ground coffee at the optimum frequency for the amount

Perfect barista-style coffee, every time The PrimaDonna Elite is designed with the discerning coffee-lover in mind. Just like a real barista, it delivers the coffee to the cup first, followed by the milk. With a huge variety of options to personalise your coffee, it allows you to set and save up to six user profiles, so your friends and family get their perfect coffee every time too. Use the simple and intuitive colour touch display, or communicate with the machine remotely using the clever Coffee Link app on your mobile device. Coffee has never been more personal.

WIN 1 OF 2 LUXURIOUS ESCAPES THIS MOTHER’S DAY Valued at $2,500 each* *Conditions apply. Visit promotions.delonghi.com.au for more details. The images of the prize are representative of inclusions. Hero machine featured: PrimaDonna Elite coffee machine ECAM65075MS.

FIVE STAR ACCOMMODA TION

ERIAL MOËT ICE IMP

LAGOON RO OM

BUFFET DELICIOUS BREAKFAST

www.delonghi.com.au

AR COFFEE Sunbeam EM7100.

of water. According to Jura, the PEP brings out every nuance of the aroma. With ten different intensity levels, users can customise their coffee to their own personal taste. For the fi rst time in the Jura range, the Z6 features automatic fi lter detection technology. The Intelligent Water System (IWS) automatically detects when a Claris Smart water fi lter has been inserted into the tank, thanks to modern RFID technology. Claris water fi lters supply water of perfect quality for the best possible flavour. The result is freshly fi ltered water for perfect speciality coffees and optimum protection against limescale in the fluid system. Breaking down the barriers in coffee for consumers is a 2016 goal for Sunbeam which said it will continue to drive multicapsule espresso machines. “From our understanding, we are the only supplier selling a coffee solution that can extract espresso from a number of leading coffee capsule systems,” Anderson said. In addition, Sunbeam will launch the EM7100, a premium manual espresso machine with a multi-capsule handle that allows the machine to be both a high-end manual machine and a multi-capsule machine in one. Anderson said this is the first dual coffee machine that blurs sub-categories for consumers and allows a machine to service the needs of different individuals in the household. “It will be the only machine in the market where you can switch from manual to capsule coffee with the change of the group handle,” he said. According to Miele’s Trevor Wilson, the Miele CVA 6431 is the world’s only built-in coffee machine incorporating the Nespresso system. It has a sophisticated capsule carousel with room for as many as 20 capsules in five chambers. 22

Appliance Retailer March 2016

The Miele conical grinder, embedded within the CVA 6401, CVA 6800 and CVA 6805 built-in machines, ensures even and precise, freshly ground beans. “Miele CVA 6000 coffee machines are state-of-the-art, Wilson said. “Not only do these models deliver delicious coffee specialties, they are equipped with features that truly set the benchmark in convenience.

Breville The Oracle.

The PrimaDonna Elite

machines can be operated via an app, allowing

the user to interact remotely with the machine. The user profiles of up to six people can be set and saved. Kleenmaid Caffe Italiano.

This includes innovations such as the OneTouch for Two function, EasyClick milk system and the automatic rinsing of the milk pipes,” he said. Wilson added that the Miele coffee machines are tested to the equivalent of 20 years household usage to ensure reliable service for years to come. “They are ideal for design conscious consumers, Miele Generation 6000 appliances offer outstanding opportunities for customised kitchen design,” he added. For 2016, the Ilve hero offer will be the ILEM45X coffee machine, which enables users to choose the quality of the coffee they want by the automatic grinder presets, quantity of ground coffee and coffee brewing amount. Additionally, the De Dietrich DED1140X coffee machine is an automatic machine that has an inbuilt grinder and milk frother with auto pre-sets. V-Zug’s goal in 2016 is to continue to develop premium, innovative household appliances that make life easier. Mark Tregear explained that, “Our Supremo CCSXSL60 Coffee Centre is no exception. It turns anyone in to a master barista.” The Supremo CCSXSL60 Coffee Centre has five adjustable coffee strengths from extra mild to very strong, with hot water for a cup of tea. AR

Coffee pleasure –

freshly ground, not capsuled.

Roger Federer Inspirational role model, world record holder of Grand Slam wins, greatest tennis player of all time – and coffee lover.

The perfect espresso thanks to P.E.P.©. The Z6 from JURA wows even the most discerning coffee lovers like Roger Federer. The Pulse Extraction Process (P.E.P.©) guarantees espresso and ristretto of outstanding barista quality. By automatically switching between milk and milk foam, it’s incredibly easy to prepare trend specialities at the touch of a button. Front operation and the Intelligent Water System (I.W.S.®), that automatically detects the filter, ensure perfect functionality. JURA – If you love coffee. www.jura.com

AR COFFEE

FROM THE FLOOR

It’s all about delighting the user Appliances Online, CEO, James Fleet

Whether sales are made in-store or online, coffee machines provide a strong incentive for customers to visit a retail brand and while they are there, shop around for their additional appliance purchases. “We have a very positive outlook for the coffee machine category, as it is

growing well with innovation,” Fleet said. “One of the trends we are also starting to see is previous customers coming back and upgrading to a new machine.” The coffee category is one of the most responsive to promotional activity and Fleet agrees with suppliers that their promotions assist in closing the sale. “Particularly those that complete the coffee experience such as beans, cups, installation and training. These promotions help make the coffee purchase a luxury and sensory purchase, not just about price,” he commented. Fleet added that some of the most popular brands include KitchenAid and the Nespresso Latissima Touch. “Premium manual machines are the standout across Sunbeam, Breville, DeLonghi and Bezzera ranges. They

are great looking machines to sit on the benchtop and invite the user to experiment with different coffees, strengths, blends, and milk.” He also noted personalisation as a major trend for the coffee category with technology allowing users to create coffee to reflect their personal taste. “These new features give the capability to not only control the grind and strength of your coffee, but the temperature too. We are also noticing considerable improvement in milk functions with specific settings, for example ‘flat white’ making it easier to recreate barista quality coffee in the home. This is fantastic for those that like to entertain, making it easy and stress free to cater to different coffee requests from friends,” he concluded. ◆

Retravision Esperance, Western Australia, store manager, Ben Fetherston In regional Western Australia, 700km south-east of Perth, the outlook for the coffee machine category is quite good with a strong demand for machines that retail between $200 to $400, according to Fetherston. “We have seen a shift in coffee machines away from predominantly pod machines into manual and fully automatic units. It seems like this trend will continue into the future as customers become more comfortable as ‘home baristas’ particularly in the case of the manual café style machines. “As more awareness of the environmental impact of pods comes to the fore, people who still want a quality coffee without the fuss, are slowly swapping to fully automatic machines,” he added. While supplier promotions are not critical, they certainly make a notable difference by increasing unit turnover, according to Fetherston. 24

Appliance Retailer March 2016

“In essence anything a supplier can provide, from a sell through that reduces the sale price of a product, a gift with purchase or even credit via redemption, are all important.” Fetherston says that pod machines from the Nespresso range remain his number one seller, although he is seeing consumers move away from the Nespresso product and into manual or fully automatic machines. “The features that are the most desirable are those that allow a person to create a superior cup of coffee with the least amount of fuss. Exactly what type of coffee machine this leads a person to purchase will depend largely upon their skill level and confidence with different types of machines combined with the quality level of coffee that person is expecting. “Those with more confidence or experience with coffee making /or higher expectations of the end product will

invest in a manual café style machine that allows them more control over the end product and also enables them to utilise their coffee making skills. “Those with less confidence or less fussy palates will often lean toward a fully automatic machine that allows them to experience the superior flavour of freshly ground coffee and consistent results without having to worry about all the intricacies of tamping coffee and manually frothing milk etc,” he commented. ◆

Introducing Clean Bean

The quickest and most effective way to clean your capsule coffee machine.

Through everyday use your coffee machine gets dirty.

Compatible with

Caffitaly® Nespresso® Expressi® Lavazza A Modo Mio® This product is in no way endorsed by the owners of these systems.

Descaler also available.

• World’s first capsule coffee machine cleaning tablet system

Results you can see!

• Cleans in just 2 minutes • 7x more effective than hot water alone • While descalers (also available) clean

Before Clean Bean®

After Clean Bean®

the boiler, this universal tablet system strips away old coffee residue from the coffee lines

For sales enquiries, please call 1800 239 438 or visit www.mapcoffee.com.au Available at:

“Use Clean Bean® regularly for the best tasting coffee experience.”

Justin Metcalf World Barista Judge

AR COFFEE

Sunbeam EM7100

Nespresso is set to delight coffee aficionados by introducing its first ever smartphone connected coffee machine. The machine enables users to prepare coffee remotely, be alerted when they are running low on their Grand Cru capsules and even be notified of the perfect time to de-scale or if the capsule container is full.

   

Speciﬁc capsule group handle Dedicated capsule button Multi-system functionality Choose ground coffee, Nespresso, Cafﬁtaly or Modo Mio capsules

RRP: $999

Sunbeam: 1300 881 861 Sunbeam claims its latest multi-purpose performance espresso machine is the most adaptable machine on the market. The machine offers the convenience of a capsule machine for the busy weekday mornings and a ‘real coffee’ experience for the less stressful weekends.

Nespresso Prodigio&Milk    

Capsule ordering function Automatic brewing at a given time Automatic turn off Error and maintenance alerts

RRP: $399

Nespresso: 1800 623 033

The De’Longhi product development team and designers in Italy have spent years working on the latest fully automatic coffee machines that feature cutting edge technology and product innovation. Users can operate the coffee machine remotely using an app.

Kleenmaid Caffe Italiano

De’Longhi PrimaDonna Elite  Set and save user proﬁles of up to six people  Alternate coffee delivery system – coffee ﬁrst, then milk  Touch screen interface  Easy-to-use design

RRP: $3,199

De’Longhi: 1300 126 659

Appliance Retailer March 2016

 Italian 19-bar pump and stainless steel boiler  Inbuilt steam wand for frothing and heating milk  Electronic temperature controller  Self-cleaning cycle

RRP: $279

Kleenmaid: (02) 9310 1207 This coffee machine features a customisable control panel with a patented capsule loading system for full control. It boasts automatic ejection and storage for up to 12 used capsules and the coffee will dispense within 15 seconds. It also includes a removable one litre water tank.

Taking the automatic speciality coffee machine to the next level, the Z6 sets a new benchmark standard of quality from the short ristretto to the popular flat white. In a company-first, the machine features automatic filter detection technology.

The Oracle by Breville  Automatic grind, dose and tamp with integrated Conical Burr Grinder  Option for manual milk texturing with built in thermometer  Precise temperature control limits temperature to +\- 1°C  15 bar Italian made pump

RRP: $2,499

Breville: 1300 139 798

Jura Z6  Pulse Extraction Process (PEP) optimises extraction time for professional quality coffee  Automatic switchover from milk to milk foam  Intelligent Water System (IWS) automatically detects the ﬁlter  Elegant, aluminium ﬁnish

RRP: $3,750

Jura: 1300 285 872

PRODUCT GALLERY The multi-award winning and world’s ﬁrst automatic manual coffee machine is now available in Black Sesame. It automates the most complex parts of espresso making, with hands free grinding, tamping and milk texturing making two cappuccinos or lattes in as little as 90 seconds.

AR COFFEE

PROMOTIONS

Exciting, digital and accessorised

Experience Centres and selected Chartered Agents to drive consumers in-store. The company also has its Kitchen Appliance Package Rebate for consumers who purchase a minimum of any three Miele kitchen appliances (including the Miele CVA 6431 built-in coffee machine) with a minimum value of $7,500 and claim back a 5% rebate. ◆

launch of Nespresso’s latest machines, the new promotion drove sales during the gifting season. “This again allowed us to showcase our range of highest quality coffee and introduce new Club Members to our exceptional customer service,” he said. ◆

NESPRESSO DE’LONGHI

De’Longhi’s PrimaDonna Elite will receive a full 360 degree launch that engages with media/consumers and retailers. A series of barista pop up cafes will showcase the machine and footage will provide content to be shared across social media platforms. A digital campaign will see train stations promoting the De’Longhi PrimaDonna Elite via digital messaging. The Mother’s Day promotion will offer a $250 cashback on both PrimaDonna Elite models and the chance to win one of two luxury weekends at the Palazzo Versace. Helen Finlayson said that De’Longhi’s Father’s Day accessory pack bonus was a great success last year. “We didn’t expect such a strong redemption rate, which just goes to show how important ongoing accessory sales are in our market. Our customers understand the need to clean and maintain their machines, and our care and maintenance accessories provide a simple and easy solution.” ◆

MIELE

Miele will continue to implement targeted demonstrations in Miele 28

Appliance Retailer March 2016

John Ciagla said that the company has “exciting” promotions on the horizon for the next few months. “Mother’s Day is a key promotional period and Nespresso plans to take key insights from 2015 to offer the ultimate gifting solutions during this season. While we are not able to confi rm specifics yet, we are looking for ways to further personalise our offers this year.” Ciagla explained that, in the lead up to Father’s Day 2015, Nespresso introduced a new promotional offer to trade partners, giving consumers the option of choosing either Nespresso Coffee Credit or alternatively cashback. The new coffee credit offer could be used as a discount towards an order of Nespresso’s range of 23 Grand Crus coffees. Supported by the

JURA

This year, Jura will be combining its Mother’s Day promotions with a new and exciting partnership with Cancer Council Australia to celebrate ‘Australia’s Biggest Morning Tea’. The company’s focus will be to encourage all national retailers to host a morning tea, with coffee provided by Jura. All funds raised will go to research, prevention and support services to those affected by cancer. The most successful promotions in 2015 were those directly related to its product. George Liakatos explained that the company has found time and time again that coffee promotions connect with consumers more than any other promotion. “Redemption rates for coffee promotions range from 75-80% which is exceptional. The coffee promotions re-inforce campaign messages of the importance of using fresh beans, freshly ground, not capsulated,” he said. ◆

FEATURE

AR FLOORCARE

OUTLOOK

Watch out – robots about BY KYMBERLY MARTIN

here is nothing for retailers to be skittish about when it comes to 2016 floorcare sales. The enduring appeal for stick vacs that supports the convenience factor seems to be continuing with this poster child of the floorcare sector holding its own. However, the next wave of models with the potential to become heavy hitters comes in the shape of the little robot so don’t miss the sales boat when it comes to these miniature tech babies. If you want proof of the value of these robotic models to retailers, the latest Euromonitor data from 2015 indicates sales are creeping up, rising 10.3% year-on-year to hit 190,900 units with a category value of $103 million. Total sales for vacuum cleaners rose slightly by 1.3% year-on-

year to reach 2,218,900 units with a total category value of $617 million.

AND… THE DISAPPEARING CYLINDER…

Sales of cylinder vacuums look likely to be swept away, replaced by robotic and stickvac models in some selected markets, including Australia, France and Japan. Smaller households and faster lifestyles among consumers in these developed markets are the major reason these vacuum cleaners are no longer popular, Euromonitor International, consumer appliances analyst, Thidathip Tawichai said. She also noted that multifunction features as well as improved technology in other types of vacuum cleaners have gradually made cyclinder vacuums unattractive.

No cord. No hassle. The most powerful cordless stick vacuums.

“Sales are expected to post declines over 2014-2019 with the number of single-person households in Australia set to rise by 10%. “A cylinder vacuum with a typical weight of 5-8kg is not practical for households in these markets,” Tawichai said, “compared with the lighter 2-4kg weight of a robotic or stick vacuum cleaner, depending on the model.” According to Tawichai, the iRobot Roomba is the brand leader for the category in all three countries. “The Dyson V6 stick vac brand is very popular in Australia due to its strong suction power which helps to get rid of pet hairs, whereas in Japan the Ergorapido is becoming more popular as it converts into a detachable handheld for cleaning sofas and mattresses.” AR

TRENDS

When technology intersects with ﬂoorcare

obotic technology is where it is all happening with some big guns in floorcare – Dyson, Samsung and LG, all putting new products into the category this year. And, for a sneak peek at what popped up at CES in January, it was hard to miss the Deeebot D45 from Ecovacs Robotics that mops and vacuums. Samsung’s latest model, the Powerbot VR9300 with enhanced suction and digital mapping system was unveiled at CES too, but no word yet on a local release date.

Glenn Andrew – Dyson.

Improved technology in robotic models is clearly fuelling sales growth for these devices, delivering not just longer battery life and increased suction power but being able to control these models by smartphones away from home. While Dyson is ‘keeping mum’ as to when it will release its much anticipated Eye Robot 360, you can put your money on it happening sooner rather than later. What we do know is that it carries the latest in digital motor technology that will take Dyson fairly and squarely into the connected home.

According to LG Home Appliances manager, Brad Reed, robotic vacuum options will continue to evolve and gives an example of this with LG’s latest robotic model, the Roboking that sports a built-in security camera, and will be released later this year. “As more products like this become available, we foresee that the very nature of the role of a vacuum cleaner in the home will change. Now you can monitor your home when you are out, be alerted to motion in the house and clean when you are not at home,” he said. Samsung is equally positive about the prospects for robotic technology heading into the Internet of Things space (IoT), with Samsung head of home appliances, Mike Lilly, talking up the company’s floorcare platform with the Powerbot vacuum cleaner. “The Powerbot was well received in the market and demonstrates the future of robotic technology, as well as the IoT through the Wi-Fi enabled Powerbot,” he said. Bosch told AR it has no plans to enter the robotic category in the near future with the focus on barrel and cordless models worldwide for 2016.

Brad Reed – LG Home Appliances.

Mike Lilly – Samsung.

Dyson can take credit for being the top performing small domestic appliance brand on the back of double digit value growth from 2014, thanks to its popular V6 handstick range. “The launch of the cordless Dyson V6 Absolute in 2015 made the biggest impact on our floorcare category,” Dyson Australia managing director, Glenn Andrew said. Increases in high density housing, timepoor consumers and owning more than one vacuum are the trends as Andrew sees them. “The growing prevalence of allergies means there is a large focus on high performing models that can remove as many allergens as possible.” According to Bosch head of marketing - consumer products, Jacqueline Howard, innovation in cordless models is driving a new ‘spot’ cleaning trend. Bosch research shows that the average frequency of vacuuming per household each week has increased to 3.6 times versus a canister vacuum with an average usage of 1.6 times a week. “Our research also indicated that 25% of consumers now own more than one vacuum cleaner in order to accommodate different cleaning surfaces

AR FLOORCARE and occasions. Cordless vacuums are becoming even more suitable for a wider range of applications around the home.” When you get a company the size of LG placing floorcare as one of its key growth engines for 2016 you know floorcare business is not to be taken lightly. The word from LG is that it plans to grow its vacuum business substantially from its current small base with the intention of becoming a far more significant player in the category. As well as predicting further developments within the robotic space, Samsung’s Mike Lilly, expects there will be more products that incorporate Wi-Fi capabilities with remote control access via a compatible smartphone or tablet.

Kristine Collins – Sebo.

Our research indicates that

25% of consumers now own

more than one vacuum cleaner for different cleaning surfaces and occasions.

Derek Haley – Electrolux.

According to Electrolux general manager – floorcare, Derek Haley the biggest change the company has made based on customer feedback is the introduction of its Platinum Service for the new range of Ergorapidos. “This makes it much easier for our retail partners and consumers. If a consumer has a concern, a lot of the time, it is around how they are using the product rather than it being faulty. Now, they can ring into the dedicated Platinum Service line, and if the nozzle or hose is blocked, they can talk them through how to clear it. If, at the end of the process there is something wrong, we will replace it directly and manage the entire process. “Platinum Service was introduced on our premium bagless canisters-the Ultra Flex range and it was very successful with less than one per cent of products

Garth Michalson – Cleanstar. 32

Appliance Retailer March 2016

changed over. The return rate on the products considerably declined as well.” “We see this as a win-win offering for the retailers while boosting the level of overall consumer satisfaction,” Haley added. Stick vacs are also top of mind at Bissell with the popularity of these models expected to continue according to Bissell managing director, Chris Egan. He said Bissell will bring innovations across its entire range this year from convenience cleaning to intensive carpet

The Dyson V6 Cordless Stick Vacuum – a powerful, compact cleaning machine.

shampooing. There will also be new entries that Egan said combine a new approach and new technologies. Cleanstar managing director, Garth Michalson, concurs with Chris Egan when it comes to the popularity of stick vacs. “These have had a huge impact this year and are popular for convenience, improvement of lithium battery technology with higher voltage and better performance.” It was a u-turn for Sebo with product manager, Kristine Collins giving the sales nod to upright models. “Uprights are becoming increasingly popular again and are ideal for niche piled carpet with consumers spending big on luxurious textures. For Miele, the biggest trends have transpired from the proliferation of new segments. “Consumers are demanding greater choice and convenience from the floorcare category,” product manager, Sharon May said. AR

Sharon May – Miele.

No cord. No hassle. The most powerful cordless stick vacuums.

AR FLOORCARE

RESULTS AND RANGES

You’ve got to hand it to the

handstick

Dyson V6 Absolute.

hen it comes to big spenders in research and development Dyson’s commitment is impressive. The company is investing $2.9 billion to propel the launch of 100 new Dyson products in the next four years. “We have also invested $300 million in a new robotic manufacturing line in Singapore to develop the next Dyson digital motor,” Glenn Andrew said. With fully integrated electronics, the latest digital motor will spin at up to 100,000 revolutions a minute “running five times faster than a Formula 1 car.” It is the beating heart of the Dyson V6 and will also be the motor for the upcoming Dyson 360 Eye Robot. In May, Bosch will launch the latest in cordless stick vacuums cleaning technology, the Athlet Runtime Plus. The Bosch Lithium-Ion technology ensures operation up to 75 minutes, “and will deliver the longest cordless runtime in the Australian market on a single charge”, Bosch’s Howard said. “The handstick has a sleek design and stores easily, with a 0.9L dust

Appliance Retailer March 2016

container providing ample volume for most consumer requirements. “The model also comes with SensorBagless technology with LED alerts for when the fi lter cartridge needs cleaning. This feature-rich machine has three speeds, a three-step battery status indicator, easy clean floor head and removable nozzle brush roll all within a lightweight 3kg. A motorised AllFloor HighPower brush cleans all surfaces from deep carpets to hard wooden floors. The Pro Accessory Kit contains an adapter with hose for car and sofa cleaning, an attachable short handle with adjustable carry strap for alternative cleaning uses plus upholstery, crevice and car seat nozzles. Close attention has been paid to keeping the appliances as quiet as possible, with some models incorporating SilenceSound Systems to reduce the volume from the unit to below the level of everyday noise.

Bosch Athlet Runtime Plus Cordless BCH6AT25AU.

Bissell Bolt Ion 1311F.

With fully integrated electronics the latest digital motor

developed by Dyson will spin at up to 100,000 revolutions

a minute – running ﬁve times faster than a Formula 1 car.

It seems nothing beats convenience when it comes to floorcare which probably explains the hike in demand for stick vacuums. “These machines are designed to make life easier,” LG’s Reed said. Dual functionality, longer battery power, an anti-tangle brush and LED lights for cleaning dark areas, are features on the company’s popular CordZero handstick. One of the company’s most successful promotions in 2015 zeroed in on a digital marketing campaign with a series of eDMs that

Powerful, cordless, and with the longest runtime. With an ultra-light accessory kit included for those hard-to-reach spots, the Athlet Runtime Plus is well-equipped for cleaning floor to ceiling and in-between.

SensorBaglessâ&#x201E;˘ Technology powered by

Li-ion Technology

www.bosch-home.com.au

The Athlet Runtime Plus accessory kit includes an attachable adapter with a hose, shoulder strap, an upholstery nozzle, crevice nozzle and car seat nozzle. @BoschHomeAU

AR FLOORCARE

Sebo Felix Premium Upright — Rosso 9809AU.

supported by a new mid-price point bagless canister range in April as well as another mid-price point bagged canister range in June. No changes are expected to the UltraOne range this year. “We are also hoping to enter a couple of categories later in the year – watch this space,” Haley added. Over at Samsung, it was the year for robots. The current line-up includes the top-of-the-range Powerbot VR9200 with suction power capabilities, as well as two robot sweepers, the VR5000 Point Clean and VR5000 Light. “Samsung wants to bring products to market that combine simplicity, performance, technology and innovation,” said Mike Lilly. This includes everything from simplified designs, intuitive features or outstanding

Samsung wants to market offer a $75 cash back on the CordZero handstick and $100 cashback attached to the CordZero canister. Electrolux is gearing up for a refresh on almost every product in its floorcare range before the end of the year. According to Haley, the fi rst stage of the refresh will be a new range of Ergorapido two-in-one handstick vacs. “The key to the Ergorapido is the usability of the product. At just half a kilo in the hand during operation, anyone can be holding a baby in one hand, and cleaning the house with the other. This is a difficult task for some of the leading competitors in the category,” he said. The other key benefit of the Ergorapido is that it looks good so the product can be left out on display around the home. The range of colours available allows the product to suit consumer lifestyle preferences. But its main benefit lies in its versatility as a grab-and-go product that can be used for a quick instant clean and then it is there to be used for next time,” Haley explained. The new Ergorapido range has grown by two additional premium models which are either bundled with multi-purpose cleaning tools or a pet upholstery cleaning pack. All eight models range in RRP from $209 to $349 and feature Lithium battery technology which increases the run time by 33% than the previous range. The top of the range Ultrapower 7 Series Tungsten model features run-time of 60 minutes at $449. The Electrolux new premium UltraFlex bagless canister models are expected to be released in September, 36

Appliance Retailer March 2016

products that combine simplicity, performance, technology

and innovation with intuitive features and connectivity.

connectivity. “Visionary floor mapping technology in the Powerbot range can map the floor of a room to help deliver an even clean across the surface.” Sales at Sebo have been strong thanks in part to the company being awarded Choice’s top spot again this year for the K3 premium barrel, that helped improve brand awareness, Collins said. “We have won the number one vacuum rating by Choice for the past six years. This is a wonderful accolade and

LG CordZero Handstick VS8402SCW.

Stellar 2-in-1 Stickvac.

marketing tool for retailers. “It is also great news that Harvey Norman stores are stocking Sebo vacuum cleaners, supporting not only electrical franchisees but flooring franchisees too. Sebo can tackle all types of hard floors and carpets, even plush pile with ease,” Collins explained. “Sebo have been at the forefront in technology that allows automatic floor head adjustment. This automatic brush height computer controlled technology was developed by Sebo over 24 years ago and is a feature of the Sebo X4 automatic upright,” she added. 2015 was defi nitely a solid year for floorcare, according to Bissell’s Egan, with the segment continuing to outperform most appliance categories. “Floorcare delivered consistent growth, high sales and profit per square metre, retail theatre potential and good price stability with margin retention,” he said. Also reporting strong sales is Miele with an 11% MAT growth in value sales. “This is a robust achievement given that the Miele brand participates in only the bagged canister, stick and robot vacuum cleaning space,” May said. “Miele makes up 77% of the bagged canister market and is driving growth in this segment.” The best performing states for Miele are Victoria and Queensland. At Cleanstar, the star performers are the Stellar stickvac and the European Butler canister dry vacuum cleaner. The 25.2V, 2-in-1 Stellar with a detachable handvac is aptly named. It gives up to 50 minutes charging time, has two speed vacuum modes and includes a motorised roller brush for carpets and hard floors. With the catchphrase ‘Butlers these days have more power than they used to’ this 1200W cleaner with 10L capacity, rubber bumper protector and 12m cable is available in yellow or blue. AR

LG CordZero Handstick VS8402SCW  Anti-tangle brush for easy hair removal  Compact, lightweight and durable inverter motor  Built-in brush for spot cleaning without having to attach separate accessories  Easy grip handle and swivel head

Sebo Felix Premium Upright – Rosso 9809AU

RRP: $449

LG: 1300 542 273 With a running time up to 60 minutes in regular mode and 40 minutes in power mode plus a 94.4% ﬂoor pick-up on hard surfaces and LED lights for cleaning dark areas, this stickvac delivers on convenient, hassle-free features.

 Deep clean swivel power head  S-Class filtration  Detachable portable above the floor vacuum  Hard floor capable  Optional UHS polishing head

RRP: $1,199

Sebo: 1300 697 326 Made in Germany this lightweight and versatile high performance cleaner has changeable cleaning heads for cleaning carpets, hard ﬂoors and stairs. It boasts a swivel neck for steering around furniture and adjustable handle.

PRODUCT GALLERY Dyson V6 Absolute  Soft roller head  Two motorised heads  HEPA ﬁltration for allergy sufferers  20-minutes run time  Push button hygienic bin emptying

RRP: $899

Dyson: 1800 239 766 An easy to use cordless vacuum with 75% more brush power than its predecessor, the V6. The V6 Absolute will take care of ﬂoor to ceiling cleaning, including carpets and hard ﬂoors. It converts quickly to a handheld for those in-between cleans.

www.applianceretailer.com.au

AR FLOORCARE

Bosch Athlet Runtime Plus Cordless BCH6AT25AU  Operates up to 75 minutes  Three speeds – includes one turbo  Attachable short handle with carry strap for alternative cleaning uses  AllFloors motorised HighPower brush

Stellar 2-in-1 Stickvac  Two-speed vacuum modes  Three hours charging time  Up to 50 minutes operating time  Motorised roller brush for carpets and hard ﬂoors

RRP: $699

Bosch: 1300 368 339 Apart from the industry leading running time, the latest addition to the Bosch Athlet has a 0.9L dust container that provides ample volume for most consumer cleaning requirements as well as LED alerts for when the ﬁlter cartridge needs cleaning.

RRP: $199

Cleanstar: 03 9460 5655 This 25.2V lightweight rechargeable battery powered stickvac with detachable handvac is competitively priced and designed for quick assembly and easy storage where space is tight.

PRODUCT GALLERY

Bissell Bolt Ion 1311F    

Compact, foldable and lightweight Lithium Ion battery 40 minutes run time Brush accessories for pet hair, soft ﬂoors and multi-surface cleaning

RRP: $349

Bissell: 1300 2477 355 A key feature of this ‘whole house’ stickvac is EdgeReach technology that drives suction right to the edge of skirting boards without missing a beat. The hand vac comes with a convenient extendable wand, dusting brush and 6-inch tool.

Appliance Retailer March 2016

FROM THE FLOOR

Conﬁdence and convenience in the driving seat

Retravision Kununurra, Western Australia, store owner, Chris Burke

Chris Burke’s target market is mainly focused on entry level products. He sells vacuum cleaners to young, working to middle class consumers, who often opt for cheaper models to get them by, rather than invest in more expensive models, marketed by suppliers such as Dyson.

Burke’s Retravision store is located in far northern Western Australia (population approximately 6,500) approximately 1,000km northeast of Broome and 800km south-west of Darwin. “Most of our customers purchase traditional barrel vacuum cleaners, priced between $100 and $200. In comparison, we would sell less than a dozen robotic vacuums per year, particularly due to their higher price range, which does not appeal to our primary demographic,” Burke said. According to Burke, the Australian dollar, fuel prices and grey nomads (people over 55 years of age who participate in long-term camping trips

around Australia), significantly impact on consumer confidence. “The WA mining royalties paid to the State Government used for law enforcement, education, health, roads and community development programs, meant businesses were relatively unaffected by the fi nancial disaster after the GFC. “However, since the mining boom came to a halt in 2014, consumers have been cautious about spending and the floorcare category has been reasonably flat,” he said. Although, Burke stressed that supplier promotions were very important as an extra incentive to encourage consumers to make the purchase. ◆

The Good Guys Floorcare Expert, Lynette Chetcuti Contrary to Burke’s outlook for the floorcare category, Lynette Chetcuti is anticipating growth in the category throughout the coming year, with the expectation that stick vacuums will continue to grow in popularity. “There is also much anticipation around the launch of Dyson’s robotics range which is expected to have an umbrella impact on the entire floorcare category,” she said.

“Stick vacuums are extremely popular as customers look for more convenient cleaning solutions, often purchasing a stick vacuum as a secondary alternative for quick cleans, as bagged vacuums see a resurgence,” she added. Chetcuti also noted that steam mops continue to grow in popularity as customers opt for higher specified models that deliver on the customer expectations. ◆

The Good Guys whitegoods manager, Aurora Sciarra. www.applianceretailer.com.au

AR FLOORCARE

Why Godfreys is going green Company enhances offering with acquisition.

odfreys’ decision to acquire New Zealand’s eco-friendly commercial floorcare specialist, The Service Company (TSC), is good news for the industry as the retailer moves swiftly to fight back after reporting a 16.7% slide in fi rst-half profit to $4.5 million in February. The decline in profit was attributed to a poor response to changing trends in the floorcare sector, including demand for stick vacuum cleaners, as well as a rise in the cost of doing business with nine store openings and three stores brought back under company ownership. The acquisition means Godfreys will roll out eco-friendly cleaning products across its retail network of 223 stores in Australia and New Zealand as consumers shift to a more environmentally-friendly approach when it comes to vacuuming. In a statement to the Australian Securities Exchange (ASX), the company stated, “The acquisition will

PROMOTIONS

provide a springboard for growth in the highly fragmented $500 million part of the commercial cleaning sector in which Godfreys operates. “Godfreys will have access to TSC’s unique and highly complementary product range, particularly in the growing environmentally friendly space. Godfreys has also secured the services of TSC owner and well regarded operator, Ian Jemmett, who is a

Upgrading and educating: a common theme

BOSCH

Bosch will have a strong marketing presence across print and online platforms in 2016. To ensure a premium brand experience in-store, focus will be placed on premium point-of-sale with key communication to users outlining the features and beneﬁts of the Bosch ﬂoorcare range. A national trade launch event is scheduled for mid-2016 to showcase a new range with innovative features. 40

Godfreys chairman, Rod Walker.

prominent operator in the New Zealand commercial cleaning market and has a strong reputation as an innovator and experienced operator in the field.” Commenting on the company’s results and acquisition plans, Godfreys chairman, Rod Walker said, “This acquisition takes our commercial cleaning business to the next stage in Australia and New Zealand; this is an exciting opportunity for us to scale up our operations and bolster our product offering in this space. Commercial cleaning is a market that is experiencing good growth, and TSC brings a vast range of highly complementary, environmentally friendly products and a strong client base to our business. “There is a growing trend towards environmentally friendly products and this will be a significant enhancement to our offering. We look forward to developing this side of our business further and to capitalising on the growth in this market with an innovative product range,” he said. AR

Appliance Retailer March 2016

ELECTROLUX

Electrolux will be extensively upgrading its in-store display presence. Simultaneously, the company will invest time and resources into promotions within the store and educate the consumer around its beneﬁts versus competitor models. Electrolux general manager of ﬂoorcare, Derek Haley said this would focus on around ease of use, as well as Electrolux’s unique Brush Roll Clean technology.

CLEANSTAR

Engaging with the retailer and distributor is top of mind at Cleanstar. The company said it works with both on speciﬁc marketing campaigns according to their clientele and speciﬁc requirements. Cleanstar, wholesaler of commercial as well as domestic vacuum cleaners, is going into the 2016 market with its award as RapidClean’s Machinery Supplier of the Year for the second year running .

FEATURE

AR MOTHER’S DAY

OUTLOOK

How Smalls are punching above their weight There is no escaping the healthy living trend that when it comes to benchtop appliances. Leading suppliers spoke to Kymberly Martin about their new products and how they are positioning them for Mother’s Day.

hey might be small domestic appliances but when it comes to sales, premium products that are pushing the boundaries as demand hits a high. This is a category where prices are holding up, from $800 for Smeg and Breville mixers to Tefal’s Cuisine Companion at $1,699. In addition to multifunction features this category is also being driven by the promotion of healthy cooking and product promotion from cooking shows. According to GfK (MAT November 2015) the benchmixer category rose by a mighty 41% in the above $500 price segment. Consumer buying alert for retailers: your customers are buying more food

preparation devices and toasters, but fewer kettles according to Euromonitor Australia data for 2015. Sales of food preparation appliances rose 4.8% (year-on-year) to reach 2,944,200 units with a category value of A$390 million while toaster sales increased 2.1% to 1,886,900 units with a category value of A$81 million. Kettles declined by 3.5% to 1,924,700 with a category value of A$133 million. Euromonitor data also showed record strong growth for high-end food processors with a CAGR (compound annual growth rate) of 35%. The wellbeing sector is another category with growth potential as consumers move away from carbonates to fresh juice, driven mainly by the popularity of coconut juice. AR

Style • Power •

TRENDS

When only Premium it is

Bettina Ortega del Rio – Groupe SEB.

Jim Kalotheos – Smeg.

meg is crediting the introduction of its fi rst small appliance range for creating a new category of high end products. Launched in mid2015, the kettles and toasters became an immediate success without any support from an expensive marketing campaign or high profi le brand ambassadors. As national marketing manager, Jim Kalotheos explained, “it sold purely and simply on brand strength, superb design and a perfectly calibrated colour range”. The soft pastel colours with cutting edge styling

As Turnbull observed, when it comes to modern kitchens, appliances need to earn their place on the benchtop. De’Longhi category manager Helen Finlayson pointed to the selling opportunities during the peak gifting periods like Mother’s Day, particularly when it comes to premium lines. “There is defi nitely growth coming from this category, driven by products selling above $300,” she said.

Helen Finlayson – De’Longhi.

There is no doubt lifestyle and cooking shows like My Kitchen Rules, continue to pull in big audiences and all those consumers watching at home are keen to develop their home cooking and baking skills. “Consumers are looking for equipment to help them achieve the results they see on TV and online,” Kenwood category marketing manager, Eleanor Moss, said. “This is where kitchen machines and attachments come

SMAS16811

Torque

proved to be a winner with consumers and also included a stand mixer, joined later with a blender. Sales for the Groupe SEB group certainly reﬂect the growing swing for food preparation appliances and to a lesser extent, deep fryers. Senior brand manager, Bettina Ortega del Rio, said small domestic appliance kitchen categories, in particular the Tefal range of smart appliances that ‘cook for you’ have brought a revitalised lease of life to the range. “Changes in consumer trends inﬂuenced the total product mix from Tefal in 2015, as consumers seek time-saving solutions and aspirations of healthy cooking.” Ortega de Rio also acknowledged the impact of the ‘thermo cooking’ trend on consumers who are increasingly showing more interest in this new category, “primarily due to word-of-mouth and the need to feel that they are not missing out on something”. Sunbeam general manager marketing, John Turnbull, has identified the rise of open plan living, which means appliances are more on show than ever before. “For some consumers, the aesthetics of the product are the most important aspect, to ensure these either fit seamlessly into kitchens or make a statement. There is a blurring of lines between categories and sub-categories as consumers become more discerning and demand their appliances serve more than one purpose.”

John Turnbull – Sunbeam.

AR MOTHER’S DAY in.” According to Moss, personal blenders have recently become very popular for quick, on-the-go nutrition while bench blenders deliver for consumers who want a more versatile cooking solution. Just in time for Mother’s Day selling is the new Kenwood Chef Sense colour collection, inspired by the appealing direction to ‘soft pop’ pastel colours. There is lots of news emerging from Electrolux, and not surprisingly there is also a clear focus on premium pricepoints driven by design and colour inﬂuences from European fashion and style. “Retailers are moving into premium pricepoints by presenting colour options, giving consumers the

Sharon Lenzner – Breville.

ability to refresh their home on a regular basis,” general manager small appliances, Derek Haley said. “Our modern palette of colours allows consumers to match their household products with their fashion choices,” he said.

Products that allow users to

take full control of their food

preparation needs are now at the forefront of consumer purchase trends.

According to Breville business manager – cooking and food preparation, Sharon Lenzner, multicookers are also addressing a number of food trends allowing consumers to cook a variety of foods from scratch and control the ingredients used. “These are products consumers are willing to pay extra for in order to achieve healthy, café inspired meals quickly and easily,” she said.

Stacey Pogorecki – Morphy Richards.

Since streamlining its core range, expanding distribution and introducing new collections and categories, Morphy Richards is confident of becoming a major player in this space, according to product marketing co-ordinatorsmall appliances, Stacey Pogorecki. “We have seen trends shift towards the monochrome colours this year with clean and crisp white, black and stainless steel proving popular across all breakfast collections.” The company is also adding new products to the food preparation and kettle and toaster categories for Mother’s Day. Another interesting trend is coming from the nutrition extractor sector which is delivering strong sales for Goldair and its NutriBullet range of personal liquidisers. According to Goldair director, Chris Bremner, the NutriBullet has delivered exceptional growth to food preparation category value, by increasing the average selling price and margin dollars across the retail channel. Products that offer simplicity and time-saving features and allow users to take full control of their food preparation needs are at the forefront of consumer purchase trends. Fitting neatly

Chris Bremner – Goldair.

into this is the move to healthier ways to prepare food and take full control of what goes into the meal is also the view of Pro Appliances national sales manager, Mathew Kiley. “In response to this change we have added products such as the ThermoPro to our growing family of healthy-living appliances which cater to the needs and interests of the growing health conscious consumer.” AR 44

Appliance Retailer March 2016

Those with style can mix with the best.

SMAS16810

full range available in red, black, panna (cream), silver, pastel blue, pastel green and pastel pink

AR MOTHER’S DAY

RESULTS AND RANGES

A carefully crafted, colourful

Mother’s Day

meg is getting into the pink and pastel green too, with a perfectly timed new colourway addition to its stand mixer and blender for Mother’s Day selling. And that’s not all. A range of accessories for the stand mixer will be introduced later this year which Jim Kalotheos believes will make it “the most versatile and accomplished food

SMEG STAND MIXER SMF01PAU.

preparation appliance available.” As well as its elegant and sinuous profi le, the Smeg stand mixer has some stand-out features serious bakers will appreciate. Among them are the 800W high-torque motor, a soft-start action to prevent ﬂour plumes and splashes, a 4.8L capacity bowl and 10 speed options, controlled via a top-mounted gear stick designed for both right and left handed use.

The Tefal Cuisine Companion replaces up to 10 appliances

and performs over 11 functions. Heading the small domestic appliance news for Tefal is the Cuisine Companion, an all-in-one machine that can replace up to 10 appliances and performs over 11 functions, designed to bring French style to the modern kitchen. Tefal is building on its success, adding two new time saving attachments for Mother’s Day. The Steam Basket offers 46

Appliance Retailer March 2016

Tefal Cuisine Companion with Steamer Basket. multi layers of cooking options and the Vegetable Shredder has up to five cutting functions. The company is also upping the ante in the grilling and rice cooking stakes with two new products. The OptiGrill+XL has a larger cooking surface with 33% more grilling space and three new programs. New Rice/ MultiCookers come with two unique bowls. For picking up those add-on accessory sales, there are new ceramic coated plates.

The Intelligent multicooker that cooks delicious meals for YOU!

Less Than 12 Minutes

85+ IN BUILT RECIPES

EASY TO USE

COOKS FAST

Access starters, mains & desserts with the easy to use interactive control panel.

Choose the recipe and 2-6 serving size & Cook4Me does the rest

50+ recipes cooked in less than 12 minutes.

AR MOTHER’S DAY Sunbeam London Collection Conventional Kettle KE2110.

According to Sunbeam’s John Turnbull time is precious so timesaving and convenience driven products have become increasingly attractive to consumers. “Products such as the new Sunbeam Turbo toaster which toasts bread in one-third the time of a standard toaster, is a perfect example of this.” For Mother’s Day the company has gone all British launching the London Collection of kettles and toasters in a stylish matte fi nish in four colour versions. There are two kettle designs to choose from, each retailing at $129, featuring a 1.7L water gauge. A two slice toaster retails at $129 and a four slice toaster is $149 RRP. The

“We are focusing on taking the fear factor away from cooking and making it accessible for everyone.” – Morphy Richards, Stacey Pogorecki.

Morphy Richards Total Control Hand Blender Set. toasters come with features that include variable browning, self-centring slots and a removable crumb tray. Morphy Richards is also in expansion mode adding to its benchtop collection in March with Total Control, a new lineup of small electrical appliances aimed at the ‘inexperienced cook.’ The first products to come out of this stable are three blenders, comprising a hand blender, hand blender set and work centre. “We are focusing on taking the fear factor away from cooking and making it accessible for everyone. This new range is designed to be a helping 48

Appliance Retailer March 2016

hand in the kitchen,” Stacey Pogorecki said. Also popping up from Morphy Richards for Mother’s Day are Matte Accents, a range of kettles and toasters in a palette of three pastel shades which are a special edition release to mark the company’s 80th anniversary. Kettles retail at $149.95 and the toasters are $159.95. Kenwood has married 65 years of food preparation know-how into the very fabric of its new Chef Sense range of kitchen machines. “Every dial, switch and attachment has been carefully crafted to give the ultimate control over recipes,” Eleanor Moss said. “The intelligent electronic control accurately senses the load optimising mixing performance.” The new matte colour palette gives a modern feel to the range with a glass bowl adding visual impact. Rounding out the new range is the KSense breakfast set which Moss said takes its design cues from the award winning Chef Sense. The Persona breakfast set includes a variable temperature kettle as well as a glass kettle and toaster.

De’Longhi’s Helen Finlayson said the health and wellbeing trend continues to stimulate growth in many small appliance categories, especially when it comes to low-oil fryers. “The combination of being time poor, together with a healthy eating plan has been a strong driver in ‘multi’ appliances too.” Recent company research showed that

Kenwood Chef Sense Mixer KVC50. 78% of people surveyed admitted their family meals were not always as healthy as they could be. “This enforces the consumer need for an appliance such as MultiFry that can provide a healthier, faster alternative to traditional fried foods,” she said. The MultiCuisine is De’Longhi’s hero product in the low oil fryer market with a 1.7kg capacity that gives up to eight portions of fresh chips.

The all-in-one kitchen wonder machine. WITH 6 AUTOMATIC PROGRAMS

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AR MOTHER’S DAY

Time-saving and convenience

driven products have become increasingly attractive to many consumers.

For Electrolux, the Masterpiece Collection launched in 2015, remains at the top end of its small appliance business, Derek Haley said. It is available with an Immersion Stick Blender, Food Processor and the range hero product, the Benchtop Blender. “We have conducted some recent testing and the performance of the Benchtop Blender will be reinforced once the survey is released. This product is particularly effective at maintaining high nutrients during the blending process,” he said. While Electrolux is staggering its SDA product releases, a new range of small appliances is expected to be introduced early in 2017. There are no surprises when it comes to hero products for Pro Appliances.

The health and wellbeing trend continues to stimulate growth in small appliance categories.

The ThermoPro was designed with the concept of convenience cooking and quick and easy preparation of healthy food at its core. If offers the function of 10 appliances in one compact, portable unit, making it a real space saver in the kitchen. It has 15 auto programs on board and comes with a bonus mixing jug valued at $199.95. Goldair’s Chris Bremner said consumers can expect to see some significant technology advances for NutriBullet this year. “These will further enhance the consumer experience while retaining the design aspects that remain distinctly Bullet 50

Appliance Retailer March 2016

branded,” he said. The NutriBullet RX with its 1700W engine is claimed to be the most powerful nutrition extractor on the market and comes with the added benefits of a unique heating function. Also singing the praises for the premium sector is Breville, as it launches the Bakery Boss mixer with a 1200W heavy duty motor, that the company claims is the most powerful mixer in its class. In development for three years, Bakery Boss features a sturdier construction and head locking mechanism for a more secure footing when mixing heavy loads such as dough. “Performance has been enhanced and airﬂow around the motor improved for increased torque and longer, continuous running times,” Sharon Lenzner said. Another new entrant in the small domestic appliance stakes is Ariete. The range, which includes electrical graters, a cordless slicer and chopper/grinder, hails from Florence. A new ‘fun party’ range will be the focus for Mother’s Day and kicks off with three products, Popcorn, Wafﬂe and Slushy Makers priced from $49.95 to $59.95. With a view to stepping up the Westinghouse small appliance and cookware presence in the market, Phil Peclaris, managing director of RVM Australia (the Westinghouse licensee for these categories) hired consultant and industry veteran Spiros Scafidas to review the initial strategy and create a foundation by developing a new range for 2016.

With the help of Scafidas’ expertise, Westinghouse has developed a totally refreshed range of toasters, kettles, frypans, and stick mixers for 2016 and will also be entering the steam iron category with a full range. “We are very aware that there is no shortage of products or brands in the market,” Scafidas said. “For this reason our focus was on developing stylish, contemporary products at competitive price points while at the same time providing our retail partners with some enhanced margins.

Breville Bakery Boss BEM825. “RVM’s offer had to have a point of difference to make it appealing for retailers to stock. Design and quality have to be a given. The challenge was to be able to give the retailers some margin upside while remaining competitive and relevant. We think we have largely achieved this and thankfully the strength of the brand and its positioning sits perfectly with our objectives,” he added. Over the coming months, Westinghouse will roll out 24 new products or variants thereof, with 19 small appliance products as the cookware category will see the addition of utensil sets and salt and pepper sets. “The products reﬂect the brand positioning perfectly, and the trade response to the package that we offer has been more than encouraging,” Scafidas concluded. AR

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AR MOTHER’S DAY

SMEG STAND MIXER SMF01PAU  800W motor  Variable 10 speed control with soft start function  Low speed for attachment hub  Planetary mixing action  Standard and optional accessories

RRP: $799

Smeg: 02 8867 4888 No surprises that this stand mixer took out international design awards in 2015. The familiar retro inﬂuence and iconic 50s style logo perfectly complement the larger kitchen appliances.

Morphy Richards Total Control Hand Blender Set 650W motor 500ml multi-vessel Lifetime guarantee on the Serrator blade Stainless steel leg/beaker/mashing and whisk attachments  Two year warranty    

RRP: $149.95

Glen Dimplex: 1300 556 816

PRODUCT GALLERY

Breville Bakery Boss BEM825    

Sturdier diecast construction and locking 4.7L borosilicate glass bowl with illumination Re-designed dough hook and whisk Available in ﬁve high gloss metal ﬁnish colours

RRP: $749.95

Breville: 1300 139 798 Who’s the Boss? In this case it’s the only glass bowl mixer with a dual sided scraper beater designed to give up to three times more efﬁcient mixing than any other glass bowl mixer.

Appliance Retailer March 2016

A blender set made to give conﬁdence to the novice cook that features smart response technology for total control at the press of a button, is easy to use and comes with several useful attachments.

Tefal Cuisine Companion  New shredder accessory – up to ﬁve cutting functions  New steam basket – for gentle steam cooking  Over 11 functions including emulsifying, searing, crushing, milling and precise heating  One Million Menus cookbook

RRP: $1699 Steam Basket – RRP: $199 Vegetable Shredder – RRP: $149

Made in France, this all-in one kitchen machine is an investment for a lifetime. It can replace up to 10 appliances and now comes with two new companions – a steam basket and shredder accessory.

Groupe SEB: 1300 307 824

PRODUCT GALLERY

Kenwood Chef Sense Mixer KVC50

Sunbeam London Collection Conventional Kettle KE2110     

1.7L capacity 360 degree base Rear water gauge Matte ﬁnish Four colour variants

 Five bowl tools – K-beater/whisk/dough hook/ creaming beater/folding tool  Durable glass bowl  Two power outlets – high speed and new slow speed  Total mix planetary-action gives optimal results even on small quantities

RRP: $799

De’Longhi: 1800 126 659

RRP: $129

Sunbeam: 1300 881 861 British design comes to the fore with these stylish new kettles that come with matching two and four-slice toasters that add a distinctive edge to the modern kitchen benchtop.

There are over 20 optional attachments to cover all aspects of cooking and baking while the load sensing technology in the machine adapts to what is in the bowl.

www.applianceretailer.com.au

AR MOTHER’S DAY

Jeff Karklins.

David Dunstan.

FROM THE FLOOR

The move from traditional to personal gift giving Balaklava Electronics, South Australia store manager, Jeff Karklins Balaklava Electronics located 92km north of Adelaide, South Australia in Balaklava (population 1827) primarily sells to middle-aged to older consumers. Store manager, Jeff Karklins said Mother’s Day gifts have seen a shift from more traditional items, such as irons, to more personal items, including coffee machines and personal grooming products, such as haircare.

“Although manual coffee machines sell well, the Nespresso pod machines are without a doubt our best sellers due to their convenience and ease of use. Karklins also said a number of consumers, , particularly in the older age group, prepare their loved one for winter and opt for heated throw rugs. When asked about factors that inﬂuence the purchase decision,

he noted that his customers do not necessarily buy on price. “Consumers want to ensure they are buying a quality product and therefore are more interested in brand heritage and what features are being offered. “Supplier promotions do assist in encouraging a consumer to purchase a product. Cashbacks or gift with purchase, are highly desirable,” Karklins said. ◆

Dunstan’s Electrical Clare, South Australia proprietor, David Dunstan Located in the Clare Valley, the oldest wine growing region in South Australia, sales of small domestic appliances ‘across the board’ have been solid, proprietor David Dunstan said. “There is always the replacement market that keeps sales moving steadily along with renovators wanting to buy new appliances to go with their new decor. Renovation programs on TV stimulate a few people to jazz up their new kitchens.” 54

Appliance Retailer March 2016

New products that stand out for Mother’s Day include those from Sunbeam, Breville and Tefal. “These companies have been around for a long time and have a good range of appliances with some colour variants to brighten up the kitchen. “We operate in the middle segment but don’t play in the entry level. With six mass merchandisers in town we stay out of that market. We are not into $19.95 kettles. However, I think some of the

well-known brands are under a bit of pressure from non-branded product.” As for the premium sector, he said, while there is a customer base out there prepared to spend more, this market segment does not ﬂuctuate a great deal “but I would say sales are steady”. Promotion activity does not have a big impact on SDA sales either. “We fi nd the most effective promotions are those attached to seasonal categories, such as air conditioning,” Dunstan concluded. ◆

PROMOTIONS

Sweeten the sale There are plenty of opportunities for retailers to take advantage of promotion offers from suppliers, including cashbacks and gift with purchase, for this key selling period.

SMEG

DELONGHI

GROUPE SEB

SUNBEAM

KENWOOD

GOLDAIR

KITCHENAID

MORPHY RICHARDS

above-the-line promotion activity in the ﬁrst-half of 2016 will run across TV, print and digital. In the lead-up to Mother’s Day there will be a GWP promotion – buy a Cuisine Companion and receive a new Shredder accessory as a bonus.

is releasing a range of limited edition colours for the NutriBullet 900W Pro, its top selling and Choice magazine recommended liquidiser.

is running a Mother’s Day promotion for its Stand Mixer with a $100 cashback. The promotion starts on April 1 and continues until Mother’s Day. There will be on-going activity for small appliances throughout the year with details still to be conﬁrmed.

is readying for Mother’s Day with bonus EFTPOS gift card promotion from midMarch until May. Consumers will have the choice of $20, $50 and $100 gift card amounts depending on the eligible Sunbeam product purchased.

will give a bonus Spriralizer attachment to help mothers get more creative. Valued at $199 it is available with the purchase of any KitchenAid Stand Mixer.

is blitzing the market in the lead up to Mother’s Day with cashback offers on all Multifry models as well as a 90-day money back guarantee and in-store demonstrations. Additional support will come from a TV campaign at key peak viewing times.

has a GWP promotion on its Chef Sense range offering a bonus kitchen machine Food Processor attachment, valued at $169, with the purchase of a Chef Sense mixer. The attachment makes light work of slicing, grating and chopping.

is planning to run giveaways and competitions across various social media platforms to support the Mother’s Day selling period. www.applianceretailer.com.au

AR NEW APPLIANCES

Panasonic wet/dry shaver (ES-LV9N)

Beurer FC72 ionic facial sauna

anasonic’s latest shaver provides a close but gentle shave that is fast and effective. The 3D multiﬂexible pivot head ensures even pressure while the smooth rollers enable rotation to glide over skin. A shaving sensor detects beard density and controls shaving power.

his facial sauna delivers a high functioning design to alleviate skin from environmental stresses. It boosts hydration and stimulates blood circulation and comes with an adjustable nozzle that manages the steam ﬂow for more comfort and targeted results.

RRP: $599.95

RRP: $119.95

Panasonic: 132 600

Beurer: (02) 9451 0333

Miele CVA 6800 built-in coffee machine

ith the convenient OneTouch function, the machine delivers fully automatic coffee perfection at the touch of a button. It also features Miele’s exclusive CupSensor which automatically adjusts the position of the central spout.

RRP: $5,899

Miele: 1300 464 353

NEW APPLIANCES De Dietrich oven (DOP1180X)

rguably one of the world’s most intelligent ovens, featuring 50 preprogrammed recipe cooking guides and a genius system that allows the oven to clean itself. It also boasts 12 expert modes including a turbo grill.

RRP: $4,499

De Dietrich: 1300 694 583

Conair BaByliss Paris connected epilator (G940A)

he ﬁrst intelligently connected IPL hair removal system that synchronises with a smartphone or tablet via Bluetooth. The App ensures safe and correct use through a safety questionnaire, personalises individual treatments and journals every treatment.

RRP: $750

Conair: 1800 650 263

Appliance Retailer March 2016

RETAIL RULES AR

RETAIL GROWTH Objectives Part 2 – Frequency

Norrelle Goldring from GfK explains how increasing shopper frequency drives profits

ast time we looked at the Traffic retail objective. This time we’re looking at Frequency, sometimes known as Inter purchase Interval (IPI).

WHAT IS FREQUENCY?

Frequency can operate at both store and category level. It is the number of times a shopper shops your store or a given category over a defined period of time, which will change per channel. Let’s say that shoppers shop across your channel between 1 and 2 times a week, but your store may only see one of those trips. This means your store’s average frequency of visit across shoppers might be once a week, or less often. This can be derived from looking at your customer transaction data, where it is linked to transactions by the same individual, such as via EFTPOS, credit card and/or loyalty card data or for some categories, home panel ‘scan’ data for category purchase frequency. In order to drive store growth and category growth, the goal is to increase frequency. This relates to driving Traffic via repeat visits. IPI is the inverse of frequency. It is the time between shopping trips to buy the category or product. For example a category with an average purchase frequency of 10 times per year has an IPI of 5.2 weeks. It changes according

to category and channel segment. Big box stores may have a longer IPI (time between trips) than do local smaller stores, because shoppers may be more likely to ‘stock up’ at big box stores. Once you know what your store and category frequency and IPI measures are, you can set a goal. The goal might be something like an average increase in store visit frequency by your shoppers of an additional trip per shopper per month. For example, if you currently have a store visit frequency of once a month, you might have a goal of increasing that to once a fortnight.

FREQUENCY AND IPI DIRECTLY IMPACT SALES VOLUME

Frequency and IPI are important to retailers as they directly impact on volume of sales for that category and have a direct correlation to foot traffic. From a brand perspective, frequency of purchase reinforces the brand loyalty relationship. Frequency is a means of increasing brand loyalty and commitment (movement up the ‘commitment scale’) and a key lever in increasing sales from an existing consumer base.

NORRELLE GOLDRING & GfK

Norrelle Goldring is Head of Shopper Insight & Retail Strategy at global consumer research and retail datahouse GfK. She has 20 years’ experience in retail and liquor across manufacturer, retailer and agency roles with companies ranging from Diageo to Coca-Cola to Vodafone Stores. Norrelle helps improve shopping experiences by understanding how and why people buy things. At last count she had visited more than 700 of Australia’s cellar doors and over 100 US brewpubs and bourbon distilleries. Call Norrelle on 0437 335 686 or email norrelle.goldring@gfk.com.

Typically, the more frequently a shopper buys a category, the more involved in that category they are. It follows that the more frequently a shopper deals with a retailer, the more loyal they become (all other things such as low out-of-stock levels and good customer service being equal). Shopper frequency and IPI in a given category depend on the nature of the category, the number and type of occasions the product is used for, what kind of shopper they are, and from what household type and size. Categories may be expandable or non-expandable and this has an impact on frequency. Home appliances, however are non-expandable.

HOW TO INCREASE FREQUENCY

1. I ncrease and communicate the number of consumption occasions »» What consumption occasions can be grown? What are new consumption occasions that have yet to be associated with the category? 2. Review pack size and format portfolio »» Identify the pack sizes and formats per category that are frequency related, profit related, or AWOP driven. Be clear on the target for each type of product and pack. Different products will suit different consumer and shopper types. 3. R un frequency driven promotions at a store level »» Victoria’s Secret do it with ‘secret dollar rewards’ cards that are redeemable only within 30 days (and you don’t know the value of the secret reward on the card until you place the order, which also increases spend levels). Understanding the nature of the category (is it expandable or nonexpandable consumption?), category shopper types, their consumption occasions and shopping missions and how to expand them, lies at the heart of driving category growth through Frequency and IPI. Achieving this is a win-win for both retailer and manufacturer. AR www.applianceretailer.com.au

AR NEW GADGETS

Samsung R5 Speaker Delivering high-quality and balanced sound through a circular design, the speaker features a tap-and-swipe user interface and integration with the latest Samsung Multiroom mobile app. Ring Radiator technology allows sound to be transmitted in all directions.

RRP: $649 Samsung:1300 362 603

Changhong FreeviewPlus TV Cast videos, music and photos to the TV screen with your mobile as the remote control. The 49-inch TV uses exclusive Ultra Clear video processor engine and energy saving technology for improved power efďŹ ciency.

RRP: $999 Changhong: 1300 796 688

Garmin vivosmart HR This touchscreen activity tracker uses Elevate wrist heart rate technology to provide a full suite of smart notiďŹ cations. It can receive text, calls, email, calendar and social media alerts when paired to a compatible smartphone.

RRP: $229 Garmin: 1800 235 822

Brother PocketJet7 Series An A4 portable thermal printing solution compatible with smartphones, tablets and PCs across iOS, Android and Windows operating systems. It supports Apple AirPrint wireless technology for users to seamlessly print from their devices.

RRP: From $599 Brother: 02 9887 4344

Motorola Pet Monitor View your home remotely via a smartphone, tablet or desktop PC, with this Wi-Fi enabled pan and tilt camera. It sports zoom functions up to a wide 200 degree angle and infrared night vision.

RRP: From $99.95 Motorola: 1300 366 895

Appliance Retailer March 2016

COMPANY INDEX AR COMPANY

PAGE #

Aldi ..................................................................................................................... 6 Appliances Online ...........................................................................................24 Ariete................................................................................................................50 Bissell .................................................................................................. 32, 36, 38 Breville ....................................................................... 11, 15, 24, 27, 44, 50, 52 Bosch .......................................................................................31, 34, 35, 38, 40 Brother .............................................................................................................58 Cellnet ..............................................................................................................11 Changhong ......................................................................................................58 Citigroup ..........................................................................................................11 Cleanstar .............................................................................. 32, 36, 38, 40, OBC Conair ...............................................................................................................56 De’Longhi............................OFC, 11, 15, 16, 18, 20, 21, 24, 26, 28, 43, 48, 55 De Dietrich .......................................................................................................56 Dick Smith....................................................................................................5, 11 Dunstan’s Electrical..........................................................................................54 Dyson ................................................................................29, 30, 31, 33, 34, 37 Electrolux ....................................................... 7, 8, 9, 10, 11, 32, 36, 40, 44, 50 Eurolinx ............................................................................................................27 Euromonitor........................................................................................ 14, 30, 42 Fitzone..............................................................................................................56 Garmin .............................................................................................................58 General Electric .................................................................................................. 8 GfK....................................................................................................... 15, 42, 57 Godfreys ...........................................................................................................40 Goldair ................................................................................................ 44, 50, 55 Groupe Seb ................................................................................... 43, 47, 49, 55 Harvey Norman.................................................................................................. 7 Haier................................................................................................................... 8 Ilve....................................................................................................................18 Jura ............................................................................ 14, 16, 20, 22, 23, 27, 28 Kenwood ....................................................................................... 43, 48, 53, 55 KitchenAid .......................................................................................... 15, 20, 55 Kleenmaid .......................................................................................................26 Leading Appliances .........................................................................................54 LG .................................................................................................... 7, 31, 34, 37 Masters .............................................................................................................. 6 Miele .................................................................................18, 22, 28, 32, 36, 56 Motorola ..........................................................................................................58 Moprhy Richards .......................................................................... 44, 48, 52, 55 Myer ................................................................................................................... 8 Nespresso ...................................................... 13, 15, 16, 17, 19, 20, 24, 26, 28 Panasonic .........................................................................................................56 Pro Appliances ...........................................................................................44, 50 Retravision .................................................................................................24, 39 Samsung ....................................................................................... 31, 32, 36, 58 Sebo .................................................................................................... 32, 36, 37 Shriro................................................................................................................11 Smeg .......................................................................... 41, 42, 43, 45, 46, 52, 55 Sunbeam.................................................... 7, 15, 18, 22, 24, 26, 43, 48, 53, 55 TATA ..................................................................................................................25 Tefal ............................................................................................................46, 53 The Good Guys .................................................................................................39 V-Zug ................................................................................................... 15, 18, 22 Westinghouse..................................................................................................50 Whitfords ........................................................................................................... 7

READERSHIP GROUPS

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