by Paul Roggema.
The highlight of day 2 of IFA was clearly the presence of Whirlpool. In the past the company completely ignored IFA; they choose to be at Eurocucina Milan, and the Cologne IMM fair. Last year they changed their mind and occupied a small hall with their German Bauknecht brand. This year the company pulled all the stops and presented all the brands in a hall for themselves. Of course there was an explanation: after the takeover of Italian Indesit the company is market leader in Europe, now before BSH. And the plans for Germany have been redefined: Bauknecht will be joined by Indesit, the first in the core segment and the latter as value-for-money. And, there were so many positive reactions last year (press as well as trade partners) that extra budgets were freed. And the result was smashing; on par with the other big brands. They really offered a spectacular stand with all brands and innovations, and a big-gesture design.
The Indesit takeover started about a year ago and the latest news is that agreements have been reached with Italian unions on labor-related consequences of plant closures. The integration is in full swing. There were very good reasons for the takeover: white goods companies don’t come up for sale every week, Indesit had a prominent position in Italy, the UK and Russia (where Whirlpool was weak), there were a lot of innovations in the pipeline, and Whirlpool wanted to be the biggest. The Merloni family, owners of Indesit, might have been realizing that it was now or never, as Italian white goods makers are squeezed between the Germans, the Turks and the Koreans. It was also an advantage that Whirlpool Europe and Indesit were about the same size. Another advantage is that Indesit has a refrigeration plant in Turkey, from where you have good access to Middle East and African markets.
The first step was to decide on the brand strategy. It is now KitchenAid for premium, Bauknecht, Whirlpool and Hotpoint for the core segment and Indesit for value. Depending on the country, any mix of the three core brands will be used. For instance Hotpoint is mainly used in the UK and Bauknecht is geared towards Germanic markets. Whirlpool will be the innovative brand, where Bauknecht will be quality and reliability. The company uses different platforms to differentiate all their brands. Next is decide on industrial issues as wharehousing and logistics, and merge regional sales operations. Integration of actual production and design processes takes more time of course.
Regional research showed some interesting insights: we know that Germans are the best informed customers. But did we know that Russians and Turks also study the details quite extensively, and that you have to adapt your communication to these aspects?
A range of new features were presented. A step-by-step user interface for hobs, to give the user total control without being confused; a double-compressor refrigerator/freezer, fully no-frost and with a shock freeze function; the B-Live connectivity for Bauknecht, where the washer sends the laundry data to the dryer; automatic washer detergent dosing; a premium 12 kg washer-dryer combination; front loading washers with silent direct drive and a washer-dryer combination for Bauknecht, developed on a Indesit chassis. In dishwashing the PowerClean spray function for vertical placed pans was upgraded, and the PowerDry drying function was improved. And, naturally, apps to control everything from everywhere.
Philips: transforming into a HealthTech company
Royal Philips Electronics from the Netherlands was once a conglomerate with over 400K employees. Many business were sold (white goods, components, chips, computers, telecom equipment) and until recent it had three units: consumer products (audio, video, small appliances), medical equipment and lighting. Now the loss-making audio and video business is also sold and Lighting will be a separate company, which is quite good in upmarket LED products and professional lighting. The small appliances and the (professional) medical business is integrated in HealthTech. This needs an explanation: what do juicers, vacuums and shavers have in common with CT and MRI scanners? There is an answer. HealthTech is the only remaining health care manufacturer which still has a consumer division (main competitors General Electric and Siemens sold their consumer stuff). This will be their unique selling point and for the first time they presented their vision: focus on consumers who need extra care. The care consists of Philips appliances who measure your blood pressure, your weight, you heart rate (using a smart watch), your temperature and maybe your sleeping pattern. Then, upload these data to the Philips cloud. As a third step you consult your own doctor who you can allow to interpret these data. As there are much more measurements, in the quietness of your home, the doctor has a much, much better insight in your health. And we don’t mean health of “healthy” customers but people who are on some kind of health watch by a professional. Philips has the expertise to create the consumer devices, as well as the way to translate the data towards professionals. On the background is the fact that health budgets will never be sufficient to provide for this kind of monitoring; the consumer has to do it himself. As a total, the concept and matching products and services are quite convincing and if the company moves fast enough it could be a very ‘healthy’ source of revenues.
And what about the traditional small appliances? Philips is known for its shavers and ultrasound toothbrushes, both sold with attractive margins. But they had hit products in other categories: the AirFryer fat-free frying pan is a good example. And since a few years coffee specialist Saeco is part of Philips. For shaving there was a new app presented, not just as a me-too product but addressing a serious problem: shaving irritation, which two-thirds of men report. The app asks you to enter your irritation levels, measures shaving time and motor speed and can advise you to lower shaving head speed, shaving time or using lotion or other skin care products. A nice example of an app not in search of an actual reason to exist.
The existing toothbrush app for kids was upgraded: they can earn points and gifts by following brushing instructions.
In the next days, we will report on Samsung and LG, as well on other smaller brands and companies.