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Home arrow Market Research Findings arrow Electronics and Electrical Goods arrow Premium electrical appliances boom in the USA
Premium electrical appliances boom in the USA PDF Print E-mail
Written by Euromonitor International   
25 Sep 2006

Premium electrical appliances boom in the USA, by Euromonitor International

American consumers are increasingly investing in high quality kitchen and laundry appliances, according to the latest research from Euromonitor International. The report “Domestic Electrical Appliances in the US” shows that the popularity of premium products is soaring, as Americans are investing an increasing percentage of their income in their homes. Sales of high quality products such as built-in appliances, stainless steel finishes and high-efficiency front-loading dishwashers have increased significantly over the past 2 years; with the average household spend on large electrical appliances rising from $210 to $230, according to Euromonitor International.

Large kitchen appliances benefit as the kitchen becomes the focal point of the home
With rising levels of disposable income, many American consumers – particularly the baby boomer generation - are now willing and able, to pay more for attractive finishes and advanced appliances. In particular, large kitchen appliances are proving to be very popular as the kitchen is increasingly becoming the focal point of many homes. Even among less affluent consumers, purchasing large kitchen appliances is now a popular method of home improvement. Euromonitor International's research shows, for example, that many consumers pay less for products such as dishwashers, in order to purchase more advanced fridge-freezers.

Competition intensifies for premium products
Every major large appliance brand has invested heavily in high end products, offering US consumers a large range from which to choose. Brand names such as Kenmore's Elite, GE's Profile and Monogram, and Maytag's Jenn-Air are all well-known to many consumers. Euromonitor International has also identified other manufacturers who are aggressively pursuing a share of the premium product market. Chinese manufacturer Haier, known primarily for low-priced freezers, fridges and air conditioners, has expanded into higher quality large appliances, including a line of front-loading washers. International players LG, Samsung and Bosch are also dramatically expanding their efforts in the US, all focusing on the premium end of the market.

Small appliances remain largely a commodity sector
Unlike large appliances, small appliances, particularly those for the kitchen, remain largely a commodity sector according to Euromonitor International. The majority of small electrical appliances retail at under US$30 as retailers, such as Wal-Mart and Target, exert strong pressure on prices. Most American consumers also continue to seek the lowest prices available. There are, however, a small number of manufacturers who are offering more expensive, “professional quality”, small appliances in response to the growing need for attractive, premium products. These are proving to be most successful when sold through channels such as department stores, where they retail at 10-15 times the price as their non-branded counter-parts. The small appliance market continues to be characterised by a large number of new products and product innovation. Novelty products such as pod coffee makers and chocolate fountains are helping to boost sales as consumers look to add flair to their social gatherings.

What does the future hold for the US appliances market?
Although interest rates are predicted to rise, consumers are still expected to invest sizeable sums of money into their homes over the next five years. Government policies, such as subsidised loans and tax-deductions for home-owners, will also encourage high rates of home-ownership and investment. Euromonitor International's “Domestic Electrical Appliances in the US” report predicts that competition within the large electrical appliance market will intensify even further. Despite the willingness of consumers to pay more for higher quality products, this fierce competition is likely to drive prices and margins downward, as companies will inevitably seek to increase their market share through discount prices.

For further detail about this article and other related findings, please visit  Euromonitor International by clicking here.


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