Retail Observer

RETAILOBSERVER.COM OCTOBER 2015 54 T here is no denying that the smart home trend is upon us, and it's a category that is growing exponentially. Reportsnreports.com just published its Global Smart Homes Industry Report 2015, which forecasts smart home market growth at 17% CAGR to 2020. The smart home market and the appliance market have several things in common. For one, a key driver is increasing consumer awareness about green technologies and energy efficiency. "With the increasing awareness about energy efficiency and the optimum utilization of the same, a majority of homeowners are driven towards the smart home concept that not only offers better energy management but also provides security, convenience, and comfort," the reports says. The ability to monitor and control energy usage remotely, for example, with devices like the Nest thermostat or LED light bulbs allows consumers to turn lights on and off while on vacation from their smart home, or turn off the air-conditioning system should they decide to go out shopping after breakfast. This real-time control at home or away from home cuts down on energy consumption. Similarly, the drive for new appliances is also partially fueled by the desire for more energy efficient and convenient home appliances. Over the past few decades, advances in appliances and electronics from microwaves to dishwashers to refrigerators have changed the way we use energy in our homes. Through the Energy Department's appliance standards, manufacturers are making great strides in developing new, more efficient appliances that are saving consumers money on their energy bills. But with new energy efficient appliances, some customers are left confused and even angry. "Customers aren't used to energy efficient appliances and expect the new machines to work just like the old ones," says Matt Hillebrand of Don's Appliances in the Greater Pittsburgh area. That means whereas the refrigerator of yesteryear, while incredibly energy-inefficient might last 50 years; the modern- day version last only seven to 10 years. "That's why it's very important to educate the customer. We are constantly preaching to clientele about the shorter lifespan of contemporary appliances while pointing out the undeniable fact that they are saving year after year on energy costs." According to Hillebrand, customers don't realize that while those appliances of yesteryear consume massive amounts of energy and waste water, an energy-efficient dishwasher can save the homeowner $150 or more a year. Even younger first-time appliance shoppers need to be educated. While they are a slightly different consumer and are looking for more technology and convenience features in addition to energy efficiency, they still have the expectation that a refrigerator or dishwasher should last forever. "If a TV fails, the consumer will shrug and buy a new one. If a refrigerator fails, customers think they got a raw deal. Managing customer expectations and educating them on current products is therefore crucial to success," adds Hillebrand. As appliance retailers, therefore, to create a happy customer is to create an educated customer. By informing the potential customers of the actual lifespan of the product by educating them on the benefits that offset that shorter lifespan, the customer will 'get it'. Then, when it's time for that refrigerator to be replaced with a new one, they'll know who to come to in order to purchase a new one. You! John White Appliance Trends John White, Executive Vice President—BrandSource THE GREEN APPLIANCE CONUNDRUM: Energy-eficiency is a double-edged sword in the world of appliance sale RO

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