Added Value to Offset Dutch MDA Volume Pressures?

The Dutch market is one of challenging contradictions; from a European perspective, economic development is better than in most other countries, although the market for Major Domestic Appliances remains weak. The consumer is postponing major purchases, especially when it comes to buying a house. The pressures facing the housing market, following a badly affected 2009, continue in 2010, fuelled by the ongoing debate about mortgage terms in the newly-formed Dutch government. Obviously the Built-In/Built-Under segment has been hit harder than that of Freestanding.

Although MDA is a replacement market, growth can be created by consumers replacing their appliance with new ones based on design; looks and features. Energy efficiency is one of the most obvious universal features to be embraced by the public. Under the present market conditions we must conclude that in 2009 volume has been reset to a new, lower level. To achieve the high levels of turnover enjoyed in 2008, the focus must be on added value features. The successful sales of Heat-Pump Tumble Dryers are a perfect example. In value terms this high-end segment already increased towards 20% of the market in the first half of 2010, which more than compensates for the loss in volume sales.

Within each product group we can easily identify trends towards the better featured products, e.g. the RPM in Washing, noise level and water-consumption in Dishwashing and No Frost in Cooling etc. As seen in the chart below, with volume levels in 2010 below 2009, the average price resulting from product mix and pricing is heavily influenced. The hesitant Dutch consumer has postponed purchases, therefore meaning that they have created savings! An extra effort to sell featured products by both Industry and Retail is the clearly the best way forward for the future. These topics will undoubtedly be discussed in depth during IFA, where added value products will form the basis for turnover development in 2011.