Consumers willing to pay more for energy-efficient electronics

Research reveals a greater appreciation and reliance on technology fostered by the Covid-19 pandemic

A new survey published by IFA organiser gfu found that consumers are willing to spend up to 50% – or €150 more – on sustainable white and brown goods if it saves them money and energy in the long term.

KEY FIGURES

  • 47% Consumers willing to spend 47% more for energy-efficient washing machine
  • 5% more washer dryers sold in Germany between January and May 2022
  • 25% Consumers accept a 25% surcharge for devices with guaranteed repair services
  • 50% of smartphone shoppers consider pre-owned devices

Between January and May 2022, 100,000 washer dryers were sold in Germany which marks a 5% increase compared to the same period last year. In the same period, the sales volume increased by 7% to over €72m.

The research surveyed 2,500 consumers from Germany, France, US, China, India and Russia and found a greater appreciation for technology. However, consumers are also expecting more from their devices, including greater energy savings and better functionality.

Customers are willing to spend an average of 36% more for an energy efficiency class that is two levels higher than an otherwise identical device. They would even pay up to €160, or 47%, more for a more energy-efficient washing machine compared to an average base price of €340.

For a device where the manufacturer guarantees that it can be repaired and that the necessary spare parts are available, consumers accept a surcharge of 25%, gfu found.

“Consumers are willing to spend most if they see financial savings because of lower energy costs – for example, €200 more for a washing machine or refrigerator in particular if they receive a device with energy efficiency class C instead of E,” explains Dr Martin Schulte, partner and consumer goods expert at Oliver Wyman.

In view of increasing energy costs, the advantage for economical technology is growing, according to gfu.

“Increasing energy prices ensure that additional expenditure for more energy-efficient household appliances and consumer electronics pays for itself much more quickly,” Dr Schulte explains.

Energy-intensive devices in focus

The additional willingness to pay is particularly high for energy-intensive appliances – above all for washing machines and refrigerators. In the case of vacuum cleaners, consumers show more willingness when the product comes with the possibility of repairs, the survey found.

Dr Sara Warneke, MD, gfu, comments: “More and more consumers are expecting consumer electronics and household appliances to last longer. Manufacturers have an advantage if they offer repair services and make spare parts available in the long term.

“More and more consumers are expecting consumer electronics and household appliances to last longer. Manufacturers have an advantage if they offer repair services and make spare parts available in the long term.”

The survey also found that consumers do not really have an understanding of how much money they can save by switching to a higher energy efficiency class. They estimated between €11 and €25 for a class C refrigerator over an E class model, whereas the saving is in fact €32 per year.

“Many people are apparently not aware of the extent to which energy-efficient devices can relieve the household budget,” says Dr Warneke. “For the sustainability pioneers among the manufacturers, this is a good starting point for addressing consumers.”

The most receptive target group turned out to be people aged over 35 with a monthly net income of more than €3,000.

Multifunctional appliances preferred

Multifunctional appliances are sometimes seen as the more sustainable option, partly because the combined functionality can mean they use less energy but also because they require much fewer materials for production. The sector has grown significantly in recent months and encompasses products such as washer dryers and hobs with integrated extraction.

As well as the 7% increased sales volume for washer dryers in Germany, the first half of 2022 saw an even bigger percentage leap for hobs. Offering a more elegant and more practical solution, compared with traditional hob/hood set-ups, 104,000 hobs with integrated extraction were sold in Germany in the first half of 2022 to May, an increase of 45% on the year previous. This generated sales of more than €266m.

Used devices are fashionable

The study asked about attitudes towards the environment and social compatibility and revealed that refurbished devices are becoming increasingly popular. Almost two thirds of participants described their lifestyle as sustainable.

When buying a smartphone, half of those surveyed consider pre-owned devices and almost a third had already purchased them. The findings also show a growing interest in washing machines and coffee machines. “The main motivation for purchasing refurbished devices is that they are cheaper,” says Dr Schulte. “Sustainability considerations play a minor but important role.”

Consumers are looking to the future

“People are increasingly expecting companies to take their social responsibility seriously. Three out of four consumers now consider whether a company is taking an active stance on environmental protection and social justice in their purchasing decisions. Manufacturers ignore this expectation at their peril,” says Dr Schulte. In Germany, these points carry weight for 78% of consumers. Only in India and China are the scores higher, at 89% and 91% respectively.

“These social questions were starting to emerge even before coronavirus and there’s no doubt that they’ve become more important during the pandemic,” adds Dr Warneke.

Consumers have a greater appreciation for technology, but expect much more

According to the global consumer survey, 60% of consumers in Germany appreciate their electronic devices more as essential helpmates in their daily lives than they did pre-pandemic. Dr Schulte says they have “made a quantum leap in their understanding of and openness to technology” but expect more and are also more sensitive towards elements such as data use.

Dr Warneke notes that manufacturers should be able to demonstrate a clear purpose for data collection to overcome consumer scepticism and commercial profit.

“Consumers want their products to offer greater value for money. They want better quality for the price, they want greater, demonstrable functionality, and they want great design,” she concludes.

Leave a Comment

Your email address will not be published.