Consumers willing to pay 50% more for electronics if incentivised with energy savings
A new survey published by IFA organiser gfu has found consumers are willing to spend up to 50% – or up to €150 more – on sustainable white and brown goods if they will save them energy, and money, in the long term.
The study, which quizzed 2,500 consumers from Germany, France, the US, China, India and Russia, also found that the Covid-19 pandemic has fostered a greater appreciation for, and reliance upon, technology. However, consumers also expect more from their technology, including greater energy savings and better functionality.
The gfu study found that consumers are willing to spend an average of 36% more for an energy efficiency class that is two levels higher than for 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 the manufacturer’s guarantee that a device can be repaired and that the necessary spare parts are available, consumers accept a surcharge of 25%, gfu said.
“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, gfu said.
“Increasing energy prices ensure that additional expenditure for more energy-efficient household appliances and consumer electronics pays for itself much more quickly,” adds Dr. Schulte.
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, on the other hand, the possibility of repair increases the willingness to pay.
Dr Sara Warneke, managing director of 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.”
However, 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, estimating between €11 and €25 when the saving is in fact €32 per year for a class C refrigerator over an E class model.
“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 over 35 years of age 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 a lot fewer materials are used in production.
Multifunctional appliances which have grown significantly in recent months include washer dryers and hobs with integrated extraction.
Between January and May 2022, 100,000 washer dryers were sold in Germany, an increase of 5% compared to the same period last year. In the same period, the sales volume increased by 7% to over €72m.
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 trendy
The study asked about the general attitude towards questions of environmental and social agreements and social compatibility, and found that refurbished devices are becoming increasingly popular. In addition, almost two thirds of the participants described their lifestyle as sustainable.
When buying a smartphone, half of those surveyed consider pre-owned devices, and almost a third have already purchased them. But interest is also growing 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 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 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. They “have made a quantum leap in their understanding of and openness to technology”, Schulte says, but expect more and are also more sensitive to things like the use of their data.
Warneke notes that manufacturers should be able to demonstrate clear purpose for data collection to overcome consumer skepticism and profit commercially.
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.
For more IFA-related news, click here