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issue: December 2012 ApplianceMagazine.com


Smart Consumers and Smart Appliances


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Quality remains the top reason consumers buy the smart appliances that they buy.

When asked the top two areas manufacturers should prioritize for improvement - across several product categories, including smart appliances - consumers selected product quality in all categories, as reported in a new study from UL (Underwriters Laboratories). The second annual study, The Product Mindset, included a focus on smart appliances.

The study surveyed manufacturers in the United States, China, Germany, and India. Industries included smart appliances, high-tech/consumer electronics, home building materials, processed food, and fresh food.

Consumers' Perception of Smart Appliance Quality Improvement

Consumers, according to the UL survey, don't perceive strong improvement in smart appliance quality during the last five years. When asked if they agreed that product quality is better now than five years ago, the result was just moderate agreement: 2012 rating showed an average rating (on a 10.0-point scale) of 6.7. An average of 8.0 to 10.0 would have indicated strong agreement.

This average, it should be noted, was on par with the ratings of the other industries in the UL study:
* high-tech/consumer electronics: 6.9
* home building materials: 6.5
* processed food: 6.2
* fresh food: 6.3

Quality is still the top reason consumers buy the smart appliances that they buy. In fact, it was the No. 1 reason for buying in all the product categories in the UL survey.

Interestingly, however, quality was a less-dominant factor in smart appliances than in the other categories. Only 21% of consumers said quality was the most important driver of smart appliance purchase decisions - less than 23% for consumer electronics, 24% for food, and 29% for home building materials.

Consumers' Perception of Smart Appliance Safety

Consumers indicated more confidence in smart appliance safety than in the other categories studied in the UL survey. Only 9% of consumers thought safety should be top priority for smart appliance producers. Only 10% of consumers thought safety should be the top priority in high-tech/consumer electronics. Other industries in the study surveyed significantly higher (home building materials, 23%; processed food, 27%; fresh food, 29%).

Specifically, this is how consumers think each of the following issues should be most prioritized:

By manufacturers of smart appliances:
* product performance: 30%
* innovation: 22%
* environmental friendliness: 15%
* product quality: 14%
* design aesthetics: 10%
* product safety: 9%

By manufacturers of high-tech/consumer electronics:
* product performance: 29%
* innovation: 23%
* product quality: 16%
* design aesthetics: 12%
* product safety: 10%
* environmental friendliness: 10%

The study found that the top safety concerns that consumers have regarding their smart appliances are:
* malfunction when sleeping/away - 42%
* interference from other smart appliances - 18%

The top information priority of consumers buying smart appliances was for information about the appliance's product quality and performance. No. 2, according to the UL survey, was information on product reliability. Consumers' No. 3 priority: information on the cost-effectiveness of the product.

No. 1 and No. 2 were the same for high-tech/consumer electronics; consumers No. 3 priority in this category was information on the product innovation.

Almost half of consumers think that smart appliance manufacturers are not prioritizing environmentally friendly manufacturing procedures (45%) or products (42%).

The survey asked both the smart appliance makers and consumers about the importance of the components in smart appliances. The report found that:
* 40% of consumers think it's important that they know what components go into their appliances
* 57% think it's important to know where the different components inside of smart appliances come from.
* 43% think it's important to know where the final product was assembled and packaged.
* 60% of consumers think they know the country of origin of the smart appliances they purchase.

Consumers intend to stay vigilant about the origin of the products they buy. The UL report shows that, Across industries:
* 44% of consumers expect to be more vigilant about where a product is made
* 37% expect to remain at the same level of vigilance
* 19% expect to be less vigilant

Smart Appliance Makers See the Need for Consumer to Know

The survey found that, among all of the product categories studied, "68% of manufacturers report that it is very important to clearly show consumers what ingredients/components are included in their products."

In fact, breaking this figure out by industry, smart appliances was above the overall average - 73% believe that consumers want to know what components go into their smart appliances. (Only Food ranked higher, at 81%.)

The study asked smart appliance producers to choose the one factor - out of 11 choices - that will most impact the company's ability to compete in the coming 2-3 years. Smart appliances makers ranked quality No. 1, at 23%. Reliability was 11% and performance was 8%.

In fact, producers from all the industry segments chose the same three factors and in the same order. Consumer electronics makers chose:
* quality: 29%
* reliability: 6%
* performance: 5%

Supply Chain Satisfaction

The UL study found that American producers in the surveyed product categories were the most-satisfied with their supply chains, with 64% saying they were very satisfied. In China, only 58% said they were very satisfied.

Smart appliance makers were, in general, the most-satisfied industry group in the study.

The UL study found that 76% of manufacturers surveyed - across industry segments, and in all four survey countries - believe global sourcing is a way to improve product quality.

But survey results indicate that this is more true in undeveloped countries than in developed countries. In India, 88% believe global sourcing improves quality; in China, 87%. However, in Germany the result is 71% and in the United States, just 51%.

Regardless, the study found that 46% of manufacturers across the industries in the study will increase how much they go to other countries to source materials or components. For those who are adding international sources, 79% will do so to expand their international supply base rather than to replace existing suppliers.

 

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