Consumer purchasing behaviors within the major appliances market shifted significantly over the last two years, with changes largely attributed to the pandemic. Consumer surveys indicate growth is expected to continue with online purchases of white goods and is forecasted to increase to 40% of total industry sales by 2025, up from 15%-20% today. Some of these changes significantly impact the way consumers buy their major appliances and simply can’t be ignored by retailers if they want to remain competitive in the market.

This article will examine the consumer behavior shifts the pandemic has created, as well as exploring which major appliance market trends are here to stay, and which will likely revert to pre-pandemic patterns.

Finally, we’ll explore how today’s consumers are looking for and comparing products and brands online more diligently than ever, despite whether they purchase online or offline.

General Trends in Major Appliance Sales – Different Regions, Different Reasons.

Global consumer behavior has been shifting toward greater reliance on online purchases. The underlying factors pushing these patterns, however, differ according to geographic circumstances. North America has shown high product penetration, with sales dominated by product replacement.

The European market, in contrast, has grown due to low-interest rates and a strong economic position. The stronger economy has increased demand for premium built-in or integrated appliances.

The Asia Pacific region is experiencing growth in income levels, specifically the middle-class, with easy access to goods and finance. While the pandemic forced a change in work-life balance, it did not curtail general income levels and therefore demand for major appliances remained strong.

Pandemic Pick Up: High Demand in Times of Crisis

Quite unexpectedly, global sales of large appliances increased 31% in the first half of 2021, compared to the same period the year before. Demand exceeded pre-pandemic levels – with a 20% increase over the same period. Demand in India rose 51%, China 38%, and Western Europe 32%. The home appliance market in Europe grew 152% since 2019. Given these figures, what can this uptick in demand be attributed to?

Greater usage, more replacements…

Demand for major appliances grew due to the increased usage and need for them as people were forced to stay home. Demand for freezers rose, for example, when people stocked up on essentials to feel a greater sense of security. Dishwashers and washing machines were strained to the maximum as people started working and schooling from home. Shared facilities such as laundromats were closed due to lockdowns and restrictions, making replacements for broken appliances more urgent. Appliances experienced more wear and tear. A combination of these factors seemed to shape consumer buying behavior so that even though the pandemic spanned more than two years, American demand for replacing large appliances has not fallen.

Staying home meant improving homes…

With people required to remain in lockdown for months on end, consumers began to focus on their homes and the space they have to live in, work in, etc. The ability to work remotely, learn remotely, and simply spend more time in their homes led people to look for more spacious properties or to upgrade to better appliances via home improvement.

The pandemic triggered a notable rise in residential construction and renovation, including home improvements and investment in home comforts. The trend towards remodeling activity meant that while the US economy shrank by 3.5% in 2020, spending on home improvements and repairs grew more than 3%, to nearly $420 billion.

This interest in feathering our nest was coupled with a rise in disposable income for many. The disposable income of Americans rose by 67%, compounded annually, during the first quarter of 2021—the largest such jump ever recorded. The impact of stimulus checks had an additional impact on white goods sales in the US. Market trends shifted to reflect not only a higher demand for major appliances but also an increased interest in luxury appliances at the higher end of the market.

A Shift Online: Ongoing Growth in Online Sales

Online sales were steadily growing in the years before the pandemic, but this trend has since accelerated rapidly over the last two years. General consumer buying behavior has seen some new patterns, with 75% of US consumers having tried a new shopping behavior in response to changing priorities due to economic strains and the closure of stores.

Studies also show consumers will continue to prefer purchasing online after the pandemic. One-quarter of all consumers are now more willing to buy appliances online than before Covid-19. Online sales grew 10% annually between 2014 and 2019, compared with almost no growth at retail outlets. Furthermore, advantages such as home delivery, lower prices, and better deals will continue to fuel online purchasing popularity.

Large, trusted marketplaces such as Amazon have a long-standing advantage in this area. With their personalized service perfected, the growth in online electronic product sales means a large shift in market share towards these big players. With Amazon identifying sales of large appliances as its most lucrative category, omnichannel retailers will need to raise their game if they’re to successfully compete. Better customer digital experience management strategies can propel omnichannel retailers into a more competitive position.

Brand Loyalty: All Change?

With changed consumer situations, shifts in priorities plus more purchasing online, brand loyalty has dipped. The long-term effects of this after the pandemic cannot be underestimated.

Whereas brand loyalty was previously strong when buying or renewing appliances, the combination of increased demand and a negatively impacted supply chain has pushed consumers to value availability, convenience, and value over brand. While demand during the pandemic rose, supply and production chains worldwide proved insufficient to adequately fill that demand on time.

This lack of availability or long waiting/order times caused a vital change in consumer behavior. Retailers, therefore, find consumers jumping more easily between brands when considering a purchase. During the pandemic, 36% of surveyed consumers said they tried a new brand and of these, 73% intend to keep trying new brands.

An important factor has now become the retailer’s brand itself. Consumers remain loyal to traditional retailers – with their online stores seeing the most traction. If retailers focus on increasing customer satisfaction and experience through their online stores, they can keep customers returning to them for future purchases with more dependability.

Great Expectations for Evolving Tech

Constant leaps have been seen in the global technological development of electrical appliances, especially in the major appliance markets. New advancements and smart technology have been constantly changing the market. During the pandemic, this trend was even more prevalent, with a growing demand for smart devices which connect to homes, are more efficient, and give greater control options, such as voice command, through smart devices. Revenue in the Smart Appliances segment is projected to reach US$48,137m in 2022. Revenue is expected to show an annual growth rate (CAGR 2022-2026) of 14.09%, resulting in a projected market volume of US $81,547m by 2026. Consumers usually take a gradual approach to trying more advanced appliances. Those who do own some are more likely to invest in the higher-priced appliances and jump into the smart electronics market more quickly.

Demand for smart appliances is especially led by Millennials, although interest in the perception of smart homes is mostly positive among several generations, with research suggesting that 69.2% of Baby Boomers feel positively toward smart home tech, compared to 79.5% of Generation Zers and 75.4% of Gen Xers. The Millenial segment in particular is more open to new investments as they enter the housing market by finally purchasing their own home, reaching this long-awaited milestone after great efforts in saving for a home.

Now, when looking to purchase, consumers look for better performance or capacity, such as high capacity side-by-side or four-door refrigerators, and high-quality products. Expectations for better hygiene standards of products also rose, no doubt impacted by the pandemic. In 2021, washing machines with steam function, for example, sold almost double the amount of the previous year. Since online shopping allows for more research and analysis of hygiene potential and capacity comparisons, consumer attention to these details has also grown.

What’s on the Horizon?

Thankfully, the pandemic aftershocks seem to be calming, and consumer patterns changing again. That being said, the growth in online shopping is certainly here to stay. Convenience coupled with the fact that conducting online research ahead of visiting a physical showroom will mean retailers must double down on investment in their online platforms. Online sales of appliances grew at a 10.5% annual pace between 2015 and 2019 compared with less than 1% growth at retail outlets, illustrating that even before the pandemic consumers were beginning to lean more towards online purchases.

A recent 2021 survey showed that over 70% of consumers have no concerns about returning to shopping in stores. In-store sales could return to healthy levels once pandemic fears die down. However, retailers will still need to work hard to attract consumers to their in-store experiences and ensure they feel safe and valued.

While the majority of consumers will continue to buy in-store, an increasing number will buy online. This is where growth (and by extension, opportunity) lies – especially as younger, tech-native generations begin to enter the market.  With more than 60% of consumers saying that manufacturers’ websites are a key online source of information for them, consumer experience starts way before they step foot into the actual store. Having a strong digital platform is therefore imperative for retailers to create and maintain good relationships with their customers.

As more purchases are made online, retail stores may see their market share eroded and the white goods industry is likely to consolidate. Retailers should be doubling down on their omnichannel strategies – ensuring consistent and personalized customer experiences that win business and loyalty. Additionally, it will be better for retailers to wean off a reliance on in-store showroom experiences and consider the ongoing improvement of the digital showroom strategy. Retailers should be asking themselves what first impressions are being made in-store and online, and how these experiences can be consolidated. These factors will be of central importance for the future of retail success within the white goods industry.