The Electrolux Group’s efforts in innovation have a distinct focus on the consumer’s experience. The aim is to create best-in-class experience for consumers.
All product development at Electrolux aims to give consumers the best possible experience and results when using Electrolux products. A key factor is the transfer of know-how from the Group’s professional business operations to consumer products. Over a number of years, the Group has progressively increased investment in R&D.
Electrolux gains knowledge of consumer behavior by performing an extensive number of interviews and home visits to obtain information on the use of various household appliances and the needs that exist. In order for a new product to be launched, at least 70% of the consumers in a test group must have expressed a preference for the product over similar alternatives in the market.
Key areas of innovation to strengthen the brand
Product development has been divided into three main areas to offer best-in-class consumer experiences: great tasting food, care for clothes and healthy well-being in the home.
GREAT TASTING FOOD Electrolux products help consumers to achieve a culinary experience, and cook healthy and nutritious food for family and friends. Some examples include the Electrolux Combi steam ovens and the blast chiller that brings the cook-and-chill technique of professionals to consumers. A continuous dialog with professional chefs and the development of new solutions for restaurants and hotels across the globe have provided valuable insight that has been conveyed to other parts of the Group. Collaboration with professional users includes a partnership with the World Association of Chefs’ Societies (Worldchefs).
All product development in the Group is based on in-depth consumer insight.
We are looking for new ideas
that inspire people around the world to enjoy tastier,
healthier, and more sustainable home cooking in the future.
CARE FOR YOUR CLOTHES Electrolux helps consumers to take care of their clothes so they feel new and clean for longer. A common problem is avoiding using the washing machine or tumble dryer for certain garments, however, Electrolux has solutions to make it possible to use its products without having to worry about the outcome. In the textiles area, the Group also benefits from the experience of professional users when new products are being developed for consumers, such as dryers with heat-pump technology and the semi-professional Electrolux myPRO washing machine for smaller companies, see page 22.
HEALTHY WELL-BEING Consumers also want to create a clean and healthy indoor environment free from dust, allergens and pollution. Electrolux has solutions for this, including vacuum cleaners, air-conditioning devices and water cleaners. One example of innovative solutions in this area is the Frigidaire Cool Connect in North America, the Group’s first connected air conditioner.
Products for different regions
Consumer needs and preferences vary considerably between different parts of the world. Electrolux global projects account for an increasing share of product development and the Group’s global modular platforms facilitate the spread of successful launches from one market to another, with adaptations to local preferences. Such adaptations are crucial to giving the best possible experience to consumers around the world. The platforms also support the company's objective of offering more resource-efficient products to more consumers worldwide. The modularization program continued to be successful during 2016.
Electrolux has about 15 development centers for household appliances throughout the world, focusing on different products and technologies. These development centers are currently located in Sweden, Italy, Germany, the US, Brazil, Egypt and China.
Close consumer dialog to strengthen the brand
Electrolux develops solutions to engage with consumers throughout the purchase and usage process. The aim is to establish an intimate dialog with consumers and strengthen the overall owner experience of the Electrolux offering. The Group’s “360º Consumer Experience” process focuses on consumers and on creating the best consumer experience of Electrolux at different stages, from exploring various alternatives, visiting websites and choosing products at retailers to installing and using the products. Throughout the design and launch process Electrolux has engaged with consumers, kitchen manufacturers and retailers with the aim to create the best Brand Experience.
A new product-range and visual identity were introduced under the AEG brand at the IFA trade show in Berlin in September 2016. One example of an innovative marketing activity during the year was Tasteology for the AEG brand. Tasteology is an on-line documentary. Through five episodes consumers can be inspired to Take Taste Further.
Consumer decisions regarding the purchase of household appliances are increasingly based on visits to websites, blogs and the use of social media. This means that the Group’s websites are some of the most important tools for informing customers. Online sales are expected to increase considerably in line with increased Internet usage. This trend will affect how appliance companies meet their customers’ new purchasing patterns in the various markets.
New technology opens possibilities for new solutions. During 2016, approximately 6 million connected appliances are estimated to have been sold world-wide. It has been predicted that the annual sales figure for 2020 will be around 120 million. Besides simplifying and improving the usage of products, the connection will strengthen communication with the consumer after the purchase and could provide options to upgrade the software. Connected appliances are therefore a significant area for continued innovation efforts at Electrolux.
During 2016, the Group launched a new series of washing machines under the AEG brand, where the consumer can get advice, through an app, on which programs and washing powder should be used on different types of clothes and stains. The program can then be sent directly to the connected washing machine.
The Group continues to develop and launch connected products in all major product areas. Electrolux has joined the Open Connectivity Foundation (OCF), a broad collaboration project to continue to drive towards unified standards for developing open source code for connected products. Electrolux has also joined Google’s Early Access Program for the Brillo operating system and the Weave communication protocol for the “Internet of Things”, with the aim of developing connected household appliances for smart homes.
Further increases in product quality
Quality is an important prerequisite for the consumer to choose an Electrolux product above competitors. The Group has ambitious long-term goals to continue to improve quality and drives global quality efforts at Electrolux Quality Management System, whose focus lies on consumers’ experience of Electrolux quality.
Investments in service and aftermarket
Electrolux offers efficient service, rapid upgrades and a broad range of accessories and consumables. Well-functioning service activities have the advantage of increasing customer satisfaction and presenting opportunities for profitable aftermarket sales. The objective is to increase the share of a product’s sales value that comprises service, consumables and sales of accessories.
The most significant environmental impact for the Group is energy and water consumption during the usage of products. Accordingly, Electrolux places great importance on increased product efficiency, and sustainability is one of four prioritized areas in product development. At least one-third of the product development spend is environment-related and includes energy and water efficiency. Material efficiency is growing in importance. Electrolux has successfully introduced recycled material in vacuum cleaners and other appliances.
A key approach to meeting increasing demand for energy and cost-efficient household appliances from a growing middle class in growth markets is to implement modularization and global product platforms, which enable a rapid spread of innovations to new markets.
The accelerated digitization creates new opportunities to give consumers a better experience from their products through Smart Connected Appliances.