Highlights: Water filters – North America
- ~50% increase in water filter sales in 2020, y-o-y
- Almost a 60% improvement in gross profit
- ~4 billion plastic bottles avoided in 2020 by Electrolux water filters
The North America business area has significantly increased its water filter aftermarket sales since 2019 by developing a long-term roadmap, strengthening the brand through consumer insight and raising consumer awareness of the importance of investing in high-quality filters.
A roadmap for expansion in an attractive market
Electrolux aims to double its sales in the high-margin aftermarket segment by 2025 from around 5% in 2018. In 2020, aftermarket sales increased by 13% and accounted for about 7% of Group sales. The North America business area has in 2020 worked actively to drive sales of its IP protected replacement water filters for Frigidaire fridges with water dispensers.
The business area developed a long-term roadmap to expand in the attractive water filter aftermarket and forge closer consumer relations. The first phase of the roadmap was executed during 2019-2020. In 2020, water filter sales increased by ~50%, year-over-year, with almost a 60% improvement in gross profit. In 2021, the subscription model was introduced with double-digit sales growth.
Strengthening the brand through consumer insight
The primary market differentiators from consumer insight formed the basis for the roadmap – such as water safety, the level of filtration, taste and brand trust – with the overall objective to strengthen the Frigidaire water filter brand.
Taste in particular stood out with previous research showing that 54% of consumers believe water dispensed from refrigerators and freezers tastes better than from other sources, including bottled water1. Taste was confirmed as a primary differentiator by testing different statements on consumers, with the ‘a difference you can taste’ tagline being top-rated by consumers. Safe water and reducing contaminants were also important differentiators identified by consumers.
Raising consumer awareness
Based on this insight, Electrolux created a campaign that speaks to those consumers most invested in regular filter replacement. This included a focus on social media and online retail partner channels with quality educational content to enable consumers to make an informed purchase and advising against choosing sub-standard filters.
The campaign raised awareness among consumers on the need to regularly replace their filter with a genuine Frigidaire product to ensure water quality and visual indicators to communicate when to change a filter. It also met the growing consumer trends for safety and healthy home environments, which have grown in importance during the coronavirus pandemic.
Water dispensers avoid plastic to landfill
In 2020, the 3.4 million Electrolux water filters sold in the U.S. and Canada avoided the use of approximately 4 billion plastic bottles of water, which prevented approximately 41,000 tons of plastic ending up in landfill. This helped Frigidaire achieve the Water Quality Sustainability Mark for best practice in environmental sustainability and corporate responsibility.
Supply chain efficiency and next phase
Electrolux has further reduced cost through supply chain economies of scale, volume discounts and material efficiencies.
The next phase of the aftermarket roadmap is being implemented throughout 2021 to further capture market share in a still largely untapped water filter market.
1) Source: C+R Research (2018-2019). Water Filter Research.