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Sustainability Focus as a Cost-Saving Strategy for Australian Major Appliance Brands

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Consumer behaviour in Australia is undergoing a significant shift due to environmental, economic, and geopolitical uncertainty. Concurrently, the country’s government is placing a spotlight on sustainability, and amid a cost-of-living crisis, major appliance manufacturers are connecting with customers by prioritising sustainability, emphasising energy efficiency, and reducing food wastage.

Sustainability as a cost-saving strategy gains favour amid industry challenges

In 2023, the Australian appliance industry faced soft demand due to a volatile economic environment. Throughout the year, the Reserve Bank of Australia (RBA) implemented tighter monetary policies, marked by multiple interest rate hikes which intensified pressure on consumer discretionary spending. This, combined with sluggish performance in the property market, subdued the demand for appliances.

A focus on sustainability has emerged as a pivotal strategy for companies seeking to navigate these challenges.

60% of Australian consumers demonstrate awareness of sustainability issues, with many actively striving to positively impact the planet

Source: Euromonitor International’s Voice of the Industry: Sustainability Survey 2022

This shift towards conscious consumerism is underscored by a prioritisation of energy and water efficiency, particularly within major appliances. Consumers view high energy ratings as a gateway to long-term savings, prompting investment in energy-efficient appliances for sustained value and cost savings. Consequently, companies are increasingly leveraging sustainability claims as strategic means to empower consumers in achieving their cost-saving objectives, thereby enhancing market competitiveness.Chart showing Consumer Appliance Volume Growth in Australia

Regulatory updates enhance energy efficiency in Australia's appliance market

On 20 September 2023, Australia’s government passed the Greenhouse and Energy Minimum Standards Amendment (Administrative Changes) Bill 2023 (GEMS Bill). These revisions aim to modernise the GEMS Act 2012, streamlining compliance processes for businesses and industries while providing greater flexibility in introducing energy-efficient products. For instance, the GEMS Regulator can now acknowledge equivalent testing methods, eliminating redundant testing requirements for products entering the Australian market. This is significant as it creates a more favourable environment for the development, production, and adoption of energy-efficient appliances in Australia. It also aligns with the nation's international climate commitments of achieving Net Zero emissions by 2050.

Energy efficiency and food waste solutions at the forefront of company initiatives

In refrigeration appliances, preserving food and advanced cooling technology are key areas of focus to enhance brand competitiveness amid rising food costs.

62% of consumers in Australia view reducing their food waste to have a positive impact on the environment

Source: Euromonitor International’s Voice of the Industry: Sustainability Survey 2022

This is manifested in efforts by leading players, such as Electrolux emphasising continuous investments in food preservation (TasteSealFlex, TasteLockAuto functionality) and sustainability features in its portfolio offering.

In laundry appliances, Australian households prefer models that integrate shorter wash cycles with full washing capacity. This is considered a practical way to achieve significant energy savings. Additionally, the auto dosing feature has generated interest, whereby the detection of wash load and the dispensing of the precise dose of laundry detergent needed prevent excessive suds during the wash, while minimising wastage.

To this end, companies are promoting high energy ratings as a key selling point. TCL released a new Heat Pump dryer with an 8-star energy efficiency rating. Similarly, Hisense introduced a refrigerator with a 7-star energy rating, winning the Canstar Blue Innovation Award.

Over the past five years, sustainability has been propelled by smart technology, leading to the introduction of more products by manufacturers. Examples include Beko's EnergySpin technology integrated into washing machines, which seeks to optimise detergent, energy and water use, while Samsung’s Less Microfibre Cycle, as part of its Bespoke Laundry series, aims to mitigate microplastic pollution in waterways. These developments mark strides towards attaining sustainability objectives through the incorporation of innovative AI technology.Chart showing adoption of smart technology in Australia

Sustainability-driven cost savings become more practical in messaging campaigns

Sustainability is now taking centre stage in marketing and PR initiatives with manufacturers prioritising sustainable messaging by offering concise and contextual details about product attributes, and steering away from generic labels such as "eco-friendly". The aim is to empower decision making via tangible information rather than vague promises. For instance, LG Electronics Australia positions its range of front-loading washing machines as achieving 5-star energy rating and high WELS (Water Efficiency Labelling & Standards) water rating, claiming to offer energy savings of up to 27% and water savings of up to 30% for each additional star.

In conclusion, appliance brands in Australia are looking to solidify their market competitiveness by emphasising sustainability features as a cost-saving solution to aid consumers in achieving enduring savings. In the near term, leveraging regulatory goals, the industry can expect to see a continued focus on high energy efficiency, and practical messaging campaigns that quantify savings.

Read our article Consumer Appliances in Australia for further analysis on the Australian Appliance Industry, or download our new briefing, Affordable Sustainability: Embracing Sustainable Living on a Budget, for in-depth trend descriptions, case studies and strategic recommendations.

To learn more about Sustainability, read our report, Sustainability in Australia, to explore opportunities in this highly dynamic space, based on the analysis of consumer behaviour, business strategies and market trends in product claims.

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