Are you a fan of cooking shows? Do you love experimenting with new recipes and creating mouth-watering dishes for your family and friends? If so, you are aware of the significance of kitchen appliances. But have you ever given the state of the kitchen appliance sector any thought? Despite being a necessity in every home, this sector is today on the verge of collapse. In this blog post, we’ll explore why this is happening and what it means for consumers like us. So buckle up and let’s dive into the world of kitchen appliances!
The Growth of the Kitchen Appliance Business
There are a few reasons why the kitchen appliance business is struggling. The first is that people aren’t using as many appliances as they used to. In fact, according to “The Wall Street Journal”, sales of kitchen appliances have decreased by more than 20% over the past five years.
Second, for a time now, appliance prices have been declining. This implies that individuals can purchase less expensive models of the same tool and continue to do their cooking or cleaning activities.
Finally, new technologies are enabling people to perform simple household chores like cooking and cleaning on their own at a lower cost. For instance, simple-to-use baking machines now allow home cooks to produce their own bread and pasta, while pressure washers may be used to swiftly and effectively clean a variety of surfaces.
So despite the fact that there are still a lot of people out there who need appliances for their kitchens, sales figures suggest that this market could be in trouble in the near future.
Declining Sales and Growing Competition
The kitchen appliance industry is in trouble. Sales are declining, and there’s growing competition from other electronic devices. A lot of this has to do with the way that people use and entertain themselves these days. Because more people are using smartphones and tablets, they are less likely to purchase kitchen or cleaning appliances.
A lot of the blame for this decline can be put on the recession, but it’s also true that there are other things people can spend their money on these days. Some of the big names in the kitchen appliance industry have been struggling for a while now, and there’s no indication that things are going to get better any time soon. One of the largest brands in this industry, Sears Holdings Corporation (SHLD), recently announced that 150 locations around the country would close. Sales data for KitchenAid and other brands owned by Sears Holdings Corporation will probably suffer as a result of this.
Kitchen appliances aren’t the only ones being impacted by this trend. Sales of all electronics were down during Q3 2014, which was largely attributed to weak demand in developed markets such as North America and Western Europe. It’s still too early to tell what kind of impact this trend will have on overall economic growth, but investors seem to be concerned about its potential consequences.
Current Trends in the Kitchen Appliance Business
The kitchen appliance business is flirting with disaster. According to analysts at IBISWorld, the global market for kitchen appliances will grow by just 2.4% in 2020, down from an estimated growth of 3.5% in 2019. This slowdown is due to a number of factors, including a lack of innovation and declining sales in China.
The decline in demand for conventional ovens and microwaves is the primary cause of this slowdown. New and more sophisticated models that include capabilities like voice recognition and artificial intelligence are replacing these outdated products. Additionally, customers are spending more money on internet-connected home products like smart ovens that can be operated through a smartphone app.
It’s not good news for businesses like KitchenAid, Electrolux, Jenn-Air, Whirlpool, and GE Appliances because the market for kitchen appliances is slowing down. These companies get around two-thirds of their revenue from selling conventional ovens and microwaves. These goods will find it difficult to sustain long-term profitability if they don’t sell successfully.
There are some mitigating factors to this slowdown in the kitchen appliance market. For example, Samsung has been successful in marketing its range of AI-enabled appliances, which has helped offset declines in sales of traditional ovens and microwaves from other manufacturers. Moreover, there has been increased investment in new technologies by companies such as Bosch and Samsung Electronics Co., Ltd., which could help stimulate growth
The Threat of a Kitchen Appliance Business Crash
The Kitchen Appliance Business Is Flirting With Disaster
For years, kitchen appliance sales have been on the rise. In fact, according to MarketWatch, kitchen appliances were the fastest-growing category in retail sales last year. But this increasing trend may not be sustainable. The culprit? Competition from online Retailers.
According to eMarketer, online retail sales will account for 29 percent of all retail sales in 2020. This is a huge increase from the 17 percent share they held in 2018. And while traditional retailers are fighting tooth and nail to hold onto their market share, online retailers are using price as their main weapon.
This is probably why kitchen appliance prices have been going down over the past few years. In 2013, the average price of a kitchen appliance was $288. By 2018, that number had decreased to $249. However, with Amazon selling appliances at an average of 58 percent below MSRP and Walmart selling appliances at an average of 45 percent below MSRP, it’s hard for smaller retailers to compete.
And this price decrease isn’t just a result of Walmart and Amazon; it’s also because online shopping platforms like Home Depot’s Shop Your Way and Lowe’s Own Your Way are becoming more popular. Through these platforms, shoppers can buy goods directly from the store without going through a retailer first. These platforms are also motivated to sell goods for less than traditional retailers do since they receive a commission from each sale.