The unpredictable British weather and concerns about air quality has helped make air treatment a sizeable and significant category says Sarah Selzer.
As the main element characterising air treatment is cooling – predominantly air conditioning, which is the biggest sector, and fans – manufacturers and retailers alike can join the hordes of British consumers praying for a hot summer this year.
The last two years have indeed seen very hot weather which has then led to an increase in sales of products that make the air ‘comfortable’ around the home. That has focused on mobile air conditioners, as consumers seek to replicate the pleasant cool surroundings of their office or their car, but also – as a significantly cheaper option – portable fans. There is probably less need for a concerted consumer educational campaign around these products – it’s hot, you need to cool down, so if you can afford it, opt for a mobile air con unit, or for a cheaper quick fix, a fan.
Educating the customer
But those products which offer more air ‘treatment’, such as dehumidifiers, humidifiers and the various air purifiers, still haven’t quite broken through the comprehension barrier.
Bionaire’s key air treatment business is centred on air purifiers, humidifiers and fans. The brand is supported throughout the year with PR in target consumer magazines and via PoS and staff training, while the range of air purifiers carries The British Allergy Foundation ‘Seal of Approval’. Bionaire marketing manager Virginie De Vliegher says this does add to consumer confidence, “especially when they are buying a product to help improve the home environment of a person with an allergy to pollen, dust mites or animals,” she says. “The air purifier and humidifier sectors are performing well and growing year on year, but the challenge is educating consumers and showing them why they need these products and what the benefits they can bring to their home environment.
“Fans certainly performed well in 2006 as a result of the heat wave, but this particular sector definitely depends on the weather.”
Cumulative annual sales of air conditioning products, dehumidifiers and humidifiers and air purifiers are around £52 million per year, growing at around 33% year on year. Fans are estimated to be worth an additional £32 million alone (source: Micromark), so it is understandably a market that sustains interest.
From a retail point of view, fans represent a ‘must have’ solution to the brief and frequent bursts of scorching hot weather we now get in the UK, and manufacturers have paid attention to design and some functionality to give added value (see below).
But on the whole, the real money is to be made elsewhere – in air treatment.
Air conditioning (including portable and split units) is the largest sector, worth around £21.3 million. Both volume and value are growing at over 30%, with those all important average price points rising at around 4% per year. Portable air conditioners are probably the easiest to sell and the most popular, although there is some movement towards wall mounted units. The portables are actually starting to suffer from an influx of own brands, and average prices are on the way down.
But it is a sector well supported by manufacturers. Jacky Neal, product manager at Micromark, which is active in air conditioners as well as fans and dehumidifiers, puts this down to the pressure being brought to bear at the cheaper end of the market. “Established big names are suffering and for this reason are placing a lot of emphasis on new product development,” she says. “One example is to focus on trying to sell seasonal products all year round by adding features such as particle filters for air purification and dehumidification functions.”
De’Longhi could be classed as one of those “big names” but far from suffering, UK marketing manager Giovanni Toffano says consumers are beginning to trade up. “The emerging market has a high dominance of own-label products, but importantly the bar has been raised as consumers are now more aware of the performance and capabilities of portables air conditioners,” he says. “Hence they want the assurance of a brand and are starting to trade up to higher specified units, with more features and better performance.”
The latest product developments
New products for 2007 from De’Longhi include a combined ‘home and professional’ range with entry level single units (from £249.99) and a water-to-air unit PACW130A (£699.99). This is a turbo boost model, offering rapid cooling and high power (13,000BTU/h) plus eco-friendly refrigerant and new styling.
The consumer market does seem to have engaged with the concept of dehumidifying and that sector has also seen good growth – up around 34% in volume and worth around £15.5 million. According to Jacky Neal at Micromark, dehumidifiers have the highest volume in the entire air treatment market, but only saw a 14% rise in value due to a fall in prices. “Household penetration of dehumidifiers is low,” she says, “but the market potential is high, provided there is continued exposure to these products and their benefits. Continued education is essential for consumers.”
This is a path Ebac has followed with its range of dehumidifiers, aimed at the top end of the market. Global product manager Andrew Hobson says aawareness of dehumidifiers is increasing, albeit at a slow rate. “It is still classed as a distress purchase,” he says. “The benefits of a dehumidifier can only be described when you have experienced one within your home, ie the environment it creates and also its secondary benefits, drying clothes quicker indoors by up to 30% and helping asthma sufferers as it filters the air and lowers productivity of dustmites.”
The company relays this message through its national advertising campaigns, including TV, and is launching the Powerpac 18 litre and 21 litre this year at £179 and £199.
Air purifiers and humidifiers
Air purifiers and humidifiers are probably the least known of the air treatment sectors and in a way this has saved them from the ravages of a price war. Virginie De Vliegher at Bionaire says with these two product categories, price is not really a major concern. “Consumers are usually buying a product to solve a problem or to improve their home environment,” she says. “They will spend what they need in order to get the right one for them or their family. However, fans are a very different sector. The market as a whole is very competitive, with a lot of unbranded and private labels which are cheap, low quality products.”
In dehumidifiers, around 60% of all sold are in the sub £99 bracket, according to Andrew Hobson from Ebac. “Although volumes are here at this price point, profitability is not,” he says. “We focus on the 30% of the market targeted at £145 plus, with superior design, quality and technology, and this is reflected in the price the consumer will pay.”
The influx of cheaper products could actually benefit the market as a whole he says. “When you buy your first car, it is not a Mercedes, it’s a Fiesta. You are happy that you have a car, but your needs and desires then change when looking for your second car. That’s the same with dehumidifiers – after purchasing a cheap import, consumers will always invest that little more second time round.”
Giovanni Toffano from De’Longhi agrees. The company has seen growth from the launch of portables into its range of dehumidifiers. “Their compact dimensions, portability and new lower price points make them ideal for the growing sector of flats, single person households and holiday homes.”
All sectors have focused on style and, in some cases, technology to stimulate growth. In fans, tower models have been proving popular, and basically anything in chrome and steel. New from Bionaire is a range of brushed chrome fans with glass bases.
Air conditioners have gone more for the technology options, with ECC (electronic climate control), electronic timers and remote controls, but style is there too. Future trends, says Jacky Neal at Micromark will include curved edges and finishes such as foil, giving the effect of brushed aluminium.
So how can independent retailers make a success of air treatment? The advice seems to be, stock a range of brands and price points – and order in time. Andrew Hobson at Ebac suggests that maintaining a UK manufacturing base as Ebac does, gives retailers the flexibility as they don’t have to commit to large stock quantities and be left with surplus during the summer. “Independents can also become specialists within a market that is too small for the key retailers to commit more space to,” he says. “So they can take advantage of the demand for more superior dehumidifiers with colour options, compared to the large retailers where it is always a ‘white box’ style that is offered.”
Virginie De Vliegher at Bionaire says it is about assessing and comprehending the market. “Retailers need to understand the market dynamics and needs of air purifiers and humidifiers, so that they can confidently talk to consumers about the benefits of these products,” she says. “With fans, retailers need to offer a wide range of branded products so that their customers can choose from a full and varied selection.”
De’Longhi offers ‘help at hand’ guides, an online specifiers guide (www.delonghi.co.uk) and a customer support line for sales staff and customers. “The best advice is to have a strong bank of knowledge on air treatment to offer considered sales advice and steer people to the right product,” says Giovanni Toffano.
• Stock a range of brands and price points
• Consider becoming an air treatment specialist; this is too ‘niche’ an area for multiples
• Gather knowledge and facts on air treatment to sell with confidence
• Get to know the benefits and requirements for air purifiers and dehumidifiers and lead the way with sales advice