Zenith forecasts that home-appliance advertising in 12 key markets will grow ahead of advertising as a whole in 2021, expanding by 12.6 per cent while total advertising grows by 11.5 per cent.
Forced to spend more time at home, consumers are investing in making their homes more pleasant to live in, using some of the money freed up by being unable to socialise or go on holiday.
This is fuelling rapid growth in demand for both large and small appliances, particularly cookers, washing machines, dishwashers and air conditioning units.
Despite the easing of coronavirus restrictions, Zenith expects consumers will continue to devote more of their time and budgets to the home than they did before the pandemic, and forecast six per cent annual growth in home appliance adspend in 2022 and 2023.
In Australia, Zenith predicts that advertising expenditure by home appliance brands will rise from US$260m in 2020, to US$318m this year – ahead of the US$303m spent before the pandemic in 2019. By 2023, adspend will reach US $337m.
According to a national ZenPoll carried out last month, with more Australians now working from home, 58 per cent agree that it is more important than ever to make their house a home.
One in three (34 per cent) are investing more in home improvements, and more than a quarter (28 per cent) have invested more in home appliances since the start of the pandemic.
Further, with many people cooking at home in lockdown, 62 per cent are making an effort to eat healthier.
Overall, the ZenPoll found that when it comes to purchasing large appliances, 80 per cent of Australians still prefer to purchase these in-store than online, with 67 per cent preferring to purchase small appliances in-store.
Zenith Australia’s chief executive officer, Nickie Scriven (pictured) said: “In this category, shoppers enjoy being able to physically see and compare features, to feel confident that their purchase will suit their specific needs.”
“That said, given how greatly our lifestyles have evolved since the pandemic, consumers are no longer delaying purchases of appliances, rather they are seeking items that bring enjoyment and ease to their at-home experience.”
Brand building and ecommerce to drive 10 per cent annual growth in digital adspend
Digital advertising accounted for 55 per cent of home-appliance adspend in 2020, up from 51 per cent in 2019. It is essential both for brand building – mainly using online video, native advertising and social media – and performance, using paid search. Most purchases of large home appliances are distressed: made out of urgent necessity, to replace a broken appliance.
With few distinguishing features between physical appliances, brand advertising is essential for creating differentiation and placing the brand at the top of mind when the consumer realises they need to buy. Paid search is then used for conversion during the short window of opportunity when the consumer is researching replacement options.
Digital advertising will become even more important to home-appliance brands over the next few years as they continue to embrace ecommerce.
Home-appliance brands were already well ahead of the market in adopting ecommerce before 2020, but the pandemic led to a step-change in home-appliance ecommerce.
According to Euromonitor International, ecommerce rose from 23 per cent of home-appliance retail sales in 2019 to 32 per cent in 2020, compared to 16 per cent of the market as a whole in 2019, and 21 per cent in 2020.
Zenith expects home-appliance brands to continue to invest in ecommerce over the next few years, driving 10 per cent annual average growth in their digital adspend between 2020 and 2023. Digital advertising will rise from 55 per cent to 57 per cent of their ad budgets over this time.
In Australia, digital ad spend is expected to increase by 22 per cent this year, almost double compared to 2020.
Zenith Australia’s national head of digital & data, Joshua Lee, said: “To remain top of mind, brands are turning to video, social and mobile for reach and cut-through.The category is set for modest growth of 5 per cent over the next two years, as at-home behaviours begin to curb.”
Television is still a vital channel for home-appliance brand-building, supplemented by out-of-home.
Home-appliance brands spend substantially more on these media than the average brand: in 2020 they spent 29 per cent of their budgets on television advertising, compared to an average of 24 per cent, and 7 per cent on out-of-home, compared to 4 per cent.
Zenith forecasts out-of-home expenditure by home-appliance brands to grow 8 per cent a year between 2020 and 2023.
Television, suffering from the continued migration of audiences to digital channels, will lag behind slightly, with growth averaging 6 per cent a year.
“Faced with rising interest in purchase, the increased role of digital in the mid-to-lower funnel, and a greater focus on delivering direct-to-consumer experiences, appliance brands have never operated in a more demanding and complex marketplace,” said Drew Erskine, global strategy lead, Zenith.
“Successfully building brands for the long term will require agile strategies that find the balance between cultivating desire through broad communications and converting interest, often digitally, in more relevant ways.”
Expected growth as consumers make more first-time purchases
Australia, Spain, the UK and the US suffered from big drops in home appliance adspend in 2020, and are consequently expected to enjoy healthy recoveries as brands recommit to the market. Zenith forecasts annual growth of 9 per cent to 14 per cent a year in these markets between 2020 and 2023.
