Your kitchen isn't just a kitchen anymore.
"The kitchen space has been redefined as another living space. The lines have been blurred between living room and kitchen," said Tim Matis, director of advertising at GE Appliances, which just completed a $1 billion overhaul of the unit to better reflect how appliances fit into consumer's lives.
The redo used consumer insights to make changes in everything from design to manufacturing and marketing, and the results will become clear Aug. 5 when GE breaks an aggressive new campaign themed "Reimagining Home."
The TV and digital effort from BBDO, New York, will highlight modern and minimalist "macro-design" changes, as well as technology innovations and consumer-inspired modifications. "We wanted to give a nod to consumers and their role in our process," said Mr. Matis.
The digital work, for instance, features "You Said" statements and GE's response, such as "You Said: It takes too long to fill a water bottle. So we developed hands-free auto-fill." Real-time social sentiments related to the kitchen, such as what people are talking about for dinner right now, will also pepper the GE appliance web site, said Juliana Cobb, exec creative director at BBDO.
"By paying a great deal of attention to how consumers live life in their homes and in their kitchens, GE is rethinking the way they design and engineer appliances," she said.
The timing is good for GE's push, as the $15.5 billion U.S. major household appliance industry is gingerly recovering after several years of declining revenue attributed to the housing market downturn and weakened consumer spending. Industry revenue declined at an average rate of 4.3% since 2008, according to IBISWorld, but the researcher expects a small uptick of 0.2% this year and an overall 2.8% average annual increase through 2018, propelling the U.S. industry revenue to $17.7 billion.
U.S. market-share leader Whirlpool recently noted a 75% increase in second quarter profits over first quarter, and raised its outlook for the year. GE reported an 8% increase in appliance revenue year over year for the second quarter, while Electrolux recorded a second-quarter increase of 3% in North American sales year-over-year.
Whirlpool, which includes Maytag and Kitchen Aid brands, holds a 40.9% market share in the U.S., followed by Electrolux at 23.8%, GE at 19.7% and LG Electronics at 7.4%, according to IBISWorld.
Advertising is on the upswing, too. Whirlpool spent $23.4 million in measured media on its Whirlpool and Maytag brands through May of this year versus $1.4 million during the same time period in 2012, according to Kantar Media. Electrolux increased spending more than six-fold to $6 million on its Frigidaire brand compared to less than $1 million during the same period. LG spent $11.2 million through May versus $3.4 million while GE spent $7.4 million versus $6.9 million in the first five months of this year compared with 2012.
Electrolux spending on its higher-end Electrolux brand was down year over year during that time period, however, it just began a new campaign in July, said Electrolux CMO John Weinstock. The campaign continues with TV star Kelly Ripa as spokesperson and TV ads highlight a new smart French door refrigerator and induction range built on the insight that consumers are entertaining at home more than ever. Electrolux has also created an online lifestyle magazine featuring entertaining, cooking, design and style content called "Live. Love. Lux."
"We see the market growing and accelerating greatly," Mr. Weinstock said. "We view it as a great time to invest in our brand."
Keep it simple
Bill Beck, a Whirlpool senior marketing director, said its "Designed to Simplify" brand campaign begun in early 2012, which includes the recent well-received "Teen Jeans" washing machine TV spot, has raised Whirlpool brand awareness by 3% since its launch.
That's important, he said, because consumers are now moving from the recessionary practice of replacing boxes as a necessity toward more aspirational devices seeking out desired features and innovations.
Gap Intelligence analyst Christine Boersing noted that in-store and print advertising for the refrigerator, range and laundry categories she tracks at retailers including Best Buy, Home Depot and Sears more than tripled during the Fourth of July holiday over the previous Memorial Day holiday. She expects the warming housing market to continue to drive up appliance in-store and overall advertising appliance spending.
Social media and digital will likely play important roles in the appliance revival as manufacturers try to build closer ties and build long-term relationships and brand affinity with consumers.
GE's new effort includes a social-media promotion beginning Aug. 19 using the hashtag #cookingfail that invites consumers to share kitchen cooking failure stories and photos. The greatest fail "winner" will get a chance at redemption with a celebrity chef in the TV and web kitchen featured in GE's marketing.
"From a digital perspective, it's about ongoing engagement," said Wendy Brown, head of GE Appliances digital marketing. "Going beyond this campaign, and growing the back room with content that engages people and keeps the relationship going."