If you buy a washing machine from a major appliance chain, you know that the right people will come to take down the old machine, install the new one, show you how it works, pick up the old machine for recycling, and give you a recycling gift. certificate. If you order from a separate online store, you will most likely pay a lower price for the same washing machine, but you will have to dismantle the appliances yourself and then most likely try to bring a new one into the bathroom, which is difficult due to the large weight. and trying to install it and find out how it works. If you have friends and family who can help, that’s fine.

Thus, in the sphere of services and payment systems, the competition of large “players” operating in the domestic market of household electrical and electronic devices is transferred. Given that the margins of competition in product prices are limited due to the little flexibility that exists in this area between retailers and their suppliers, efforts to increase or at least maintain market share are made mainly by providing more and more services. from the extension of the warranty to the dismantling of old appliances and the installation of new ones, as well as through the issuance of consumer loans for the purchase of mainly large household appliances. By providing more services, chains increase their revenues and improve profit margins, since services contribute even 50% of their total profits.

Services such as device removal and installation, longer warranties and gift certificates are helping chains maintain market share.

Providing more services gives a competitive advantage mainly to smaller stores operating in this sector and mainly to those who make their products available through e-commerce platforms (marketplaces), stores that do not provide these services but usually have devices on lower prices due to much lower operating, advertising and marketing costs. Of course, Skroutz is now trying to compete in this area as well, in terms of purchases made by stores that partner with its platform, but through it now provides, at least for the Attica region, services for uninstalling and installing devices.

The speed of delivery of orders is also a big field for competition, especially after the failures recorded in the spring and winter of 2020 during the first and second quarantine. The major chains in this sector, in addition to promising delivery on the same day after placing an order, have been providing the consumer with the opportunity to be constantly aware of the location of their order for several months. Now Public offers flexible delivery (delivery on the day the customer wishes) for orders in Attica, and Kotsovolos will soon launch a similar service: the customer chooses the day and time when the order will be delivered to him, while it will be possible to change the day and time delivery electronically.

Because spending, especially on appliances, is high and often unplanned, chains are also competing in the convenience of paying in installments that don’t require a credit card. This is done either through the issuance of consumer loans or under the Buy Now, Pay Later (BNPL) model for newcomers to Greece, which allows payment in interest-free installments even with a debit card.

Sales fall as consumers cut spending driven by inflation

The establishment of payment systems in the consumer electrical and electronic appliance sector is considered critical at this time, a time of strong inflationary pressures that are already having a negative impact on this sector.
In fact, they are provided by large chains, and when purchases are made in their online stores, it is precisely because online sales, despite the full operation of physical stores, hold up well, sales that to a very large extent are also carried out through online stores. small stores that cooperate with marketplaces, mainly Skroutz and Shopflix.

In the first quarter of 2022, the share of online sales was 15.2%, lower than in 2021 (18.2%), but at a much higher level compared to the pre-pandemic era (9.9% in 2019 according to GfK).

However, the picture from the market, precisely because of the pressure on family budgets, is not at all good, unlike what happened in 2021. In 2021, in our second year of life with the pandemic, the home appliance electrical and electronics market closed with an increase in sales volume of 8.64% and sales value of 22.48%.

The turnover of this market was 2.565 billion euros, compared to 2.09 billion euros in 2020. It is worth noting that extensive remote work and distance learning, as well as the Digital Care program for subsidized computer purchases by students, played an important role in increasing turnover in 2021.

In 2022, the picture in this market, at least according to the first half of the year, is not very good. According to GfK TEMAX data, between January and April 2022, the sales volume of this category of products fell by 13.12%, resulting in a decrease in the cost of sales by 6.27%. In fact, in May and June the market shows a further slowdown.

In particular, four-month sales in this sector amounted to 692.56 million euros, compared to 738.89 million euros in the corresponding period of 2021, with 5,701,997 units sold this year compared to 6,563,432 last year year. The largest decrease in turnover and sales volume was recorded for small kitchen appliances (a decrease in turnover by 11.35% and in terms of volume by 27.32%), IT products (computers and tablets), while the decrease in turnover amounted to about 34.77% and sales volume 33.33%.

Unlike the first phase of the Digital Care program, the second phase, concerning a subsidy for teachers to buy computers, did not produce the expected results. There is also strong dissatisfaction in the industry with the delay in the Switch Device program. This is because the scheme has been announced since February, but the issuance of subsidy vouchers has not yet begun, which is expected earlier this week.

This prevented consumers from buying air conditioners early, and the low number of eligible bids caused a new round of disappointment.

A lot, according to the factors of the market in question, is estimated to be saved by tourism, both because purchases of electrical and electronic devices by tourist accommodation companies will increase, and because, in general, an increase in tourism revenue will strengthen available consumption income. This, of course, remains to be seen.

Reducing … weddings – a blow to the industry

In addition to the pandemic, which caused an increase in sales of technology products but a decrease in sales of home appliances, inflation that has affected the overall market for electrical and electronic devices, the sector has also experienced a reduction in … weddings. This is because the creation of new households is an important part of the demand for the industry in question, as outlined in an industry study recently conducted by the business consulting company Stohazis.

Thus, according to the study, the number of households has been continuously decreasing since 2014, with the exception of 2018, while 2020 is at the lowest levels of the period 2010-2020. In addition, the number of registered marriages for the period 2016-2020 decreased compared to the period 2013-2015, and the decrease was not only due to the pandemic, which in 2020 led to numerous postponements of marriages. There were 56,338 marriages in 2010, with the number falling below 55,000 during the years of deep crisis. In 2012, they fell below 50,000 (49,705) for the first time and then increased slightly. In 2016 they also fell below 50,000 (49,632), and since 2018 there has been a sharp downward trend: 47,428 marriages in 2018 from 50,138 in 2017, 47,137 in 2019 and 31,475 in 2020.

As for the number of households, it has been constantly decreasing since 2014 (with the exception of 2018), and 2020 was at its lowest level for the period 2010-2020. Thus, from 4,178,116 households in 2013, their number decreased to 4,079,548 in 2017, and in 2020 it reached 4,076,189.

However, the Stochazis study estimates that this year the market, despite any problems, will close positively with a low single-digit percentage, below 5%, while in the period 2022-2024 the average annual rate of change will be about 6.5%. Of course, the authors of the Ad. Regusas and K. Matsuka note that forecasts are likely to show strong volatility due to adverse conditions caused by the war in Ukraine.