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Whatever importance you place on energy efficiency, it is certainly an aspect of the global retail market that is growing and growing.
Looking at the findings of surveys and statistics behind attitudes and trends to energy efficiency in New Zealand, it’s clear that people are more aware of the topic. What isn’t always clear though is the priority being placed on efficiency etc during the purchase decision.
Some findings imply that Kiwis aren’t willing to splurge on energy efficient products, whereas other studies say the exact opposite, that we are willing to spend that extra amount.
BDT’s Sarah Ellison (Senior Product Manager – Supply & Logistics) says she has noticed an increase in consumers’ awareness of energy efficiency: “In the face of increasing electricity prices and a growing awareness of the importance of efficiency in general, NZ consumers have become a lot more aware of what to look for when purchasing appliances.”
Sarah Ellison feels consumers are coming to terms with the fact that, while initial costs may be higher, the long-term savings will provide payback. However, she tempers this because of the state of the economy.
“Unfortunately, in times of economic pressure and a downturn in consumer spending, the extra expense associated with choosing a more efficient product is often sacrificed first in favour of a low-cost short term solution.”
Prioritising the monetary value of efficiency can of course be variable and dependent on the product on a case-by-case basis. A recent Canstar Blue survey of the determining factors behind a purchase (see sidebar on pg 60 for more details) suggests, for instance, the purchase decision behind heat pumps is far more about energy efficiency compared to small domestic appliances and larger ones such as washing machines.
ENERGY EFFICIENCY OVER COST EFFICIENCY?
A recent study conducted by Roy Morgan (see sidebar on pg 62) shows that although the majority of New Zealanders surveyed are conscious of and active in relation to environmental issues, most of those surveyed feel that environmentally friendly products are overpriced.
Pip Elliott, General Manager of Roy Morgan Research NZ, says: “Three quarters of New Zealanders believe, rightly or wrongly, that “environmentally friendly” products are overpriced (compared to 68% of Australians), which presents a challenge for retailers and manufacturers of such items.
“However, with 61% of Kiwis considering themselves ‘an environmentalist at heart’ (compared to 58% of Australians), and less than a third believing threats to the environment are exaggerated, many probably still buy green-friendly products in spite of this perception.”
There is impetus behind all of this: “Four out of every five Kiwis feel that if we don’t act now we’ll never control our environmental problems – an attitude that inevitably colours their purchasing decisions. After all, at the end of the day, we all have to play our part in saving the planet. Buying sustainable, eco, biodegradable, non-toxic and/or organic products is an easy, conscience-soothing way to do that.”
Interestingly, Colmar Brunton’s recently published Better Business Better World Report 2013 (see sidebar on pg 65) shows that nearly two thirds of Kiwis surveyed are willing to pay more for organic, sustainable and ethical products available on the market.
The report also shows that Gen Y consumers are more environmentally conscious than others and the majority of general consumers place issues of sustainability as the main influence in purchasing home care and appliances and technology and communications products.
LABEL ME GREEN – FLOORCARE CHANGES AFOOT
In the Northern hemisphere, the European Union recently launched an energy label and eco design-related requirements for vacuum cleaners. The new label will be mandatory in the EU from September.
This year will see a wattage cap of 1600W and minimum dust pick-up requirements on carpet and hard floors with crevices. In 2017 that cap will be lowered to 900W and there will be requirements added for maximum noise, dust re-emission, durability and dust pick-up targets. One idea behind the labelling is to make it easier for consumers to compare the cleaning performance of different vacuum cleaners by utilising an A-G scale for energy efficiency.
Nilfisk’s Ian Caudwell feels that the introduction of energy labels and eco design-related product requirements for vacuums will be beneficial for the market and will level the playing field with regards to testing.
“At the end of the day, it gives the consumer an all-round rating of vacuum cleaners and I’m very for it. Currently manufacturers use many different standards of measurement, whereas this will force everybody to use the same methods; it finally offers the consumer a true case of measuring apples with apples.”
Alan Dalton, General Manager at Electrolux Small Appliances, feels that the consumer will be the overall winner as better products and factually correct information will be available to them.
Explaining the biggest aspect of the upcoming changes, Dalton says: “The main reason is to clearly show the consumer what the important factors are when making the decision to purchase and what is important to them. It also means all manufacturers will have to invest in R&D and ‘off the shelf’ product will lose out if not compliant.”
Nilfisk’s Ian Caudwell feels that suppliers will need to work closely with retail partners to bring consumers up to date and educate them around these changes when they come in: “Buyers for retail stores will need to really look at what products they’ll need to stock because they’ll have some machines that score well in power consumption, some in sound level, some in filtration and some in dust pick-up.
“But it is not possible to get an ‘A’ rating on all of the categories measured because to achieve one demands a sacrifice in another. So the consumer has to decide what’s important to them, and their decision will be a more educated one because all the brands will be measured the same way.”
This sentiment of retailers and suppliers working together is one shared by Alan Dalton. However, he stresses that the European rating system may not be able to be used here if the products destined for New Zealand are specified differently from Euro models, even if they’ve been manufactured in the European market.
“Like the ENERGY STAR rating it will be up to both supplier and retailer to ensure all are compliant with the requirements.”
Of course, a topic such as this will bring diverse opinions across the market and we will be looking at this further in depth in our next issue, with a feature solely based on floor care products.
A WIRELESS WAY TO GREENER HOMES
Looking even further out, much is also being made of connectivity and efficiency – the “smart home”. But in the here and now, BDT recently launched a Wi-Fi control app for the company’s heat pumps.
Sarah Ellison says the long term plan is to expand this feature to other heat pump ranges but, in the meantime, the Wi-Fi control is being developed for the brand’s Designer Series. “We fully intend to continue to promote this control option as a means to reducing energy consumption as well as preserve the comfort levels of homes.”
Samsung has also entered into the Wi-Fi control revolution after it launched its Smart Home platform at the 2014 Consumer Electronics Show in Las Vegas. Now, its Smart Home platform has started its global rollout and will first be made available in Korea, then in the US, before being introduced to other countries.
A free app, available from the Google Play store, lets the user control compatible Samsung TVs, washing machines, air conditioners and PCs when they are connected to the same wireless router. The manufacturer says that ultimately, users will be able to communicate a “good night” message to their remote control and this will automatically trigger other connected devices to turn off.
In Korea, the platform will be compatible with all Samsung’s 2014 smart TV models, its Q9000 air conditioner, the Bubbleshot 3W9000 washing machine, the Gear 2 and any smartphone running on Android 4.0 and above.
In the US, products that will be compatible include the Samsung Smart French Door refrigerator, Smart Front Loading Washing Machine, its Smart Front Loading Washing Machine, all 2014 smart TV sets, the Gear 2 and handsets with Android 4.0 and above.
The ability to control devices through an app would greatly help in reducing emissions, increasing energy efficiency and running a “greener” home. As BDT’s Sarah Ellison says: “Being able to control your heat pump’s operation remotely not only reduces wasted operation but also allows for operation to be automated when required.”
HOW GREEN ARE THE KIWIS?
Looking at things from a strictly Kiwi perspective, many retailers have been making considerable efforts to work with the ENERGY STAR programme run by EECA that has proved successful in raising awareness of energy efficiency and standards in the 12 years since its inception.
EECA’s General Manager for Products, Terry Collins, points to a merger with Australian authorities which has broadened the horizon of the programme, helping to spread the word about the work being done. Focusing on heat pumps, and speaking about the results of the work done by EECA alongside supplier and retail partners, Collins says that back in 2000, only 4% of New Zealand homes had heat pumps whereas now 25% have a heat pump installed.
“About 2005 we introduced ENERGY STAR logos onto heat pumps. The ENERGY STAR logo identified the top quarter most efficient heat pumps. At the time we introduced the programme, about 17% of the qualifying models made up about 21% of sales. Today, the qualifying models are still about 21% but they are two thirds of sales. So, through the use of that ENERGY STAR identifier, we’ve pushed everybody into buying the most efficient products.”
This increase in interest of consumers in energy efficiency is evident in many areas. Matthew Cutler-Walsh of Homestar, the online self-assessment tool that allows homeowners to rate their homes in terms of their “health” (its warmth, comfort and cost efficiency), says the site has seen an increase in users and hits in the last few years.
He says the site now has over 20,000 records and that 48% of traffic is returning users, which shows that Kiwis are using Homestar to help progress along the journey of improving their home. Cutler-Welsh says that EECA’s Warm Up New Zealand scheme spurred uplift in the condition of houses however he adds there is still a way to go before standards improve: “The vast majority of our existing homes are still of a fairly poor standard,” he says.
Another initiative that will be looking to improve energy usage is the New Zealand Smart Grid Forum (the “Smart Grid” being the interaction of appliances and power grid with a view to improving cost and efficiencies). The members of this Forum were announced in March and EECA’s Terry Collins is one of these.
Collins says that, while there have been no concrete plans put in place so far, there has already been action in regards to heat pumps. Already, many of the heat pumps sold in New Zealand today can, at some point in the future, be connected to a Smart Grid with a control box.
Terry Collins says: “Even though no decisions have been made about how to control the unit, the unit can be controlled already. Buying efficient equipment makes a lot of sense and if you start thinking about how much you can save over time, using our calculators, only a small bit extra sometimes really saves you a lot on your bills.”
HOW CAN WE GET GREENER?
So there certainly seems to be a shift in the market and the country in general towards a more efficient, green-conscious society. What role do suppliers and retailers play in this?
EECA’s Terry Collins, who says the sum of EECA’s programmes hopes to save the same amount of energy in one year that Hamilton uses in a year, says that raising the awareness of long term cost effectiveness is key. Collins says the programme works closely with retailers and suppliers involved with the scheme.
“We do mutual benefit marketing, we get together and work out messaging for consumers to get a hold of these products. We’d encourage more suppliers and retailers to get in touch with us to work with that. We are one of the top 30 advertisers and marketers in the country and we don’t market our own product – we market a class of product and let the industry compete on other features in the market. All the things we get from our research are that it’s independent advertising and it’s in the Government procurement programmes too.”
Matthew Cutler-Walsh at Homestar says suppliers can do much to promote energy efficiency at the same time as generating revenue. Looking at specific product areas, Cutler-Walsh sees particular opportunities for suppliers around lighting and ventilation.
BDT’s Sarah Ellison also implores retailers to get behind efforts being made to be “greener” as it offers great opportunities for building relationships with consumers: “It is really important for retailers to get behind this message and to understand what products are energy efficient and why. Consumers trust advice offered by retail sales people and need to know that they are not going to get any nasty surprises in their power bills. It’s about understanding what an appliance is going to cost to run.”
And in this respect there is more work to be done. As the Canstar Blue research on page 60 shows, there is still a level of hesitancy amongst Kiwis around energy efficient products being perceived as too expensive. The flipside is that this is just an objection to overcome which is like a red rag to bull or an incentive to most good salespeople.
Matthew Cutler-Walsh implores retailers and suppliers to take advantage of the role they play in promoting energy efficiency: “Facts and figures help, but a lot of decisions about homes are more emotive than that. Retailers and suppliers have an opportunity to get creative about how they demonstrate the benefits.”
YOU CAN SEE WHY CONSUMERS BUY
Canstar Blue has released a study looking at the factors behind the purchase of certain retail products. This study offers some interesting, although not altogether surprising, insights. Value for money, functionality and energy efficiency came out on top most often.
The following percentages indicate the relative importance of different attributes when buying an appliance. The chart included separates out the energy efficiency component for the sake of showing the substantial difference in its importance as a buying factor between the various products.
Source: Canstar Blue (www.canstarblue.co.nz).
DO KIWIS NEED AN ATTITUDE ADJUSTMENT?
Roy Morgan continues to look at the attitudinal statements made by Aussies and Kiwis around the environment and green issues. Looking at the latest results, it appears Kiwis certainly identify themselves as environmentally conscious, but are perhaps somewhat hesitant to spend extra dollars on environmental friendly products.
So Kiwis come out slightly less “green” than our Aussie counterparts. Certainly there would seem to be some scope for education the market and the consumers on the long-term cost effectiveness of energy efficient products. The following outlooks are dated December 2013.
Source: Roy Morgan New Zealand (www.roymorgan.com).
IS GEN Y JUST A LITTLE GREENER?
Colmar Brunton recently released its 5th monitor of New Zealanders’ perceptions, attitudes and behaviours around sustainability in the form of the Better Business Better World Report 2013. The report (http://bit.ly/1dWeXwZ) was conducted in August last year with 1,000 people online. The report shows some interesting results. The Gen Ys surveyed show the most awareness around these issues. The majority of people surveyed say that they want as much information as possible so they can make informed decisions.
Few are willing to pay “whatever it costs” to get the best organic/sustainable/ ethical products available:
But most are willing to pay a bit more:
How much influence do issues of sustainability have on who you choose to buy or deal with?
Home-care and appliance manufacturers:
Technology and communications suppliers:
I want to know all the facts and information so I can make intelligent decisions:
Source: Colmar Brunton (www.colmarbrunton.co.nz).