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Was it worth it? More than 32 hours’ travelling each way. Jet lag. Cattle class. Sounds like a nightmare? But was it worth it? Yes. Categorically, yes.
I had been to IFA on a couple of occasions in the 1980s but hadn’t been back to Berlin since well before the Wall came down…
IFA may still be regarded as a domestic show but, judging by the range of visitors from New Zealand and the rest of the Asia Pacific, particularly this year, one has to say it is still very far from a mere national event.
Berlin always was special, out on its own in more ways than one, and you can say that IFA still has more of a European than a German vibe these days.
The following extended coverage is the result of a week’s worth of key meetings (the kind of thing you cannot do remotely!) and general foot slogging.
My thanks in particular for the hospitality of Miele, Electrolux Small Appliances, Philips and BSH (the fruits of which you can read below!).
Now read on to see some of the good stuff that I found.
SOME IFA 2015 STANDOUTS
I selected the following products that were launched at IFA, not as a definitive guide but as starter for some of the trends in and around the main product categories.
I travelled to the 2015 IFA trade fair in Berlin with the help of the New Zealand German Business Association (www.germantrade.co.nz) and Messe Berlin (www.messe-berlin.de/en/), for whose aid I am grateful. Next year IFA takes place over 2-7 September 2016. Find out more about IFA here: http://b2b.ifa-berlin.com/
Read on for more IFA 2015 coverage…
TAKING YOUR BRAND PERSONALLY
One of the highlights of my trip to IFA 2015 was being lucky enough to share most of an hour – and the best part of half a dish of lollies – with Dr Reinhard Zinkann, Managing Director and Co-Proprietor of Miele & Cie.
Sitting in the inner sanctum of Miele’s massive presence at IFA, the day before the show opens, all around is busy but calm. Miele’s stand personnel are being briefed pre-show and there’s the sound of vacuum cleaners taking the fluff off the freshly laid signature crimson carpets.
Dr Reinhard Zinkann is responsible for Miele sales and marketing and, with Co-Proprietor, Dr Markus Miele, he continues the heritage of this family-owned business that started with Carl Miele and his ancestor and namesake, Reinhard Zinkann, back in 1899.
Dr Zinkann is in good spirits and looking forward to the show: “It is good – we love it. It is a good atmosphere and a great trade show. I enjoy being here.”
Surviving by taking control
We start talking about the origins of Miele’s Chartered Agency programme and where Miele may be taking this brand-managed programme next.
The Chartered Agency programme has been in Australia now for some 35+ years. It was dreamed up by Miele’s then President in Australia, the late Peter Murphy, who Dr Zinkann calls “a very special guy”.
Chartered Agents were Murphy’s response to a market which, at the time, was “completely crazy – the dealers were killing each other by price competition,” says the Doktor. “It was impossible to have positive revenues in the market. Many of our competitors pulled out of the market saying ‘we can’t give our products away for nothing’!”
Peter Murphy had been proprietor of the sole distributor of Yamaha products to Australia and New Zealand and, says Dr Zinkann, worked for Miele “for fun”. “He applied for a job with us because he loved the brand. He was completely independent and, by being independent, he did things differently. Probably that gave him the strength to think completely out of the box.”
Seeing that a step change was necessary for Miele in Australia, Murphy travelled to headquarters in Gütersloh to see the late Rudolf Miele and explained his thoughts about the agency system and the alternative – which was to do nothing and make no money.
Under the Chartered Agency system, Miele pays the agent a fixed fee for his services, owns the stock on display, delivers and installs it. Miele in effect manages the process, end to end.
As a result, says Dr Reinhard Zinkann today, “The dealers survived with us and have been extremely happy about it. Of course we have made a few minor alterations but it is still very successful and we have a very close partnership with the dealers.”
The basis of this agency system, with local adjustments, has also been introduced into for example Canada, Russia and parts of the USA, where it is called the Authorized Miele Direct Seller (AMDS) programme.
“Wherever it is, it is, in the end, successful,” says Dr Zinkann.
Would Miele still be in Australia or New Zealand without the Chartered Agency system? “I don’t know what would have happened because I don’t know what the trade would have done. It is simply a fallacy to believe that business can be done on the grounds of price alone as no-one would earn money that way.
“So I suppose that a change would have come anyway and we actually never pulled out of the market actively, so probably the market would have slowed down more and we would have stayed in it but I cannot tell you that for certain, I don’t know.”
What we do know is that for many years Australia has been Miele’s biggest market outside Germany. Now Australia is facing competition for the laurels of biggest export market from the US, which is “growing fast” and, given the population, will overtake the scale of the Lucky Country at some stage soon.
Looking after the brand, personally
As mentioned above, one of the secrets of Miele’s success has been about managing both the consumer’s perceptions and expectations and its own performance.
Says Dr Zinkann: “If you want to be a premium brand, then you have to offer top service. We could grow much faster in the US and also worldwide if we would not think in quality of after sales.
“For us the most valuable good is the brand. We have a proven track record and for the last 116 years we have always kept our brand promise – Immer besser (“Forever better”) – and we have to stick to that. As we only have one brand this is extremely important for us, it is one of our key assets and people trust in that.”
Dr Reinhard Zinkann being Miele’s chief brand guardian, it is at this point that I discover his compulsive side. That’s compulsive, in a positive sense.
He tells me a series of anecdotes about his visits to stores, Miele trade partners to clarify, those which are shoehorned into his short, condensed business trips around the world and those he manages to fit into his personal schedule…
“When I travel the world, wherever I can I do store checks, announced and unannounced. Our management take me around to see trade partners and of course I see the most important ones who I generally know and have a very close relationship with.”
But the Herr Doktor’s time off is also encroached upon: “I can’t withstand to at least look in the window – are we displayed? And then just a brief run in and check – it’s something in my genes! It’s the Miele stamp in my brain – but it’s fun, I love it and I always learn. Life has to do something with learning!
“I have to understand how business is done locally. Business always has to do with people, face to face, and with understanding of the values involved. It’s not all about just money or trading terms or whatever. So that’s why I regularly do store checks wherever I am and as much as possible.”
Staying close to the "Miele" family
Dr Zinkann also goes out with Miele’s sales reps and, having donned a Miele uniform, makes a point of travelling for a day with a service technician. In this way he stays close to both how Miele personnel perform and what the consumer is thinking and experiencing.
With the serviceman, “It takes 2-3 hours before the ice is broken but, at the end of the day, I know everything, about his family, about his life before Miele, about what he likes and so on. That is important to me, to understand our employees more and so they understand me because they are part of the family.
“I am always learning! I want to learn and understand more!” he says with emphasis. It’s about “understanding how the market thinks, how our employees think, how the consumer thinks.”
Even considering he is part of the Miele “family”, Reinhard Zinkann’s business modus operandi is clearly personal in several senses.
“Sales is about service and yes a lot of business is done via internet and yes many people inform themselves on the internet – they might even purchase things on the internet and they will and do so more and more – but there is still a demand for the personal approach and personal service.”
And this personal approach extends to Miele’s trade relationships: “I believe in a good solid partnership with our trade partners. The success of our trade partners is also our success. So we have to understand their needs and they have to understand our needs and our values.”
A quiet word from his attentive assistants and it’s clear that Dr Zinkann has a raft of items, pre-show, which he needs to address, so he takes his leave. I very much enjoyed our discussion and appreciate that he could spare the time to meet me in person.
CREATING (AND LIVING UP TO) HIGH EXPECTATIONS
You can wander the halls of IFA for the duration of the event without making much of a dent in the totality of what’s on show. So strategically, setting up one key meeting or event each day, where you can both take stock of the day and save your feet to boot, is a good thing.
On the second day of the show proper, I was invited behind the scenes on the Electrolux stand, where I met with Henrik Bergstrom, global President & CEO of Electrolux Small Appliances (above left), and Carol Chen, Senior VP and MD of Electrolux Small Appliances Asia Pacific (above right).
Henrik Bergstrom says the show continues to be a key event in Electrolux’s calendar because of the sheer scale of European business being written during the trade days and because all the key Asia Pacific customers also come to the show.
What are the company’s key focuses this year? He explains: “We are focusing in small and major appliances around culinary enjoyment – great tastes in the kitchen – and then of course from the floor care perspective around healthy homes.
“We have stepped up our investments in these two areas over the last 4-5 years with a lot of new products in particular over the last 2-3 years as consumers become much more interested in food preparation.
“It’s a phenomenon and an increasing interest, which is great for a company like Electrolux – it matches exactly what we love to deliver for consumers.”
Consumers taking the next step
The launch of the Electrolux Masterpiece range reflects the rise in Kiwi and indeed global interest in the premium category, says Bergstrom. The fast growth around premium SDAs is “a natural extension for us,” he says, “and builds on what we do in major appliances.”
Much research has gone into the value proposition which allows Electrolux’s consumers “to achieve more, to really engage” which is why Masterpiece has been “exceptionally well accepted”.
Adds Carol Chen, consumer expectations are very high with New Zealand brand awareness for Electrolux around 96%: “Therefore we have to deliver top products to our customer base and satisfy the needs of the New Zealand consumers, especially at the premium end.”
Henrik Bergstrom in fact goes so far as to call the New Zealand operation “a great success story”: “We have a very strong story in New Zealand – it’s an important market in our Asia Pacific portfolio. We’re seeing the benefits now of some of the work that we have been doing over the last several years.”
Carol Chen adds: “Alan [Dalton] and his team have been doing a fantastic job in terms of consumer insights and also consumer experience so we can really get closer to the consumer – that’s what it’s all about right, getting closer to the consumer?”
A more transparent floorcare market
Moving to floor care, the conversation shifts towards the new efficiency and labelling regime that’s now in place in Europe. “This new regime has produced dramatic shifts in requirements here in Europe,” says Henrik Bergstrom.
The changes came in a year ago with relatively short notice, but, he adds, the upside is that “We are able to prove to the market that you can actually achieve both a great cleaning performance and lower energy consumption!
“The other benefit of the combined energy labelling and eco design requirements is transparency for the consumer – it becomes much clearer to the consumer what they are actually choosing between so they can make a better choice.
“We welcome that because I think it has actually removed a lot of the not-so-truthful claims from the marketplace – there is nowhere to hide.”
I ask Henrik Bergstrom if there was one thing he would change about the New Zealand market what would it be? Smiling, he says: “It would be bigger! And a little closer!”
And so say all of us.
With “meaningful innovation in a digital age” the theme of Philips’ Executive VP and CEO of Consumer Lifestyle Pieter Nota’s IFA Opening Keynote speech, it wasn’t a surprise to find that the star of Philips’ show stand, for me at least, was its new “personal health programs”.
That’s not to say that visitors weren’t impressed by what else Philips had on show – its stand displayed a wide range of televisions, smart lighting, multi-cookers, laser guided razors (for a “truly tailored shave”), multi-room audio and video, oral, air and floor care, not to mention its digital parenting platform – but it was the world debut of its personal health products that took my interest.
I was kindly guided around the stand by Peter Bosscher, GM Sales at Philips Saeco Australia, who freely admitted that this new category was the subject of ongoing exploration down under.
Who is best placed to sell these products – healthcare professionals or various of the obvious consumer channels? Or a mixture of both? How will the support aspects work out and who should run that side of things?
What I can tell you is that the initial “personal health program”, launched at IFA, is now on sale in Germany with other markets to follow in 2016 and that future health programs will focus on heart health, back pain and other areas.
As shown at IFA, the initial program includes five health measurement devices which variously and together “measure, monitor and motivate”. All are Bluetooth-enabled to connect and transfer data automatically to the Philips HealthSuite Health app which allows users to track their measurements over time.
Individually, these products are probably no big deal but as a connected suite of health monitoring devices, this is a different kettle of fish.
Health Watch – A connected watch that includes a proprietary optical heart rate sensor and accelerometer and continuously measures health biometrics like heart rate, activity, and sleep patterns. Connected to the Philips HealthSuite Health app, a personalised health program supports and motivates the user.
Upper Arm Blood Pressure Monitor – A tubeless, rechargeable device to measure systolic and diastolic blood pressure as well as heart rate. Has an easy-to-read display with a large backlit screen.
Wrist Blood Pressure Monitor – As above but a smaller device that is rechargeable via USB.
Body Analysis Scale – This device measures weight, estimates body fat through Bio-Impedance Analysis, and calculates BMI. Supports up to 8 user profiles.
Ear Thermometer – Allows the accurate measurement of body temperature. Designed with adults, children and new-borns in mind for accurate results in two seconds.
Are we up for it?
With Royal Philips these days describing itself as “a diversified health and well-being company”, which retail channel will be the first to take a lead? Is it a big leap from selling Fitbits to this?
The ink on the brochures for these products may be barely dry but it is still timely to ask if the consumer electronics and appliance channel can afford to leave this opportunity to medical centres, the already medically connected pharmacies or even local GPs?
And, with the surface of the personal health market having merely been scratched, I would suggest this is an opportunity for early adopters.
WHAT'S GOING ON AT BOSCH?
My last full day at IFA was centred on finding out what was new for the Bosch brand and what was likely to come to New Zealand.
The crowds were drawn to the Home Connect section of the combined 550+m2 Bosch and Siemens stand but I started my tour with Darryl Robinson (BSH NZ MD & Board Member - above right) and Sarah Alexander (Product & Comms Manager) in laundry.
Laundry – News is that Bosch’s world-first i-Dos auto dosing system will be included in more NZ washing machines. Next year will also see new Series 8 washing machines with a special function called ActiveOxygen which helps to wash clothes hygienically clean, even at low temperatures.
Heat pump dryers are big for BSH and key to its premium strategy, so look out for the NZ heat pump dryer range to increase; this also means Bosch will be able to offer a matching washing machine-dryer pair. Bosch’s self-cleaning condensers remain a unique point of difference.
Cooking – The seriously in-demand Series 8 oven range may well include a black model at some stage but it’s in induction cooktops where the real action is happening.
Next year some of BSH NZ’s models will include a cool function called MoveMode, where the FlexInduction zone can be divided into three areas with different preset energy settings so you can bring a dish to the boil, keep it simmering and finally keep it warm just by sliding the pan around. Also coming is PerfectFry frying (presets the pan to the perfect temperature) and the new PerfectCook cooking sensor (a sensor attaches to the pot to prevent boil-overs).
Bosch also believes that its new freely suspended ceiling ventilators are a great fit for difficult or urban dwellings, or simply for where design takes precedence. Losing exhaust pipes for high performance integrated air recirculation filters means these flat panel hoods can be almost surface mounted onto the kitchen ceiling and still work efficiently.
Small domestic appliances – In hot beverages the Tassimo portioned system is one hot product that we almost certainly won’t see here. It’s huge in Europe but in NZ you can’t get the coffee pods (a similar issue also stymied Electrolux’s entry into the portioned coffee NZ market), which is a shame because it also makes tea and Milka hot chocolate!
At IFA Bosch was also showing its MUM5 food prep range, which may or may not be considered suitable for the New Zealand market. Great colours, cool designs and by all accounts high quality, but can they persuade Kiwis who may be looking for that traditional Kenwood-style upright?
In NZ, Bosch vacuums have been exclusive with Harvey Norman for the last year; bagged and bagless, the stick vacs have also done well – look out for more on that front.
Smart networking – Home Connect is BSH’s open source smart home/Internet of Things type system, which any brand can tap into. The new networked Bosch and Siemens appliances on show in Berlin ranged from refrigerators, washing machines and dryers, to fully automatic coffee machines.
Home Connect offers remote control of appliances via smartphone or tablet, even a “camera in the fridge” so you can see the contents of the refrigerator from the office using your smartphone and keep an eye on supplies.
Is the consumer ready for Home Connect? We already have delayed start on washing machines and dishwashers and programmed cooking so do we need it yet?
Well, imagine it’s 70 seconds from full time, your third substitute fly half is kicking for the game and you just can’t remember if there’s just one last beer in the fridge…