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Euronics’ president on household appliance retail trends and the right to repair

16 Jun 2023 |

Hans Carpels, president of Euronics and chairman of the European Consumer Electronics Retail Council (EuCER), talks post-COVID trends and repairability

In an exclusive interview with IFA News, Hans Carpels, the president of Euronics, Europe’s largest electrical buying group, speaks about the impact of the COVID-19 pandemic, current challenges for home appliances retailers, Euronic’s growth strategy, IFA, and the the European Commission’s new “right to repair” legislation.

Listen to the full interview on the IFA TechTalk Podcast #15

Making the best of the pandemic

When asked about the impact of the Covid-19 pandemic on home appliances and electronics retailers, Carpels praised Euronics’s ability to adapt.

“We have [gone through] events that no one in our lifetime has encountered, so we had to adapt and at Euronics we made the best of it,” he said.

Euronics adjusted to the pandemic’s successive lockdowns by offering new ways for consumers to purchase appliances. “Some of our competitors went to online mode while we decided to use our stores as a click and collect element in which we were hugely successful. In many countries we even did a drive through so that the consumer did not have to get out of their cars,” he added

New challenges and impact on consumer decisions

When commenting on coming out of the pandemic, Carpels spoke of a new set of challenges facing the industry. “Let us not forget, when Covid went more into the background, we suddenly had a geopolitical crisis on our hands, sanctions, energy prices soaring, and inflation going up,” he stated.

“[This situation] makes the consumer very doubtful and insecure and when a consumer gets insecure, there is a clear consequence of that which is they focus on ‘first price’ products, so no frills – just needing to be served in the cheapest way possible,” he added.

Despite this tendency, according to Carpels, there are also consumers who will look to buy top quality. “People who are insecure will look for security and they will buy the best possible gear because they are afraid of having to invest twice if the product is not good.”

“[During IFA], in a span of five days, I have nearly 60 meetings, so it is a tough schedule, but it is something you cannot do anywhere else and it is super productive. You see all the new trends, products and launches and you can compare and discuss with manufacturers and let’s not forget, you are preparing the last quarter of the year, so it is an ideal period and an ideal setting.”

 

Small appliances and smartphones hold their ground

Carpels mentioned the challenges of inflation and price declines for retailers in Western Europe with consumer electronics such as TVs seeing a price decline of some 15% as well as IT. ” IT and TV together account for at least 50% of the market so it’s not an easy period definitely in Western Europe,” he added.

However, he maintained that small appliances and telecom are standing fast. “Small domestic appliances are picking up quite well although they had a boom in the Covid period because kitchen appliances went through the roof, and they are still doing well, and on the other hand telecom and smartphones are doing quite well,” he asserted.

Thanks to the fact that Euronics has a broad geographical presence, it has been less hard hit by the more demanding scenario facing Western Europe. “Euronics is saved by its “spread.” We are quite strong in Eastern Europe and also in Turkey and the Gulf region, so we came out of 2023 with progress,” he confirmed.

Growing profitability

About Euronics short and long term priorities, Carpels cited recent strategic decisions. “We have a clear objective to reach 27 billion in 2026, so that is a 4% average growth rate per year, and of course we want to grow profitably.” To do this, Euronics will focus on evolving some of its existing strengths. “We want to step up our game in online even more. We are quite well established there, but that still needs to be improved in some countries. And of course we will focus on added value categories,” he said.

IFA: A unique opportunity

With respect to IFA Berlin, Carpels was categorical about the advantages of attending the show. “In a span of five days, I have nearly 60 meetings, so it is a tough schedule, but it is something you cannot do anywhere else and it is super productive,” he said. “You see all the new trends, products and launches and you can compare and discuss with manufacturers and let’s not forget, you are preparing the last quarter of the year, so it is an ideal period and an ideal setting.”

“Right to Repair”

Regarding the new European legislation to promote easier and more attractive repairs of home appliances, Carpels was somewhat sceptical. “We are trying to explain to the European Commission that to dream that a consumer will repair a product is perhaps valid for less than 1% of consumers. Consumers do not have the knowledge or the ability and will not do it,” he claimed.

Nevertheless, Carpels says the industry is behind the European Commision’s (EC) objective. “Where we are fully behind the EC is that we should focus on re-using and re-using means repair.” At the same time, repairs are also linked to inventory, the cost of wages, and ultimately the cost of repairs,” he argued.

“There should be an incentive from the EC. If there are €800 billion provided for the green transition there should be support for these repairs to make them cheaper,” he continued. “If you want to repair a product and it costs €60 plus the spare parts … then every product below a €200 sales price will not be repaired.”

Concerning the impact on retailers of the prolongation of guarantees, the chairman of EuCER said, “We are totally in line with it because we have observed that the prolongation of the guarantee period from one year to two years has had a dramatic effect on the repair capabilities of retailers’ service departments because if the supplier has to take over all the repairs during the first two years, the retailer does not have to focus on that anymore.”

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