What 2025 Holds for the Home Appliance Industry
The economy remains under pressure, and the home appliance industry is no exception. We spoke with Dr. Martin Schulte, Senior Partner at strategy consultancy Oliver Wyman and a global expert in consumer electronics and home appliances, about the outlook for 2025. In our conversation, he explores whether this year could mark a turning point out of the crisis, what opportunities lie ahead, and how companies should position themselves now.
GFU: What do you think the growth prospects are for home appliances and related sectors in 2025?
Martin Schulte | Oliver Wyman: We are forecasting modest growth this year. The real estate sector, an important one for the industry, has shrunk considerably in Germany in 2024 – to just over 200,000 units. I don’t expect that to change in the short term, mainly due to inflation and rising living costs. The replacement and upgrade business also remains highly competitive, with heavy discounts and aggressive promotions.
GFU: Is there any silver lining?
Martin Schulte: Definitely, first signs of recovery are visible. The ECB has already lowered the interest rate to below 3%, and we are seeing prices stabilize. In addition, the outcome of the federal elections in Germany at the end of February could bring positive momentum for the sector in the second half of the year.
GFU: How should businesses respond to this challenging market situation?
Martin Schulte: In such an environment, companies tend to hold back on investments, take a short-term view of their business and focus on efficiency and cost reduction. Many companies and CEOs are either in an expansive or restrictive management mode, hoping for better times with more sales growth and more optimistic consumer sentiment. What is often overlooked is that even in a stagnating market, there is potential for growth if you analyze it carefully and don’t settle for mediocrity. Those who recognize and actively exploit these opportunities can benefit from fundamental changes.
GFU: Can you give us an example?
Martin Schulte: Of course. For example, the shift towards the core of the market. After the price declines in the past two years, we are now seeing growth in the mid-price segment. Manufacturers should be aware of this structural change and adjust their portfolio accordingly. It can make sense to deploy resources for innovation and research in a more targeted way – not only for premium products, but also for the broader, more affordable segments, which are becoming more and more important.
GFU: What other strategies do you see that companies can use to grow successfully?
Martin Schulte: One major opportunity lies in creatively engaging consumers. Some brands are currently leading the way: they are using social media, testimonials, agile and consumer-oriented communication – and achieving growth rates of over 20% even in established markets like Europe. Those who jump on this bandwagon early will benefit from this trend.
GFU: Creative ways of engaging with consumers – does that also have an impact on sales channels?
Martin Schulte: I would like to mention a development in the kitchen sector: small, digital kitchen studios in city centers offer a comprehensive planning experience, supported by new technologies. They come to where the consumers are, so they no longer must drive “out” to the furniture store. There are already real examples of this concept, and it is likely that other providers will follow. Those who get in early can win new customers here.
GFU: Everyone is currently speaking of robotics: What opportunities do you see in this field?
Martin Schulte: A revolution is just around the corner in this sector. Alongside progress in generative AI, physical AI is also developing rapidly. Large US tech companies have invested over 14 billion US dollars in this area in 2024 alone. Particularly exciting: the prices for humanoid robots will soon fall below 15,000 US dollars. This opens completely new revenue opportunities for companies willing to invest in this emerging ecosystem. Europe may not currently be a leader in hardware, which comes from Asia and the US. But there are opportunities here, for example, in software development, language models or the like.
GFU: All in all, does the well-known motto “turning crisis into opportunity” hold true?
Martin Schulte: It can happen that you become sluggish in a difficult market environment – with the consequence of missing out on trends in the respective sector that actually offer enormous opportunities for new things. Those who seize these opportunities and set the right course now can lay the foundations for commercial success in the years to come.
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Based on a partnership between Oliver Wyman and gfu that has existed since 2021, we regularly commission studies to provide information on market developments and trends in Home & Consumer Tech.