‘We’ve had a rockin’ year with independents’
Beko is enjoying great success in the independent retail channel, has grown its Grundig brand through kitchen specialists and recently launched its first range of small appliances. ‘I feel lucky to be part of it,’ managing director Teresa Arbuckle tells Sean Hannam
When kbbreview sits down to talk to Teresa Arbuckle at Beko UK’s headquarters in Watford, it’s almost exactly two years to the day since she took over as managing director of the home appliance company.
“It’s been a real opportunity, but it’s had its challenges,” she says. “Particularly 2015, which was really tough. Price deflation in the market was really strong and there were a lot of aggressive competitors.
“We’ve kept focusing on doing what we do best and trying to align all of our product innovation with how we talk to our customers – we still believe our retail customers are the most important people in the business. Equally, we’re talking to our consumers about what really matters to them.”
Prior to becoming MD of Beko, Arbuckle was the company’s marketing director – she joined in September 2011.
“I feel lucky to have been a part of it,” she says. “I’ve been with the company for five years and when I first got here, there was a heavy emphasis on Beko as the key brand.
“Now I’m working for a multi-brand company, with Blomberg, Leisure, Grundig, Beko and Flavel, and we’re moving into SDA. We’re a company that’s really on the move and hopefully will continue to be successful in the future. SDA is our next big thing.”
Q: How has business been for Beko over the past 12 months?
A: We had a fantastic year in 2016 – it was a record-breaking year in both volume and value. GfK – January to December 2016 – puts us at 16%, which is the number one position in volume, and we were number one in value for the first time ever, with a 12.3% market share. We were also number one in freestanding and built-in.
Q: What do you put that success down to?
A: We’ve had a really good focus on built-in and great customer relationships – particularly the independents. We had a rockin’ year!
Q: Has there been a strategy to move Beko more into the mid-sector?
A: Beko is a mass brand – it serves a lot of different people. If you look at Tesco, it has Tesco Finest and Tesco Value – people don’t have a problem with that. If you do the marketing well and you define the products well, you can serve consumers who are on a tight budget, looking for real value for money. You can also serve customers who are looking for a great product that’s filled with fantastic features – things like American-style side-by-side fridges, beautiful multifunction ovens and great eco dishwashers.
Q: You’ve partnered with distributor JPD to offer Grundig built-in to kitchen studios…
A: We have a fantastic relationship with Tony Oates [managing director] of JPD. He’s such a believer in our Grundig premium brand proposition. He and his team, working alongside us, have focused on Grundig displays in local independent kitchen specialists. I think about 95 to 100 of them have a Grundig display, which is starting to be significant coverage. They are able to talk about the product range – how beautiful it is, the design aesthetics and the build quality. It’s not something that happens overnight – it’s not a volume driver. It’s about winning over hearts and minds with really beautiful, quality, design-led appliances. We’re really pleased about our relationship with JPD. Grundig was up 40% versus last year and with its distribution through JPD we were up 1,000% – we went from nothing to having a business base.
Q: With Brexit on the horizon, what’s your take on how it will affect the market?
A: We don’t know how Brexit is going to impact – it’s difficult to face that uncertainty. Just the sheer fact of the foreign exchange rate has meant a difficult situation for many manufacturers.
We’re looking at budgets that are different based on foreign currency – it means that 2017 will be a period of adjustment and I think we will hopefully see the value coming back into the market and people seeing the products at the value that they need to be. It may cause an erosion of consumer confidence, which is the biggest worry for any manufacturer or retailer – nobody wants consumers to be worried about their next purchase.
What’s brilliant – and shows the resilience of the British public and the appliance industry – is that we’re making sure people know why they should keep buying appliances and not hold off redoing their kitchens. There’s a healthy amount of consumer communication that keeps the market turning and continuing to deliver.
The appliance market has grown up and is more active than it was five years ago. It’s not a list of features that gets the consumer excited – it’s about what the appliance gives them and how it changes their life. A 9kg washing machine means nothing, but if it means you don’t have to do laundry on a Saturday morning and you can spend the whole day with your kids, that’s a big difference. We’re trying to recalibrate appliances so people can see them as the time-savers – and life-savers – that they are.
There’s still a lot of catching up to do. A lot of consumers are stuck in the 1990s. It’s not their fault – they don’t buy appliances that often – but we need to continually try to educate them on how much more energy-efficient appliances are. We need to make sure people understand just how good appliances are today – forget connected, that will come along.
Q: Does Beko have a strategy in place for smart home appliances?
A: Our group has a vested interest in making sure that we’re at the forefront of connected technology. We’ve been doing research on it for over two years.
There’s still a lot of work to be done on what are the proper USPs for the consumer – they still have to put some laundry in the washing machine and stick the chicken in the oven.
It all boils down to, is it worth doubling the price of a product in order for someone to see how many hours their washing machine was on and how much detergent it used compared with last year?
It’s balancing the cost associated with putting in connected technology versus the benefit to the consumer. This year, we’re going to be doing some connected appliance trials. We’ll have 10 Grundig products out in the field with an independent test house and with consumers. We’re going to learn a lot more about how we best introduce the right products to market with Beko or any of our brands.