Comment: AMEDA Selling sustainability
Paul Hide, chief executive, AMDEA, details his organisation’s latest work, including its award- winning Know Watt’s What campaign
W
e’ve all done it; an appliance goes on the blink, we could get it fixed, but
hey, it’s provided good reliable service over the years and wasn’t particularly expensive. Let’s save ourselves the hassle of arranging a repair by purchasing a new model and having the current appliance picked up and taken to the recycling centre. This scenario plays out hundreds of times a
day across the land and is one of the drivers for a market that, in the UK alone, places over 12 million new large appliances every year onto the market, delivering £6 billion-plus in annual retail revenues. But is this sustainable, or are we approaching a tipping point in our business models where extended product life, through increased levels of maintenance and repair, will start to balance the appliance economy to a more equal split between replacement and repair? All industries are under increasing pressure to
reduce the overall environmental impact of the full lifecycle of goods and services they provide. It is increasingly hard to argue that there is not an increasing need for us to support a more circular economy and this includes keeping appliances in the market for longer. A shift that risks reducing overall volumes of new appliance sales will be feared by many. Businesses tend to focus on year-on-year revenue growth and are driven to grow the overall size of the market. The alternative view is to accept a shift over time to a different mix of market opportunities, a more balanced portfolio of income from goods and services between new product sales, and let’s be honest these opportunities will still be plentiful, and a growing market for services relating to maintenance, the supply of parts and chargeable repairs. These ‘post sales’ revenue streams can be
more margin rich than selling new products and there are already many industries where post sales revenue and margins for channel partners outstrip those of new sales, the motor car industry being perhaps the most obvious example. AMDEA and our members are working hard to support increased appliance owner information
July/August 2023
of new engineers coming through recognised training and apprenticeship programs. Suitable training modules exist with some
and choice when it comes to a decision between repair or replacement. Many manufacturers now offer fixed price
servicing and repair for peace of mind – Domestic & General offers monthly care plans that offer an upfront known cost, which supports extended appliance life. The next phase of AMDEA’s award-winning
Know Watt’s What campaign focuses on household education through the launch of our unique ‘Repairs and Spares’ portal offering householders instant access to genuine spare parts, expert repairs and advice from 68 of the UK’s leading appliance brands. A new ‘Enduring Care’ web section highlights
maintenance tips for each appliance category to help homes secure best performance for longer. We are convinced that the demand for
maintenance and repair services will grow, providing an additional revenue stream for those than can meet these demands. Such support is ideally delivered locally so well matched for local independent businesses working in partnership with manufacturers.
One challenge will be addressing the shortage
of skilled appliance service technicians, especially as we are facing an aging workforce moving towards either full or partial retirement and a lack
eligible for funding via the apprenticeship levy, what we need is more employers to take on service technician apprentices. AMDEA is pressing Government to help encourage increased repair through lower levels of VAT on repair charges and spare parts. This form of incentive, introduced in some Scandinavian markets, is helping drive up the demand for repair over replacement. Extending lifespans also reduces the huge amount of electrical waste collected and recycled every year. Over 470,000 tonnes (circa 300,000 tonnes of this is large appliances) of household electrical waste is expected to be collected from UK households in 2023 alone and we can expect increasing pressure from regulators and environmental campaign groups for us to collectively demonstrate actions that will reduce the amount of electrical waste generated, especially unrecyclable waste. Sustainability will never be a binary choice
between repair or replace. What will evolve over time are increased circular economy activities, some of which will link to extending appliance life, partially through secondary and tertiary movement from one household to another and partially through an increasing percentage of industry revenues balanced between new appliance sales and revenue generated from servicing and repair. For more information on AMDEA’s Know
Watt’s What campaign, go to: https://www.
amdea.org.uk/campaigns/know-watts-what/. AMDEA’s publication on ‘Appliances and
the drive to net zero homes’ can be accessed here:
https://www.amdea.org.uk/wp-content/ uploads/2023/07/AMDEA-the-drive-for-net- zero-homes.pdf. To hear more about how the appliance
industry is supporting increased sustainability the drive to net zero homes, register for a free place at our annual industry conference: 2050 Appliances, to be held in London on September 21.
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