Is the launching time right for Samsung Bespoke New Design?!

The home appliance industry, both globally and in North America, is experiencing a significant decline in demand and pricing due to a confluence of factors that have reshaped the market landscape.

Deferred Demand During the COVID-19 Pandemic

During the COVID-19 pandemic, particularly from 2020 to 2022, the home appliance market witnessed an unusual surge in demand. Consumers, confined to their homes, invested heavily in home improvements and new appliances. This led to a significant pull-forward of demand that would typically have been spread out over the years 2024 to 2027. As a result, the market is now experiencing a lull as the demand that was brought forward during the pandemic period has been satisfied.

Shifts in Market Dynamics

The market dynamics have also shifted with the diminishing power of European home appliance companies and the rise of Chinese and Turkish firms. Brands such as Haier, Midea, Hisense, and TCL from China, along with Arçelik from Turkey (which acquired Whirlpool Europe), have been expanding their global footprint. These companies have leveraged their robust supply chains and competitive pricing to capture significant market share.

Impact of Geopolitical Events

Geopolitical events, notably the ongoing conflict between Russia and Ukraine, have further strained the global home appliance market. These tensions have exacerbated supply chain issues and increased raw material costs, contributing to price instability and further dampening demand.

Economic Challenges: Inflation and Recession

The global economy is grappling with high inflation and the threat of recession. Rising costs of food, gas, and other essentials have squeezed consumer budgets, leading to reduced discretionary spending on home appliances. The high inflation environment has forced many consumers to delay or forego purchases of new appliances, contributing to the overall decline in market demand.

Aggressive Discounting

In response to these challenges, appliance manufacturers and retailers have resorted to aggressive discounting to stimulate demand. Discounts ranging from 30% to 50% have become common as companies attempt to clear excess inventory and attract price-sensitive consumers. While these discounts have mitigated the decline in unit sales a bit, they have also led to significant price erosion, impacting overall revenue and profitability in the sector.

What is Samsung Doing with New Bespoke Panel Customization launch?

Samsung re-launched recently its new bespoke fridge panels customization where now you can add your own photos on the fridge or any other design and Samsung will deliver it for the cost of 250 USD Per Panel. Yes per panel, and what is more exciting is that they have discounts from 30-40% on these fridges so that several model prices are equal or below 2000 USD.

So if we take the model below being sold at 1599 USD, I will need to pay between 250-500 USD (around 16-31%) of the appliance price additionally to imprint my memories on the fridge from Samsung.

Don't get me wrong, there is definitely a market for this for products over 3000 USD where the price is below 15% of appliance price, yet the question raises itself below.

Is this the right timing during the discounting season?!!

One man's opinion is that this high skimming price will allow for less losses on the discounts and higher margin from their accessories and consumables business.

Another man's opinion is that this is the right time to test this market condition because if a reasonable demand exists now, it means with higher probability, bigger market size when the economics and market condition improve.

I believe that trying to expand the business using the Razor & Blades model with the accessories is a smart idea, but for the moment, it is a niche in North America & Korea, for the rest of the market, it must be stress tested.

Would you pay the extra amount to save your cherished memories, or would you spend fairly a bit less on magnetic photo albums on the fridge ?!

Let me know your thoughts in the comments 👇

BESPOKE Designs Launched in 2023