Electrolux 2015 Annual Report Download - page 28

Innovation
All product development in the Group is based on in-depth
consumer insight. By performing an extensive number of
interviews and home visits, Electrolux gains knowledge of
consumer behavior in the use of various household appli-
ances and the needs that exist. Based on this information,
Electrolux can develop solutions that facilitate the everyday
lives of consumers. The Group also leverages its specialist
culinary expertise to create yet more innovative products for
food preparation and preservation. Key to the above efforts
is the transfer of know-how and experience from the Group's
professional business to the development of new consumer
products. Innovation efforts focus on a number of areas
aimed at contributing to the culinary experience, a simpler
and healthier lifestyle and resource-efficient solutions for
the home.
Accelerated product development
The process for consumer-driven product development is
used for all new products. Close collaboration between the
Group’s marketing, R&D and design functions increases
consumer insight and market knowledge, thereby enabling
products to reach the market quicker and ensuring that these
products are preferred by more consumers.
Each business area in the Group has teams working with
these functions. The process also facilitates sales via new
channels, establishment in new markets and ventures into
entirely new product categories. In order for a new product
to be launched, at least % of the consumers in a test group
must have expressed a preference for the product over sim-
ilar alternatives in the market. If this requirement is not met,
the product is sent back to the product development team
to be reworked.
More research and development
Over the past number of years, Electrolux has gradually
increased investment in R&D, which has led to further
improvement in product quality and has reduced costs for
warranty spend. Also in recent years, warranty costs have
decreased significantly, essentially by an amount corre-
sponding to the increase in R&D costs, and the sum of these
two cost items for the entire period was about % of net sales.
The aim is to continue this trend. The increased investment in
new technology is focused on the development of intuitive
and user-friendly control panels, solutions with less environ-
mental impact and new technology that allows appliances
to be controlled and connected remotely via the internet.
Sustainability
The most significant environmental impact for the Group is
energy and water consumption during the usage of prod-
ucts. Accordingly, Electrolux places great importance on
increased product efficiency, and sustainability is one of four
prioritized areas in product development. At least one-third
of the product development spend is environment-related
and includes energy and water efficiency. Material effi-
ciency is growing in importance. Electrolux has successfully
introduced recycled material in vacuum cleaners and other
household appliances.
A Green Range performance indicator for the most
efficient products in core markets enables comparability of
environmentally leading products against the total range. A
key approach to meeting increasing demand for energy and
cost-efficient household appliances from a growing middle
class in emerging markets is to rapidly transfer the results of
innovations from the premium to the mass-market segment.
The Electrolux process for consumer-driven product development enables
accelerated development of products that are preferred by increasing numbers of
consumers. The collaboration between marketing, R&D and design is a key factor.
–
30%+ 50%
<
5%
Reduce the time
from innovation to
launch by 30%
Increase investment
in innovation by 50%
Best-in-class quality
in service call rate
Goals
 ELECTROLUX ANNUAL REPORT 2015
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