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Appliance Manufacturers Show How to Let Disruption Drive Development


By Jennifer Tuohy

Traditionally, incumbent industries are the last to catch on to truly game-changing innovations. Reasons for this are varied, but broadly, a reluctance to risk changing a tried-and-true business model comes into play. Witness the crumbling of the newspaper industry under the onslaught of the internet, how film manufacturers lost sight of the big picture in the digital photography revolution, and the decimation hotel and taxi services are facing with the advent of crowd-sourcing services.

Arguably the biggest mistake each of these industries made was to view the oncoming disruptive force as a battle and not as opportunity. Whether any of these incumbents could have been saved by a more rapid pivot is a discussion for the history books (or history e-books, as the case may be). But the biggest takeaway from the floundering of the aforementioned industries is that incumbents can no longer rely on consumer loyalty -- the consumer will get what he or she needs, regardless of the delivery method.

This fate could well have befallen the home appliance industry with the advent of global warming. The push for energy efficiency, which began in the 70s and blossomed in the 90s with the introduction of the Energy Star program, was truly a pivot point for that industry. Left to their own devices, many of the industry's incumbents may well have collapsed by ignoring consumer desires for reduced energy costs and enhanced efforts to protect the planet (and their wallets). However, thanks to a sizable financial push from government, courtesy of the Energy Star program, appliance manufacturers not only survived the seismic shift, they have thrived from it.

Of course, not every business has the benefit of an influx of tax-payer cash to steady them on the road to innovation and development, but the story of the pivot of the home appliance industry from a primary contributor to global warming to leader in the fight for energy efficiency holds a valuable lesson for any business seeking to align its bottom line with the sustainability of the planet.

Throughout the business world, the shift toward long-term sustainability of the planet has forced many companies to 'pivot' -- re-focus their core business to embrace changing consumer habits. From the automotive industry to home appliance manufacturers, many businesses had to go back to the drawing board.

Voluntary Energy Star guidelines introduced over 20 years ago pushed big names like Whirlpool, Samsung, Bosch and GE to rethink their products essentially from the ground up. Washing machines went from spewing water like Niagara Falls to using  a trickling mountain stream. Refrigerators transformed from chemical-laden, energy-leaking, hulking boxes into streamlined, energy-efficient machines consuming a third less energy than their predecessors. Case in point, Bosch claims that as a result of its development and innovation it has cut appliance water consumption by more than half since the 90s.

But Energy Star was essentially an economics lesson for environmentalists. It helped lower the cost of production so that consumers could more easily afford energy efficient products. By applying the label to their products, manufacturers made their products more attractive to consumers: a win-win.

2014 is arguably the first year the consumer is seeing the true benefit of this pivot. Appliance manufacturers are moving beyond the basics of energy efficiency and water savings to produce truly game-changing appliances that are both energy efficient and really, really good at what they do. (One of the primary concerns for consumers when it comes to purchasing "green" alternatives to traditional products is whether it will work as well as the "non-green" version).

Here are a few examples of the ways home appliances manufacturers have turned the disruption of the green movement into the seed for development and innovation:

This year Samsung debuted its water-reducing "WaterWall Technology" for the dishwasher, which uses vertical jets to create a wall of water 35 percent stronger than normal rotary systems. Samsung also introduced the highest capacity high efficiency washing machine to the market: The WA9000 boasts 5.6 cu. ft. capacity and claims to turn laundry day into laundry hour adding up to impressive savings on water and energy. Plus it's a top-loading model, a response to consumer concerns about adapting to front-loading machines.

LG has pioneered a feature on its refrigerators that increases energy efficiency while helping households run more smoothly. The door-in-door idea was dreamed up by LG in 2012, but hit the mainstream at the end of last year. The concept saves energy by incorporating a storage compartment into the door that can be accessed without opening the whole fridge, helping keep the main fridge at a consistent temperature, saving energy and keeping food fresher for longer for at least half of the 20 to 50 times a day a family of four opens the fridge.

Whirlpool introduced the first ever Energy Star certified clothes dryer this year. The Whirlpool Duet uses 20 percent less energy than required by the minimum efficiency standards coming in 2015, courtesy of advanced moisture sensors that read incoming and outgoing air temperature and monitor moisture levels inside the dryer, helping the cycle end when everything is perfectly dry, saving time and energy and preventing over-drying.

By combining the consumer push for energy savings with its huge depth of knowledge of consumer needs, the home appliance industry successfully straddled a potentially devastating disruption to its business model. How has your business pivoted to embrace sustainability without compromising your product?

Jennifer Tuohy writes about green-home technologies for Home Depot. She provides tips to homeowners on how they can improve their home's energy efficiency with large appliances, ranging from washers to dryers to refrigerators. Home Depot's selection of refrigerators, including models discussed by Jennifer, can be found on its website.

[Image credit: Linda N., Flickr cc]

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