Samsung looks to tap into millennial customers with personalized devices

After a boom in sales of refrigerators and cleaners during COVID-19, the home appliances business of Samsung Electronics, the South Korean multinational conglomerate, is looking ahead to the post-pandemic era by focusing on offering personalized devices to younger customers.

The electronic giant’s home appliance business, which accounts for almost 10 percent of total revenue, should report a 10 percent increase in sales for 2020, Jaeseung Lee, president and head of digital appliances business, said. Demand will continue through the first six months of this year but sales will start to weaken in the second half once the economic effect of subsidies wane and people start getting back to normal life after vaccines roll out, according to Mr. Lee.

“We are drawing up contingency plans as we expect a sales slowdown in the second half,” he said. “There will be another new battle for market share. We will aggressively carry out new product sales for the second half and overcome challenges by providing differentiated products.”

Thanks to stay-at-home demand, the world’s largest memory chip and electronics maker has benefited from strong sales of semiconductors that go into everything from PCs and TVs to data centers as well as digital appliances. Samsung’s home appliance business initially suffered from plant closures when COVID-19 spread to Europe and the US last year but the company swiftly adjusted its global supply chain to meet increased demand for larger fridges to store food and for vacuum cleaners and washing machines.

Millennial customers

Looking beyond the post-COVID-19 era, Samsung plans to target millennial customers who shop online and prefer personalized designs, Mr. Lee said. Online sales rose 50 percent globally in the third quarter, while personalized refrigerators that can be customized according to size, material and color, specialty fridges for kimchi are a popular option, accounted for more than 67 percent of the Korean market last year.

“Customers had few options among products made by a traditional manufacturing system,” said Mr. Lee. “Our way of manufacturing has to be changed for the personalization of appliances. And that’s a big transition.”

While the shift to order-based production will increase costs, the company is betting that the strategy will create sales opportunities, Mr. Lee said. Samsung, whose Bespoke lineup also includes wine coolers and dishwashers, is seeking to open up its production ecosystem to suppliers and furniture studios so that clients can have more design options. It plans to start sales of Bespoke fridges in the US, Middle East and Europe this year.

AI-based appliances

The division is also pushing software customization that will enable its home appliances to offer AI (artificial intelligence) based solutions to users. While the company’s own Bixby voice assistant is here to stay, Mr. Lee said Samsung is open to working with tech giants like Amazon and Google to connect their rival systems to its gadgets.

With demand for sterilization and hygiene capabilities on digital appliances rising, Samsung is considering making built-in water purifiers as well as a new version of its Air Dresser closet for shoes, while strengthening the sterilization features in its air purifiers. At an online event for the CES consumer technology show this week, the company will also unveil a new robot vacuum cleaner, called JetBot 90 AI+, with three cameras with LiDAR and 3D sensors that will go on sale globally in the first half of this year.