Whether it’s a Thermomix or a Kobold vacuum cleaner: the home appliance manufacturer is benefiting from its direct sales during the pandemic. Nevertheless, it is controversial whether the sales parties have a future in the age of online trading.
Business at the Wuppertal home appliance manufacturer Vorwerk is booming thanks to the success of the luxury kitchen appliance Thermomix and good sales figures in the vacuum cleaner business – despite the Ukraine war and the corona pandemic.
“I don’t see anything in the numbers about a falling desire to buy because of the high price increases for energy and food,” said Vorwerk boss Thomas Stoffmehl of the German Press Agency.
Overall, according to the figures presented on Tuesday, the family business increased its sales last year by 6.4 percent to 3.4 billion euros. The result has also developed positively, said the manager. And the first quarter of 2022 was even one of the best in the company’s history.
Production of bestseller currently throttled
The most important product for Vorwerk remains the Thermomix, which costs over 1,300 euros and accounts for around half of total sales. However, the group is currently struggling with delivery problems for the noble kitchen helper. “Because of a single hard-to-get component – a microcontroller – we had to throttle Thermomix production and currently have ten to eleven weeks waiting time for this device,” said the manager. But the company hopes to have overcome the bottleneck after late summer. According to Stoffmehl, Vorwerk also wants to increase the price for the Thermomix “very moderately” in the second half of the year.
The recently weakening vacuum cleaner division experienced a comeback in 2021. Here, sales increased by 16.5 percent to 819 million euros. As early as 2023, sales should reach the billion mark. Stoffmehl admitted that Vorwerk still had weak points in this area. “Currently we are not well enough positioned when it comes to vacuum cleaner robots.” The company only sold a relatively small number of the current VR300 model. “We will need another innovation here. The robot vacuum is still a niche in the vacuum cleaner market, but it’s a niche that’s becoming more important and that we need to fill.”
Stoffmehl is looking to the future with optimism. “We are also planning a record year in 2022, if the general geopolitical situation doesn’t thwart our plans.”
“People want personal advice”
In the eyes of the manager, the decisive factors for the success of the past few years are direct sales and the increased number of consultants. “Many people have advised us to get more involved in online trading. There is huge potential for Vorwerk there. That’s total nonsense, »said Stoffmehl. “People who buy our products want personal advice. They don’t want a price comparison machine, they want to know whether the Thermomix is the right solution for their personal tasks.” The consultants are irreplaceable for this. The – rather small – online business is therefore “inseparably linked to the consultant” in the company.
Not all industry experts share the assessment. The marketing expert Martin Fassnacht from the WHU business school in Düsseldorf is convinced: «Direct sales have passed their peak. Today’s consumers expect shopping to be as easy and smooth as possible, and they find that on the Internet.» Even the Thermomix will not be able to escape this trend in the long run: “People are now used to buying expensive products online.” And if you need advice on how to use the kitchen helper, you can always find it on YouTube instead of at sales parties.
In fact, not all companies specializing in direct sales are coming through the current turbulence as well as Vorwerk has been able to do so far. According to everything you hear in the industry, 2021 was probably a good year for the direct sales companies, said the managing director of the Federal Association of Direct Sales Germany (BDD), Jochen Clausnitzer. But: “The start of the current year was bumpy for many companies.” Many parties were canceled due to the high incidence of corona. And then there is the uncertainty of consumers as a result of the war in Ukraine. While a number of direct sellers are currently struggling with people’s declining desire to buy, Vorwerk may want to go on a shopping spree this year. “We are looking for a third pillar for our company alongside Thermomix and Kobold,” said Stoffmehl. “Part of our future strategy is to buy one or more established companies that round off our range of household goods.” You don’t even have to be in direct sales.
