How was 2019 for Kärcher? What were the highlights? What were the challenges?
One of the biggest highlights of the year was the opening of our new Oceania headquarters in Mount Waverley, Melbourne. This project saw the closure and relocation of two existing Melbourne facilities into the one new site.
We are very proud of our new facility which has created an inclusive space for our customers. We have a Kärcher Center, Service Center and Training Academy designed to provide solutions and service training to our staff, dealers and service partners.
We continued to focus on recruiting the best people and this is starting to show in both culture and results. Our new product pipeline remains strong, and we launched more than 50 new products across both retail and professional in 2019.
We also continued to invest and improve in our marketing execution across both retail and professional. Key highlights included the partnership with the AFL Record, the MCG as its official cleaning partner and a significant investment in our digital marketing strategy.
We also saw continued sales growth. Highlights included the launch of our cordless floor cleaners (FC3 and FC5), and we also reported a very strong year in vehicle wash solutions, which included the opening of Australia’s first Kärcher Clean Park in Acacia Ridge (Queensland).
One of the key challenges we have faced this year, as with any importer, is the rising cost of goods driven by the deterioration of currency throughout the year. We have been focused on improving our efficiency through process improvement and digitalisation, to not only offset some of these increases but to set us up for future growth.
What will be the immediate focus for Kärcher in 2020?
We are seeing strong growth in our floorcare business, driven by new marketing initiatives, new products, a focus on rental and new national partnerships. As we move into 2020, we expect this to accelerate, supported by our national infrastructure around sales and service.
Our service business is a key focus for 2020. It is the backbone of a strong professional business. We have the infrastructure and investment in place and need to remain focused on providing best in class service and back up support for our customers.
We also have a new director of service starting with us from January from Kärcher UK. She has significant global experience and will be a huge asset to our team.
Our focus is on working closely with our strategic partners and making sure we provide genuine value as consultants. We see ourselves as ‘providing solutions’ rather than merely ‘selling products’. While our innovative products will be part of the solution, the value we can bring is far broader than this.
What challenges and opportunities do you see for Kärcher in 2020?
One thing we do not suffer from in Kärcher is a lack of opportunities. Given the broad range of solutions we provide, and markets we serve, it is really a matter of prioritisation for us. Our goal is to build very strong partnerships with our key customers and provide them the full solution.
As an example, we have an ongoing opportunity to grow together with our national distribution partners by extending into new product categories. We will launch a campaign for our tub vacuum cleaners starting this month.
We also have a number of exciting new products coming out over the next couple of months. We will launch a new range of petrol pressure washers, H-class safety vacuum cleaners and new sweepers and scrubbers in our classic range. These products will help us achieve our strategic plans in 2020.
Like every year, there will no doubt be challenges. We expect continued negative impacts from currency, and we also face global and local economic uncertainty. The droughts for example, continue to place huge pressure on the agricultural sector in several regions, all which have a flow on effect. That aside, we are extremely positive about the outlook for 2020.
What will be the big trends of 2020?
One of the trends will certainly be a continued shift towards battery technology. We have seen a huge uplift in sales of our battery-operated vacuums over the last couple of months and this is only the beginning.
The technology continues to grow as cleaning operators require increased access without the limitations of electrical cords. Our range of battery products continues to grow and 2020 will see a number of new products on our platform.
Another big trend is digitalisation, more online-based tools and solutions will improve cleaning efficiency and provide transparency for end customers.
Kärcher Australia has partnered with customers to implement our fleet tracking system for their cleaning machines and will continue to do so.In Europe, Kärcher recently acquired SQ ONE, which provides an app suite for a cleaning business’ entire value chain. Whilst the full solution is not available yet in Australia, we will start working on a plan to launch this here next year.
And of course, robotics remains a key talking point. While we are still in the early phase here, I expect demand for robotics to increase. I also expect the quality and return on investment to improve as the technology gets better.
What key issues should the industry be discussing in 2020?
One of the key discussion points for the industry should be on how cleaning companies best implement new technologies and digital solutions as they become available.
Our industry needs to ensure new digital tools and automated cleaning machines add value to their business and the client. While not always easy, early adoption of these technologies is crucial to keep up with the play.
In our industry, as with others, anything that can be automated will be automated over time. We should not think of these technologies as a way to compete on price, but to move the discussion towards quality and value.
Effective use of new technology will allow reallocation of resources to drive better outcomes for the cleaning companies and their clients.
What is one issue the industry should urgently address in 2020?
Health, safety and fair treatment of all employees within the sector. The cleaning industry remains, and will always be, an industry driven by people. So many of the workers in our industry work unseen and unheard, and as such are vulnerable to unfair or unsafe practices. It is up to all of us in the industry to ensure we contribute to positive change.
How do you see the cleaning landscape evolving into 2020?
As environmental issues and awareness increases, sustainability will be a key topic and we expect to see this impact on decision makers in cleaning tenders.
After-sales and service contracts are increasing. We are encountering more cleaning companies who value service contracts. This allows our customers to extend the lifetime of equipment and manage costs in a more effective way.
We are also experiencing increased interest in rental, with full-service models instead of purchasing machinery increasingly being opted for. This move away from Capex to Opex is something we expect to increase.
Is there one key message you would like to share with the industry?
Thank Your Cleaner Day is an initiative that is extremely important to me. We celebrated the fifth Thank Your Cleaner Day in 2019 and it has now become a global event with more than 20 countries participating.
I believe this initiative directly relates to the key issues around health, safety and fair treatment of all employees in the industry. We hope to increase participation from Australian and global companies and create more awareness to the general public.
My aim is to make it a truly national event that appreciates cleaners across multiple industries. I would like to encourage everyone to take part and make it an even bigger success again this year.
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