Strategic growth segments: Innovation, online, emerging markets
In the future too, we will capitalize on innovation as a strategic growth segment for Bosch Power Tools. In the areas of batteries, sensors and connectivity of power tools in particular, we are using technical developments for new products and, thereby, creating added value for the user. For example, our ”NanoBlade” saw blade technology allows the DIY enthusiast to experience for the first time virtually vibration-free and therefore effortless and precise sawing. For tradespeople, we are offering systems such as ”Wireless Charging” for contactless charging of batteries − for increased productivity.
Online has played a significant role for us for a number of years – and its importance continues to grow. Firstly, because we are increasingly connecting our tools. Secondly, because more and more users are going online to find information about the products and to purchase them. We are continuing to invest in the digital area – and have even created a separate unit specifically for this purpose. We are pooling the digital skills of our employees, in order to best serve the needs of the user today, tomorrow and in the future.
We also continue to see great potential for the future in the emerging markets such as Africa. They are home to many first-time users of power tools. These tradespeople, first, need to be convinced that switching from a traditional hand tool to a power tool brings benefits. We are convinced that a crucial factor for success in the emerging markets is the availability of affordable products and on-site service. We therefore plan to introduce 20 new products in Africa in 2017 alone − a whole range of professional products that are affordable, durable and easy to maintain. We are also building our own sales organizations in Africa and creating a tight network of service centers in order to meet local needs.
The key to success: Innovative strength
One important key to our success is our innovative strength. In 2016, we achieved around one-third of our turnover from products that are less than two years old. It is innovations such as our “Wireless Charging” System for inductive charging of batteries, our multifunction tools with accessories that can be changed in just three seconds and our rotary hammers with sensors that reduce kick-back and can therefore minimize the risk of injury that make us stand out in the market.
Our consistent focus on the needs of the user is paying off: In 2016, we sold more than 50 million power tools. Every second, somebody, somewhere in the world, buys a Bosch power tool. Statistically, it even amounts to 1.5 power tools per second. One product guaranteeing our success now and in the future is the Ixo. Since its market launch in 2003, we have sold more than 16 million of these little cordless screwdrivers. The tool, which has earned itself a cult status, is now able to offer much more than simply driving screws: Opening wine bottles, seasoning dishes, lighting barbecues, drilling, cutting through various materials – the Ixo can do all this and more!
Another potential record holder is our Zamo range of measuring devices. Since its market launch about three years ago, we have sold more than three million of these easy-to-operate, affordable laser measures. What is the secret to its success? The Zamo meets the DIY enthusiast's desire for convenience and simple operation: The user cannot go wrong − simply press the button and the device delivers precise results. This eliminates the need for folding rules or even a second person to help measure longer distances. With the Zamo range, we have created a new market for easy-to-operate, affordable laser measures.
Connectivity with added value
Online is very important to us. We are focusing on connected products. In 2017 alone, we will introduce seven connectable professional tools to the market – ranging from the cordless screwdriver, to a worklight, through to the remote controlled combi laser. Our long-term goal is to connect all of Bosch’s professional power tools and thus to offer users an even higher level of convenience − and to increase their productivity.
DIY enthusiasts can also rely on connected products from Bosch, such as the new Indego 400 Connect robotic lawnmower, or various laser measures.
Growth with a focus on the user
Our products are so well received because they are based on ”User Experience“. Just like the team led by Marc Jost-Benz, whom you met today, we all consistently focus on the user. Any knowledge gained – from product development through to the point of sale – we feed back in. We support the user throughout: Our goal is to provide them with all the necessary information and services and to make working with Bosch power tools as easy as possible for them.
This strategy paid off again in 2016: We increased our sales to a record 4.5 billion euros. In local currency, this represents an increase of seven percent; nominally it equates to four percent. This growth is driven by all regions: In Europe, sales increased by nine percent in local currency, driven primarily by important western European markets, such as Germany, the Iberian Peninsula and the United Kingdom. North America saw a seven percent rise in revenue. Despite lower growth in Brazil and China, Power Tools also recorded an increase in turnover in emerging markets: In Latin America, the company experienced a five percent increase, while the Asia-Pacific region saw a growth of two percent. Our business performed well in India, generating a ten percent increase. On the African continent, Bosch achieved a three percent growth in revenue. In total, around 85 percent of our turnover in 2016 was generated outside Germany.
With a rise of seven percent in local currency, we have grown much faster than the market – the comparable market growth is just four percent. A similar result is reflected in the German market: We have increased sales by 12 percent. The German market has also grown, with a rise of seven percent, although this is significantly weaker than Bosch Power Tools. Evidently users like to reach for innovative tools from the Bosch brand.
This is a result of our strategy of keeping our focus on the user – in the development of our products and services as well as in sales. We are increasingly seeing a merger of the traditional sales channels. Tradespeople no longer restrict themselves to specialist retail outlets and DIY enthusiasts no longer buy exclusively from hardware stores. And besides, on the Internet, our products for both target groups have been available, side by side, for a long time. What does this mean for us? Since our users are no longer separated by individual channels, we too no longer strictly divide our product range according to those channels. Our sales depend much more on making the right offer to the customer, regardless of the sales channel.
Thus, for example, since the fall of 2016, we have been selling our professional power tools not only at specialist retail outlets, but also at hardware stores. And with success: The demand is high and the users’ feedback has been very positive. In the Germany, Austria, Switzerland sales region alone, our professional power tools are now available in more than 1,000 hardware stores. In doing this, we aim to appeal to the professional user who has purchased tools from the hardware store before. So you can see that even here, the user was a crucial factor in our decision – we offer our products wherever the user searches and buys them. Of course, this means that the specialist retailer continues to be the most important sales channel for Bosch professional power tools.
Focusing on the user – even in communication
In order to properly address the respective target group, our new brand communication focuses even more strongly on the DIY enthusiast and the tradesperson together with their needs.
In this globalized, over-stimulated world, the individual home is becoming increasingly important. It is no longer about repairing things; it is about creating an individual home, idea by idea, project by project – based on your own ideas, desires and imaginings. And above all, to do it with your own hands. We put ourselves in the shoes of the DIY enthusiast, inspire and motivate them – through construction manuals, for example, or tips and dialogue in social media. We offer our help – and, of course, the right tool for the ”Home made by you”.
The new communication for professionals is also focused on the user and their needs. ”It’s in your hands“. What do we mean by this? The professional has the expertise – we provide them with the right products and services to optimally use this expertise and, thus, to perform their tasks as efficiently as possible. We consider ourselves to be a partner to trade and industry. For us, ”User Experience” means that we combine our skills with those of the professionals, working together to achieve one goal: Optimum results and maximum productivity.
