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The secret cost of laundry


September 3, 2014 BIT Staff

Purchasing a laundry appliance, such as a washing machine, can be a complicated choice involving lots of different factors. However, consumers may be surprised to find out that the cost of using the appliance is not one of the factors often taken into account. Annual energy consumption, which relates to the appliance’s efficiency, incurs continual costs to households. Without taking into account the energy efficiency of an appliance, consumers may inadvertently be buying more than they bargained for.

To address this issue and make energy efficiency more relevant to consumers, the Behavioural Insights Team (BIT) and the UK Department of Energy and Climate Change (DECC) conducted a randomised controlled trial with British retailer John Lewis to test new information on labels for washing machines, washer dryers, and tumble dryers. Alongside the standard EU mandated energy rating labels, separate labels displayed the average lifetime running cost for each appliance. The aim of the trial was to test whether providing this information at the point of sale changed purchasing behaviour, resulting in consumers buying appliances that use less energy.

The theory is that this monetary calculation would make the energy use more transparent and salient for consumers. This trial was based on lessons from a similar trial in Norway that was conducted by GreeNudge (http://www.greenudge.no/en/) that tested lifetime electricity running costs on fridge freezers and tumble dryers. Our UK trial began in 2013 and ran for 6 months across 38 John Lewis stores in the UK; half were control and half received the new information on the labels.

The trial provided robust evidence for the use of lifetime running costs, specifically with washer dryers. The washer dryers sold in intervention stores consumed an average of 6.64 kwh/year less energy than the appliances sold in control stores. When looking at this effect by town centre and non-town centre stores, the effect was greater in non-town centre stores – 15.26 kWh/year reduction. However, the label did not have a significant effect for tumble dryers or washing machines.

Focus groups with John Lewis Partners provided useful insights into the perceived impact of the new information on customers’ purchasing decisions. A number of lessons learned emerged, particularly around how the information is presented, which have been helpful to John Lewis.

The trial highlighted the additional effect of introducing such labels for washer dryers, and supports the idea that small, low cost changes to address information barriers and provide salient information to consumers can, in certain contexts, help reduce energy demand. The early findings from this work have also fed into the EU Commission evaluation of the Energy Labelling Directive.

Stephen Cawley, head of sustainability and responsible sourcing John Lewis said:

“At John Lewis we’re always looking to provide our customers with as much information as possible about the items we stock to enable them to choose the product best for them. Having worked with DECC trialling lifetime running costs, on our washing machines, tumble dryers and washer dryers in selected shops, we’re looking to provide annual running cost information on an extended range of electrical items across all shops and online.”

Beth Moon from the Customer Insight team in DECC said:

“This trial was conducted in a real world setting and has moved forward our understanding of how to influence consumer behaviour through the use of small, low cost nudges. We are very pleased to have worked in partnership with BIT and John Lewis on this trial and hope that others continue to explore innovative ways to reduce energy use and provide consumers with better information”.

The full trial details, including design and analysis, have been published at https://www.gov.uk/government/publications/evaluation-of-the-decc-and-john-lewis-energy-labelling-trial . For more information on the trial please contact Beth Moon at DECC (beth.moon@decc.gsi.gov.uk)

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