- Data doesn’t lie: Design-led companies generate 32% higher revenue (according to the McKinsey Design Index).
- Price Perception: The European consumer subconsciously values a product based on finish quality and ergonomics before even reading the specifications.
- Trust: In the EU, a “cheap look” is equated with a lack of technical safety, even if the product holds valid CE certificates.
- Leo Strategy: We don’t decorate products. We redesign them to justify their price in the Premium segment.
We live in an era of commoditization. The motor in a €50 vacuum cleaner and a €500 one often comes from the exact same factory in Shenzhen. So, what makes a customer in Hamburg or Warsaw pay ten times that amount for a premium brand product without blinking? The answer is R.O.D.I. – Return on Design Investment.
The McKinsey Design Index
For years, the impact of design on business was difficult to capture in Excel sheets. This changed with the publication of The Business Value of Design report by McKinsey & Company. They analyzed 300 public companies over a five-year period, assigning them scores within the MDI (McKinsey Design Index). The conclusions are brutal for companies that ignore design. Companies in the top quartile of the MDI achieved revenue growth 32 percentage points higher than their industry peers. More importantly, their Total Return to Shareholders (TRS) was nearly double. This is proof that design, in strategic terms, is just as critical as logistics or R&D.
Price Psychology vs. Quality
At Leopard Brands Accelerator, when analyzing products from Asian markets, we often encounter the phenomenon of a “noble interior in a cheap suit.” Excellent engineering is hidden inside a casing made of low-grammage plastic, with poorly fitted seams and an illegible interface.
For the European consumer, sensory quality (touch, weight, button sound) is synonymous with technical quality. If a device “creaks” in the hands, the client subconsciously assumes its electronics are faulty. Investing in casing redesign (Industrial Design) allows for Price Anchoring at a much higher level. Changing finishing materials and UX can raise the MSRP (Manufacturer’s Suggested Retail Price) by 40-60%, while increasing production costs (BOM) by only 10-15%.
The European Trust Filter
Design performs one more critical function in Europe: it builds trust. The EU market is regulated and safety-conscious. Products that look “lab-like,” “raw,” or “inconsistent” are automatically categorized as “cheap imports.” Good design serves as a visual safety certificate. It makes the product look like it has passed rigorous testing.
Our work methodology at Leo is based on this exact premise. We don’t just scout products to sell them. We scout technology that we can “wrap” in European DNA, creating an Asset that builds the company’s wealth, rather than just generating one-time trading turnover.
“I often tell investors: Design is the only marketing element the customer physically touches. If you cut costs here, you signal that you don’t respect your own technology. At Leo, we treat industrial design as a tool to defend high margins.”
— Krzysztof Wasielewski, Strategy & Design Lead
