Your Customers Want High-End, Higher-Profit Appliances
The good news is that combined global revenue and shipments of major appliances are expected to grow about 4 percent this year. The better news is that the sale of feature-rich, premium appliances in the 1000 EUR-plus range ($1,300) is one of the market's strongest segments and should increase during the next few years.
"We will grow," said Friedemann Stockle, global director major domestic appliances, GfK Retail and Technology, as he ended his presentation, "Market Outlines for Home Appliances: Sustainable, Convenient and Aspirational Features Drive Appliance Sales," at the recent IFA Global Press Conference in Sardinia.
Stockle was referring to growth in the overall global MAJAP market, but he was especially excited about the trend toward higher-end goods. While many of the numbers focused on Europe and Asia, U.S. appliance retailers should share his enthusiasm and put a little extra focus on that category. Here are a few reasons why, and we're sure you can think of a few more.
- Higher-priced products typically generate higher margins. Consumers shopping in that market will complement the core product with similarly designed and priced add-ons or packages. Does your customer really want to a cheap hood or commonplace faucet or dull flooring with that beautiful fridge, range and dishwasher? No, she doesn't. The same goes for the laundry room. "Consumers are redefining the meaning of value," Stockle said at the conference. "People are saying that price is not as important as value and quality."
- "People want features," Stockle continued, adding that energy efficiency is also a huge selling point. That's fantastic news for appliance dealers. Consumers may be buying more appliances over the Internet, Stockle said, but we all know they need an educated sales associate to hold their hands and teach them about each feature and how to use it.
The last thing a sales associate should do is skip a hands-on demonstration and tell the customer to read through the instructions when they get home. The vast majority won't.
Instead, use the precious time on the sales floor to build the relationship with the client. Do it right and you'll have a customer for life, one who will never question a fair price. They'll feel your guidance - and ongoing service - is worth what you charge. With that type of relationship, they'll feel more comfortable coming back to the store for special events (promotions, live cooking demonstrations, etc...) where they can be introduced to (and sold!) more high-end, higher-margin products.
- Those types of products are what consumers are looking for today, Stockle said. He referred to that segment of the market as "build-in" kitchen concepts, which includes add-ons like steam ovens, automatic espresso and high-end coffee machines, and wine cabinets.
- Consumers, he said, are also beginning to seek out smart appliances. While many of those that manufacturers have touted aren't ready for prime time, questions about them do offer dealers a good opportunity to talk about the technologies and position themselves as the go-to source in the future. When the smart appliances are ready for the mainstream, you'll already have a list of customers who are ready to listen and buy.
- Until then, you might want increase your inventory of innovative small household appliance (expected to generate about $934 million in sales this year), a super-charged segment of the overall appliance market, Stockle said. The segment includes a wide variety of products, such as hand blenders (7 percent growth), vacuum/cleaning robots (29 percent), floor/carpet steam cleaners (46 percent), hand-stick vacuums (20 percnet), and automatic window cleaners (268 percent).
"Growth supported by widening range and innovations in existing product groups and with new product groups," Stockle said. "European markets are trading up."
Your market is too. Help give it - and your business - a push.