By Lisa Johnston
New products on display at the American International Toy Fair, held in N
CHARLOTTE, N.C. – It was just a little more than one year ago that former 3M executive Jack Truong took the helm of Electrolux’s North American operations, succeeding Kevin Scott.
Like his counterpart at GE Appliances (former jet engine exec Chip Blankenship), Truong, a chemical engineer by training, was new to the white-goods business. But his boss, Electrolux president/ CEO Keith McLoughlin, who had led the North America division for five years, saw in him “the ability to accelerate growth by applying innovative technologies and marketing to meet consumers’ changing needs.”
Truong’s new mission was to overcome a stagnant majap market and grow the business within Electrolux’s largest region, which accounts for fully one-third of its worldwide sales. To do so, he is burnishing the Electrolux and Frigidaire brands by highlighting their heritage and industry firsts; trimming costs and improving efficiencies by editing the assortment around best-selling SKUs; and placing a renewed focus on benefit- driven product design by building a new R&D center and leveraging such consumer trends as demand for smaller appliances as home sizes shrink.
On the marketing front, Truong has doubled the size of his retail training staff as part of a “push” strategy that drives sales through the retail channel, rather than generating demand through promotions and consumer campaigns alone. The company is also utilizing the fruits of its design efforts to spotlight best-in-class products, such as its Frigidaire Orbit Clean dishwasher, which offers industry leading cleaning, drying and low-noise capabilities.
More controversial, at least among independent majap dealers, is Electrolux’s decision – along with Whirlpool – to extend distribution to The Home Depot, as Sears’ future prospects wane. Truong’s argument: The accelerated growth that the home-improvement channel brings (Lowe’s is already a customer) will allow Electrolux to increase its investments in R&D, which will benefit all retail partners.
So far the strategy appears to be working. Aided by improved operational efficiencies and a third round of price increases in February, Truong’s division posted a 14 percent increase in dollar volume during the second quarter, ended June 30, while significantly improving its operating income and gaining market share in key categories.
TWICE recently caught up with Truong, who shared some first-year reflections:
On his background: “I was trained for business leadership and management, and my experience spans many different industries and geographies, from fast-moving consumer goods to long-cycle automotive products.”
On the majap industry: “It treats its products like commodities. Everyone needs a car too, but the automotive industry has done a nice job of marketing functionality and innovation, and creating an emotional attachment to its products. The appliance industry is focused too much on price, rather than understanding the needs of shoppers and focusing on the benefits we bring them. Electrolux has invested a lot on understanding consumer trends, and in telling our story through increased retail sales training, point-of-sale materials and advertising to make us top of mind.”
On Black Friday: “I can’t predict what retailers will do, but despite big promotional activities, the industry has not stimulated demand one bit, only pulled business forward. The industry is beginning to realize that, and I hope others understand that too as they go through their analyses.”
On smart appliances: “It will take a little longer to get them connected, another five to seven year before they’re mainstream. It won’t start with a big bang, but it will be a very exciting journey for the industry.”
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.