What do retailers want? The major appliance industry’s primary supplier forum got some answers at this month’s Association of Home Appliance Manufacturers annual meeting.
In a first-of-its-kind panel discussion, two key retailers bluntly told meeting attendees what suppliers could do to help their dealers sell their products and serve the end consumer.
Looking at the state of today’s retailing, Best Buy’s Mike London, senior VP/general merchandise manager for consumer electronics and appliances, declared, “We have to reinvent the business, and it’s starting with the consumer. The consumer today wants to be in control, and does not want a retailer or supplier shoving something down his or her throat — consumers reward those who let them have as much control as possible.”
Said London to his white-goods audience, “Today’s consumers are very demanding. They expect a lot from the retailer, and we’re going to expect a lot from you. We want value added to your products. Is changing the handle on a refrigerator value added? No. Is making the consumer’s life easier value added? Yes.”
In terms of the purchasing experience, London said consumers “need a more open understanding of what the product does, how it works, and what will happen when they take the product home. What is the product going to do for them?” Communicating that message, he said, is a challenge for retailer and manufacturer alike in terms of both shopping environment and product packaging.
“We need a lot of work done up front,” London stated. “Appliances do not just disappear off the shelf. We need to offer a compelling reason for the consumer to buy.”
Dennis Reaves, senior VP/general merchandise manager for Wal-Mart, told the AHAM group the retail industry has experienced more change and consolidation in the past 10 years than in the past 50 years. “Today both retailer and supplier must understand that the consumer, not the retail outlet or chain, is the customer,” he said. “And that customer is at the controls and will decide where to shop.”
Reaves urged retailers and manufacturers to cooperate to address the customer: “There is no room in this industry today for confrontational relationships between retailers and suppliers. An arrogant approach to business is doomed to failure over the long term.”
He suggested that to understand what consumers are seeking, suppliers should “learn to shop their own products like a customer, develop a shopper’s mentality, and let that knowledge lead product and packaging design.”
Representing AHAM’s major appliance division on the panel, Kent Baker, strategic marketing VP for Maytag Appliances, conceded that suppliers need to learn more about consumers’ shopping habits and purchasing behavior.
“We as an industry know very little about what happens on the retail floor” in such areas as average selling prices, retail sell-through and regional differences in sales patterns, Baker conceded. Calling for retailers to share information with their suppliers, he said that through such data-sharing “we have an opportunity to learn about the consumer and how we can bring value to the consumer.”
The Maytag exec praised the Internet as a good source of information about appliances for consumers, because “it’s an opportunity to help the brick & mortar retailers tell the product innovation story, then give the consumer the opportunity to go into the brick & mortar store and complete the transaction.”
Baker acknowledged “a huge gap between the innovation story we’d like to have told and how it is actually told. In most cases, he said, it’s just not happening in major appliances” on the retail sales floor.
In addition to the retail panel discussion, the AHAM meeting included election of new officers. Alan Kessler, VP of government relations and technology for Amana Appliances, was elected to a two-year term as AHAM chairman. He succeeded Mike Todman, senior VP, sales and marketing, North American region, for Whirlpool.