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Maytag’s Internet Foray Ruffling Retail Feathers

Maytag’s recent announcement to its dealers that it is exploring various Internet options has caused a flurry of retailer protest about indications it will sell appliances directly to consumers online.

While the company maintains the retailers read too much into its message, Maytag executives so far are keeping details of a trial e-commerce program under wraps.

In mid-October, Maytag notified its dealer network via letter and/or a video message from major appliance division president Bill Beer – that it is developing ways to take its “Intelligent Innovation” strategy to the consumer via an expansion of its existing Web site.

To many retailers, that meant e-commerce: selling directly to the end customer while eliminating dealer participation in the sale.

Maytag officials tell TWICE they plan to expand the Web site to “sell Intelligent Innovation” online, including testing appliance sales to “a small segment of consumers,” probably by year-end.

“We plan to continue communicating with our dealers as decisions are made,” said one executive who asked not to be identified. “At this point we’re not moving very fast on the project.” While declining to provide further details, the Maytag exec added, “We’re trying to grow the market by driving extra demand. It’s the same strategy we’re using in all media.”

Maytag indicated its interest in Internet possibilities early last month by forming a new e-commerce team headed by Ken Boyle, who joined the company as VP/general manager, e-commerce, from global Internet services firm iXL.

Boyle was hired to “lead Maytag’s corporate-wide strategic initiative to explore and develop e-commerce opportunities and Web-enabled business models that support profitable growth across Maytag’s businesses,” according to the company.

If Maytag does begin selling appliances directly to consumers online, it would become the first full-line appliance manufacturer to embrace e-commerce through its own Web site. A number of manufacturers are linked with sites that refer consumers to local retailers. (Carrier quietly began selling air conditioners through its Web site earlier this year, becoming the first — and so far the only — room air manufacturer to do so.)

Virtually every appliance supplier has its own Internet site at this point, but the consumer-accessible portions of the sites are used exclusively to disseminate product and feature information, buying tips, and company background and news.

Ironically, Maytag’s 1999 dealer agreement specifically prohibits retailers from selling its products over the Internet without prior approval, as pointed out by a company spokesman when Sears announced in February it would include Maytag appliances in its online sales site.