All in all, the appliance industry fared well in 2015 as consumer and housing demand drove solid if not stellar sales. To help foment business, manufacturers unleashed all manner of smart and inventive machines while retailers busily reinvented their sales floors. And all watched and waited to see if Electrolux would pull off one of the industry’s largest mergers of leading majap brands. It wouldn’t.
The white-goods industry began the new year with the wind at its back, as total 2014 factory shipments rose a solid 5.5 percent over 2013.
Leveraging that momentum, majap exhibitors brought to CES a slew of smart and often ingenious innovations, like LG’s dual washer with a dedicated pedestal washer for delicates, and Samsung’s top-loader with built-in sink.
Other majap makers held their fire until CES cleared out and the Kitchen/Bath Industry Show and concomitant International Builders Show moved in, where GE hit one out of the park with its onboard Keurig coffee-making fridge.
Fresh from its success with in-store CE shops at Best Buy, Samsung was looking for a repeat performance in appliances. Testing began this month on a store-within-a-store shop at Lowe’s, while both Lowe’s and The Home Depot began deploying touch-screen kiosks in a separate pilot program.
In a special report, TWICE profiled three retailers who created retail environments that mirror the growing sophistication and fashion-focus of home appliances. Pirch, the luxury majap and plumbing supply showroom, offers visitors working kitchens, full-time chefs and interactive displays, while Sears Hometown, the Sears Holdings specialty spinoff, rewrote its appliance playbook with a wider assortment, new merchandising concepts, touchscreen kiosks, and new fixturing and signage.
Also joining the fray was Star World, a Latino-market CE, appliance and furniture playground created by Curacao co-founder Jerry Azarkman and former president Rick Hutton. The stores, ranging from 5,000 to 30,000 square feet, will employ a bricks-and-clicks model of virtual inventory to keep overhead low and shoppers engaged. The first location opened in October.
Following soft results and in apparent preparation for its acquisition of GE Appliances, Electrolux released Jack Truong, the chemical engineer and longtime 3M executive who had led the U.S. business as president/CEO since 2011. Keith McLoughlin, who held that post before moving to Stockholm to run the parent company, assumed Truong’s role on an interim basis.
Elsewhere, Nebraska Furniture Mart officially opened its third and largest mega-store, a 560,000-squarefoot retail behemoth that befits its Texas home.
Bosch, which bought out Siemens’ half-interest in the partners’ BSH appliance business in January, began a sweeping reorganization of its North American operations. Now running the Bosch, Gaggenau and Thermador brands in the U.S. are a team of company men led by former BSH Netherlands chief Christopher von Nagel, while former Panasonic exec John Iacoviello continued as senior sales VP.
The numbers are out and TWICE’s Top 50 ranking of the nation’s leading white-goods dealers revealed solid sell-through in 2014, with majap sales up 5 percent over the prior year’s robust 9 percent gain. Once again Lowe’s topped the charts with nearly $6 billion in sales, followed by a post-Hometown Sears with $5.1 billion. The biggest gainers: Amazon, ahead 46 percent to No. 17; Conn’s, whose white-goods sales rose 27 percent with the addition of 11 new stores; and Best Buy, up 11 percent with 44 fewer locations.
Samsung is at it again, this time with its major CE retail partner Best Buy, in opening branded in-store appliance shops inside the big-box stores. The sections feature Samsung’s top white-goods intros from CES, specially-trained Blue Shirts to sell them, and, in select locations, life-size interactive touchscreen displays. The partners described the shops as the largest dedicated in-store branded display of Samsung majaps in the U.S.
Meanwhile, Justice Department attorneys filed an antitrust suit in an effort to derail Electrolux’s $3.3 billion purchase of GE Appliances, fearing an over-concentration of cooking capacity, particularly within the homebuilders’ channel.
And on the people front, a new team took the helm of the Nationwide Marketing Goup, led by former GE and Electrolux execs Dave Bilas and Jeff Knock. But on a sad note, retail visionary Bob Abt of Chicago’s legendary Abt Appliances passed at 77.
No longer on the ropes, Best Buy hit one out of the park with a strong second-quarter earnings report bolstered in part by the new Samsung shops and the addition of 35 of 60 planned Pacific Kitchen & Home sections.
Meanwhile, in a special report on the connected-home market, majap executives told TWICE that consumer demand is trailing the use-case scenarios spun by company engineers and that mainstream acceptance is still five years away.
In an exclusive interview with TWICE, Haier America president/CEO Adrian Micu outlined his strategy for the once listless business, which had been unable to move beyond volume sales of commodity ACs. His plan: to develop lifestyle groupings of majaps and CE that can serve his customers throughout their various life stages. The effort required increased investment by parent company Haier Group, which readily green-lit Micu’s concept of building the brand into a premium U.S. player.
As the Justice Department grilled industry authorities on the anti-competitive implications of a GE-Electrolux merger, GE seemingly thumbed its nose at the agency by boosting production at its LaFayette, Ga., oven plant.
Meanwhile, hhgregg, which is losing ground in the marketplace, looked to revitalize its appliance business by replacing its “wall-to-wall product stacks” with “experiential room settings, including the Samsung instore displays that first appeared at Best Buy.
Though not traditionally associated with holiday gift giving, majaps assumed a major role on Black Friday. According to market research firm Gap Intelligence, 12 of the largest appliance retailers upped their holiday weekend ad count by 17 percent, and a leading national white-goods retailer confirmed to TWICE that November has indeed become a big deal for dealers, with sell-through expected to hit some $3.6 billion industrywide.
Meanwhile, attorneys for Electrolux and the Justice Department went at it as the agency’s antitrust suit entered a federal court. Any hope of a settlement seemed dim as regulators made what Electrolux described as unacceptable demands.
Electrolux’s hopes to quickly close the volume gap with Whirlpool were finally dashed this month when GE backed out of the buyout deal amid stiff opposition from federal regulators. The 15-month-long saga ended with Electrolux paying GE a $175 million termination fee, closing the year in white-goods on a bittersweet note as the fate of GE’s mighty but unwanted majap division remained uncertain.
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