— A new generation of
smart appliances that can save consumers
money by communicating with and reacting to
the energy grid will help raise price points and
restore margin within the majap industry.
That’s the good news.
The bad news, according
to Jim Campbell,
president/CEO of GE
Apliances & Lighting, is
that the scenario won’t
begin to play out for another
one to two years,
as the economy continues
to dig itself out of the
In the meantime, independent
to trade down their merchandise
mix in order to
remain competitive with
national big-box chains.
“Our message had been to step up the mix,
but the reality now with these large promotional
events is that you have to play to be in the game,”
Campbell said during a town hall address at this
month’s Brand Source convention in Las Vegas.
“If you lose shoppers, they won’t come back
[and] you will lose to the big-box guys.”
GE has helped independent dealers compete in part by
bringing some of its premium GE Profile models down to
the mid-price tier and by providing “great Labor Day specials,”
While consumer confidence is up from a year ago,
shoppers have continued to cut back on spending and
are increasingly selective about trading up, Campbell observed.
“People are just replacing
products with comparable models.
They’re not really ready to make
the step-up unless we give them a
compelling reason,” such as better
results or a new technology with an
apparent benefit, as is the case with
iPad or smart appliances.
Indeed, “green” still resonates
with consumers, who are willing to
pay a premium for energy-efficient
appliances, making that category an
important focus and opportunity for
Nevertheless, high unemployment
and the ailing housing market have prolonged the recession,
and GE now foresees “a very, very slow recovery for
appliances. It could be a year or two before we see significant
While the back-half of 2010 remains cloudy, GE is projecting
industry growth of 5.4 percent this year, compared
with an 8.2 percent decline in 2009, due to “the enormous
impact” of the “cash-for-appliances” rebates. The federally
funded program sent industry sales soaring 10 percent before
flattening or falling, he said, while sales are expected
to grow about 3 percent next year.
“We’re looking at a slow, gradual climb rather than a
snap-back” typical of past recoveries.
Campbell’s advice: “We need to challenge ourselves every
day to improve. Secret shop your store, access your
operations critically, and change your business operation.
“You can’t let one sale walk out the door,” he concluded.
“Consumers want to feel they got a deal, a bargain. Do that
and you’ll close the sale.”