NEW YORK —There's a shift afoot in consumer buying patterns for major appliances, and it doesn't bode well for the multi-regional CE/majap chains.
According to 2001 TWICE Major Appliance Retail Registry, that channel of distribution, which includes such heavyweights as Best Buy, Circuit City and Rex Stores, lost two percentage points of market share among the Top 100 players last year, reducing its take to 20 percent of total Registry volume. (See pie charts, above.)
Granted, most of that decline, which translates into a $198 million sales shortfall, can be laid at the doorstep of Circuit City, which bailed out of the appliance business, clearance sales and all, last fall. Also creating a drag on white goods'second-largest distribution tier were softer sales at Rex, the 14th largest majap merchant, which saw only a marginal 1 percent increase in category revenue.
The question is, where did that business go? As majap manufacturers were quick to point out, consumer demand for new refrigerators, ovens and washing machines didn't disappear just because the white goods department at Circuit City did.
On the contrary, Registry results indicate that on a retail sector basis, it was the home improvement channel, i.e. Lowe's and The Home Depot, which picked up those two share points, while the remaining store segments remained flat. The added sales oomph gave the two home improvement chains fully 12 percent of total Registry sales, or $1.5 billion, placing them third in the store type rankings, and second and tenth, respectively, on the Top 100 chart.
Absent from the channel rankings is e-tailing, as the appliance space, with its daunting fulfillment needs, has proven to be one area where even the most ambitious pure plays dare not tread. Instead, the online sales of white goods will likely remain the domain of the click-and-mortar crew, which already has the infrastructure in place. To date, Sears dominates the category online, as it does off, and anticipates that sears.com may ultimately come to account for 10 percent of its total majap sales.