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An unconfirmed rumor is circulating that Best Buy will test market a "store within a store" concept with Pacific Sales. Of course, Best Buy owns Pacific Sales so anything is possible, but until now they have allowed both companies to play in their own sandbox and have only linked the two via their websites. If the rumor is true and Pacific Sales will soon occupy a corner of at least two Best Buy sales floors, the implications for the industry are pretty significant. Let’s take them one at a time …
1. Will this concept be expanded to all/most Best Buy locations? Obviously, Best Buy would not do this unless further expansion is planned if the concept works. Will Best Buy’s (meager) appliance department evolve into a minature PacMan?
2. Is this a "back door" strategy to try and coerce high-end brands onto the Best Buy floors? Pacific Sals is the "Big Dog on the porch" in at least one major market, if not two or three. It’s pretty hard to say no to them. Sub Zero and Viking may have the stones to say "hell no, we won’t go", but will the other high-end manufacturers?
3. Was this backdoor strategy planned all along? Best Buy didn’t exactly make the "best buy" when they paid $ 400 million for Pacific Sales. Maybe this strategy was in their hip pocket when they closed the deal.
4. What will be the impact on the brand positioning of those high-end manufacturers that do go along? Thermador has positioned itself as "the American icon" that has been "empowering the cooking enthusiast for 75 years." Miele says that "anything else is a compromise." Don’t these companies have marketing managers that understand brand positioning?
5. Finally, if the rumor is true and one or more high-end manufacturers go along with this fiasco, will dealers put up a fight? Will dealers tuck their tail between their legs and continue supporting the brands sold by the geek squad?
What say you?
If this is happening as it is being described, history would suggest that the independent dealers will respond with no more than a lot of "huffing and puffing". They won’t offer any additional meaningful support or reward to the manufacturers who are resisting this, and will do nothing to punish the manufacturers that jumped at the bait. After realizing that they will gain nothing in return for trying to support the independents, the manufacturers who didn’t jump in right away will have their justification to give up and join the party. How many times have we all seen this movie?
While I agree with both Bob and Cohiba the consumer does not want to make their purchases From some kid in a Blue shirt. But the Manufactures have to support the dealers they have. It is no secret sales are slow, but when Manufactures start to go outside the normal methods, Of how they distribute the brand, we pay for it. I have lost sales to the Blue Shirt. Customers Will go to your store let you do the sales presentation, educate them and then go to the big box Store to make their purchase, so they can get free delivery, installation, and a return policy That is second to none. What the small independent dealer does not see, is the big box store Has agreements with the very same manufactures you sell to take these products back with No questions asked. Times are tough but it does not help when the high end core brands look At ways to sell their brand that under cuts the dealers they already have. Just last week I heard About an Ace Hardware store selling Miele Appliances. I thought it was a joke until some one Sent me a picture. And this is in a Urban City that has nine Miele dealers all ready. I mention This as in the original post you say of a suggestion of Miele at Best Buy, which I know is not Ace Hardware. After all Ace is the place!
I got to thinking about your post.
I bet Ace would do a good job selling Miele. I would think that they would sell on feature & benefit vs. the box store selling on price.
Now I’m not saying that Ace should sell Miele. Just saying that the people at Ace are customer friendly and pretty knowledgeable, at least my Ace is. I tend to find myself going to Ace more and more for their service, helpfulness & professionalism. Interesting how that goes to some of the points made in different posts about independents.
Just my 2 bits of course, & no I don’t work there 🙂
I am not implying Ace can or cannot sell Appliances. It is the impression Miele is giving to John Q Public. I am sure Rolex could sell watches at Jared’s Big Box Jewelry store, so why don’t they? Because they are high end and John Q wants Exclusivity, all this does is water down a great brand for what so they can sell a couple more Appliances, while John Q moves to another brand. Then these same Manufactures walk in your store and wonder what your doing wrong because sales are down.
Do the Math last year 250 units this year 180 units add Ace 55 units Miele loss 25 units And this is a Movie we all have seen as well…
John Q. Public is a generic name in the United States to denote a hypothetical member of society deemed a "common man." He is presumed to have no strong political or social biases relevant to whateve.
ApplianceAdvisor has not commented in this Forum yet, therefore there is no proof in this Forum that we are wearing beer goggles.
I won’t mix words or implications …
Ace is no more capable of successfully handling Miele than SEARS is of handling the new Jenn-Aire … and I’ll include Best Buy in my diatribe as well !!!
High-end, Advanced Technology, and Niche Market Features can only successfully be addressed by professionals … professionals who are experienced, conversant, and knowledgeable …
A sales associate who sells mainstream automobiles may not even be able to get an interview @ a Mercedes dealer because he is inherently under-qualified (to be nice about it) … the same goes for my examples !!!
Pearls before Swine … LipStick on a Pig … that’s all this is !!!
There’s more required here than training and hiring quality sales people and promising to provide loaners if the unit breaks, though these strategies are the cost of entry.
The butcher, the fish monger, the single brand car dealer, the adolescent paper boy, the downtown movie theatre, the family owned donut shop, the corner diner, the doctor that makes house calls. Service, training, relationships, and quality didn’t save any of these guys. Each of these industries and professions have been swept up by time clock punchers and publically traded multi-nationals.There are people who will pay for service. There are still a few butchers who serve that small segment willing to pay more for quality and better service.
Its just that there are not enough of these consumers to keep all our doors open.
We’re going to need a better plan than more service.
+1
To name a few ideas, some may be doing these too.
I like to meet with the clients in their home when possible. Post sale follow up in home, more of a how to or use and care walkthrough. Most clients have my personal cell # and are welcome to call at any time. Thank you letters are always good too. This all helps to build name and referral buis. These things are not done for every client, but for most kitchens they are.
Thought I would toss it out there, maybe sill help someone else.
Well, Mate … I give you one thing … you know character … for the record, I’m still a Butcher, Fish Monger, & Fromaggerie guy …
You are very correct though, there is a portion of the population you will never reach … on the other hand the innovator is usually the one last standing, so maybe being better @ getting you message out, appealing to the changing demographics, and knowing when you’re beat without providing more information than you have to in a losing effort …
I have no problem bad mouthing the competition, but in a classy way … such as pointing out that SEARS "rebates" are not true rebates because they are essentially store credits for future purchases AND with expiration dates … and some other interesting aspects once you get down below the surface …
What about pointing out that H/D & Lowes have the highest incidence of "scratch & dent" in the industry ??? This is primarily because they are handled by people who have no experience handling appliances because they are hired as delivery men who will need to handle lumber and other commodities not requiring the same care as appliances …
I recently heard Jim Valvano’s tenants for life and one of them is to spend some time each day in thought … in our business, maybe that thought ought to be about innovative ways of bring new business thru the door !!!
Best-buy concept is already working under a different store name. Look at SEARS, they have a few fully owned by sears subsidiaries, SOE, WESTAR, FBA.
These locations all sell high-end, have their own service dept. and installation dept.
As my name implies, I’m an ex-appliance guy, If this comes to my area, I’ll apply.
There’s a big difference beween a wholly owned subsidiary and a "store within a store". Sears ownership of the ABDs is mostly transparent to the consumer and even though Hoffman Estates has called a lot of the shots, the management at the ABDs can still claim independence with some credability. Now Best Buy can leverage Pac Sales volume to insist that all Pac Sales locations (including the new formats) be allowed to sell the high-end lines. It’s easy to say "no" to Best Buy but when Pac Sales management says they want brands in all stores it will be harder to say no.
What you described is exactly the scenario that I have witnessed so many times. Brand X goes into some Big Box and the Independents start crying about the decision and how it won’t grow Brand X business. What the Independent will not do is remove a line from the floor or show more support for the lines that are not in that Big Box. The Independents are affraid that they migt loose a sale or cannot switch a customer to a more supportive line.
Lots of good discussions on this Forum however the mass of Independents that are left are like sheep following a herd off the cliff. Wake Up! Get some Balls and lets support the brands that continue to support the Independent dealers.
Not that we are suggesting any particular strategy but we have only one comment here. Complaining that independent dealers act independently is not entirely productive. If independents are going to accomplish anything than they have to work in a unified manner. Many here have complained about unions, but then if they didn’t work there would be nothing to complain about. If independent dealers wish to have some measure of control over their own destiny, they will have to have some measure of a unified strategy.
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