Retail Observer

RETAILOBSERVER.COM NOVEMBER 2014 54 John Garey Appliance Trends THE FUTURE OF HOME APPLIANCES A huge opportunity for independent retailers E xciting times in the home-appliance industry offer independents a great opportunity to grab their share of market, if they embrace the newest technologies and ride the next wave of change. Right now, the latest must-have appliances are all about innovative technology. Designed to make consumers' lives simpler and more convenient, they also meet new, stricter standards for water and energy efficiency. There are multi-door fridges with convenient pantry drawers; fridges that dispense still or sparkling water, feature different temperature zones, or convert a compartment into a secondary freezer. Flexible ovens also offer different temperature zones. Induction cooktops cook food quickly and nutritionally, with elements that are never burning-hot to the touch. Washers can sense the type and size of a load. Steam dryers can remove wrinkles and odors. Some dishwashers provide compartments instead of being a single unit, and the latest dishwasher spray systems can get into hard-to-reach corners. Do consumers buy these expensive, hi-tech appliances? You bet! In Canada, where the retail appliance market is down almost 2% year over year*, certain subcategories are in growth mode. Three- and four-door refrigerators and wall ovens are up almost 12%* and Cantrex Nationwide members are doing a brisk business in induction cooktops and HE top-load washers. Beyond mere innovation in standalone appliances, leading manufac- turers are pushing further into connectivity and convergence. Consumers are sure to find this complicated and confusing. Fortunately, the more complicated the technology, the more independent retailers have a competitive edge because of their traditional strengths: advice, expertise, customization, installation and service. Although many of the connectivity innovations may take a while to filter down to the average consumer, the future has already arrived. Smartphone and tablet apps let you remotely manage your dishwasher, refrigerator, washer, dryer, air conditioners, LED lighting (Whirpool's My Smart Appliances and Samsung's Smart Home); or text your appliances in natural language (LG's HomeChat). So, if you "tell" your home that you're going on vacation, your fridge will automatically set to power-save mode, your robot vac to a daily cleaning cycle, and your washer to run the day before you get home. Electrolux, a member of the AllSeen Alliance, the broadest Internet of Everything open-source project, is developing products to improve how people cook and clean with appliances that communicate with each other, with consumers and with other devices. Whirlpool already sells a "Works with Nest ® " laundry pair that connects seamlessly with the Nest Learning Thermostat™ to keep clothes fresh if a cycle ends while no one is home or delay the start of a cycle during high-demand energy periods (if the consumer is enrolled in Nest's Rush Hour Rewards program through a participating energy provider). The goal is to move beyond simply linking and remote controlling devices in the home to "magically" anticipating people's needs and making their lives easier. What does this mean for independent appliance retailers? Under- standably, some might find all this daunting and prefer to stick to old standbys: traditional, low- to mid-priced appliances that everyone understands. But that would be a mistake. Yes, the new products demand a great deal of education and training and, yes, they have higher price points, but that's where you'll make higher margins and profits. Appliance retailers can take a page from the order book of successful consumer electronics independents. When faced with a slumping market for traditional products, they moved into home automation, which thrives on the fully assisted sales model, a proven strength of CE independents. Several Cantrex Nationwide members have taken the next, logical step and added appliance departments within their CE stores. This lets them leverage the connectivity between smart appliances and such home devices as security systems, lighting and thermostats – all electronically controllable remotely from smartphones, tablets or the car. To thrive, appliance retailers will have to expand into home automation and consumer electronics. Convergence, indeed! Fortunately, sales and merchandising techniques that work for hi-tech, connected appliances are those that successful retailers already use. Qualify your customers. Demonstrate benefits, preferably with live displays and videos. Upsell from lower-priced models. Create impressive kitchen and laundry rooms in your showroom to showcase the newest models. Offer installation and after-sales service. Position your store as the one that makes hi-tech simple for customers. You'll build a loyal customer base—the foundation for sales and profits, today and far into in the ever more connected future. John Garey Assistant Vice-President, Appliances Cantrex Nationwide RO

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