Retail Observer

RETAILOBSERVER.COM APRIL 2018 54 A mong the usual suspects that supply the bulk of the appliances bought in the United States, it is perhaps the more high-end vendors that are overlooked due to their exorbitant cost. Brands such as Sub-Zero/Wolf, Thermador, Viking, Monogram, and Jenn Air have existed for decades in an exclusive niche market. Recently, the amount of luxury appliance brands available has increased. The addition of Hestan, Thor Kitchen, Signature Kitchen Suite, Liebherr, Beko, and NXR products have resulted in a much wider selection for buyers to choose from. Although the luxury market accounts for a small percentage of major appliance sales in the U.S., those numbers are growing. However, luxury brands still have their difficulties. The existence of so many brands within such an exclusive market begs the question of whether present conditions can sustain each vendor. Despite the name recognition associated with their appliances, it is difficult for these brands to seize significant market share since their customer base does not seem to overwhelmingly prefer one product over another. It seems even the luxury market has its dilemmas amid the changing world of retail sales. In an article published on September 17th of last year on the Stealing Share website, a marketing study on luxury brands was unveiled which outlined the inherent difficulties high end appliance manufacturers have in gaining market share. The study also posed the question of whether the market can sustain the existence of so many brands courting the same demographic. Thankfully, luxury appliances have a unique quality that mass marketed ones do not. "Their (luxury brands) advantage is that consumers of premium major appliances are already predisposed to purchasing them. The premium appliance consumer is not one who, when the microwave breaks, heads to Home Depot to get another one." Ironically, the means to purchase these high-end products comes with a price for the brands that sell them. The article goes on to reveal that the customer's contractor or designer is often the person selecting the appliances. This creates a false impression that customers prefer a specific brand. "There is little innate brand preference and that preference comes as a result of past experience with the brand…One thing is clear, premium appliance brands don't know what drives customers to purchase their specific brands." It seems that the customer is more interested in the cachet of owning luxury merchandise than in a certain brand. This reality poses a formidable hurdle for vendors hoping to gain market share. The news is not all bad for luxury appliance brands. The popularity of smart technology has begun redefining what kitchens require. What was once labeled a luxury appliance may, in the future, become a common fixture in the contemporary kitchen. In an article published last December by Bloguin Media Group entitled "The Future of Kitchen Appliances," author Derek Hanson expands on the prospects of the high-end appliance market. "Years and years ago, luxury meant leisure, glamor, and showing off," says Hanson. "These days, there's a more practical side: it's about making our lives better in every way, not just when we're relaxing or showing off in public." Hanson asserts that the sleek kitchen of the future will soon be the new normal. "Kitchen are centers for work in our home, and that has made them the centers of luxury in modern homes. " Despite appearances, luxury retail brands have their unique set of problems that they must contend with. The myriad of competing vendors coupled with the fickle nature of their customer base have made it a market filled with uncertainty. Their continuing fortunes will depend on their ability to distinguish themselves from each other. With this in mind, it is unclear which brands will continue to thrive. If Hanson is correct, a new generation of customers may warm to the idea of having upscale appliances in their kitchen. If not, luxury brands must appeal more strongly to their customers in order to create the loyalty that they so clearly lack. It is a challenging proposition but one that is necessary for survival in the retail appliance market. John White Appliance Trends John White, EVP of major appliances at BrandSource RO SMALLER LUXURY VENDORS FIGHT FOR A NEW NICHE IN APPLIANCE INDUSTRY

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