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How to Beat Big Box by Marketing Luxury Appliance

Thermador. Wolf. Dacor. Gaggenau.

These luxury appliance brands need no introduction to the independent retailer, but how do you market them to your customers?

On today’s episode, Adrienne and Mark co-host with the legendary John O’Halloran of Nationwide Marketing Group. Currently, O’Halloran is the Director of Luxury Appliance and for good reason. His resume in the luxury appliance industry goes back almost two decades, and if there can be a resident expert in luxury appliances, O’Halloran is it.

This episode discusses why luxury appliances have not faired well in big box stores (hint: it’s not for lack of trying), expectations for service of a luxury appliance and who you should network with, the intention of the consumer, and how 2020 shifted the marketing landscape and what you need to do about it.

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FULL TRANSCRIPTION

Mark Kinsley 

How to beat the big box by marketing luxury appliances. Our co host today is John O’Halloran. And the fan marketing show starts in 30 seconds.

Oh, that music means one thing it is the fan Marketing Show with yo Adrienne, and our special co host today, John O’Halloran. This is strategies, tips and ideas to help retailers and brands grow their furniture, appliances and mattress business. Let’s go right out of the gates, as always with our trivia question for today. Hit us, Adrian.

Adrienne Woods 

Well, and in honour of our show co hosts today I thought I would do an appliance trivia question. So according to Yale appliance statistics, they ran a statistics report back in August, what is the number one appliance brand, just general appliance brand, and I’ll give you three choices. So your first guest is Whirlpool. Second is KitchenAid. And the third is Samsung.

Mark Kinsley 

I’m gonna guess that John has a huge advantage in answering this question. But I will say I need some clarification. And when they’re talking about number one, are they talking about number one in terms of brand identity number one in terms of revenue?

Adrienne Woods 

It just says what is the number one appliance? Right, that was the question from the report that I pulled.

Mark Kinsley 

Okay, well, now we’re gonna have lots of opinions. John, you got your answer you got you got it baked into your head. Give it away. All right, hang around. So the end of the show and by the way, if you think you know the answer, go over to fam dot news. And you can text us using our podium number right there from our website. And our guest today is John O’Halloran. John, you’re the director of luxury appliances with nationwide marketing group. And the last time I saw you, you were giving us a whirlwind tour on the primetime show space floor of the luxury appliances, industry. And that was a lot of fun. Tell us about tell us about you. Tell us about your background and tell us what you do with nationwide Marketing Group.

John O’Halloran 

Sure, thanks, Mark. I love your guys’s energy. Adrian, how are you? Good. Show Yeah, so John O’Halloran, I’m, I live in Chicago. But and I based out Ben, I’m based out of Chicago my entire career. I’ve been in the appliance business for about 21 years now. And a lot of that time is spent in the luxury space. So a lot of that has been through distribution. But the fun thing about when you’re talking about distribution is that you get to touch a lot of different brands. So I’ve had the opportunity to sell over 20 luxury appliance lines into the independent retailer channel. So it’s been a lot of fun, very passionate about the luxury space. I think my experience and the relationships I’ve built over the years have kind of made me somewhat uniquely qualified for what I’m doing at nationwide. The first thing is, I’ve had a lifelong career of working with the independent retailers. So moving to nationwide marketing group, it’s been the best experience for the simple fact that I get to continue, not just, I’m not selling into the channel anymore, I’m actually able to work on their behalf and try to help them with their business. And with the focus on the luxury appliance sector that we launched about a year and a half ago, it’s allowed me to even help them focus on what I consider, you know, the luxury appliance business to be probably, you know, one of the most important categories for luxury, or for appliance retailers. Because it’s, it’s it’s very difficult for the big box stores to sell and be successful selling. And it’s it’s a it’s a part of the business, it’s owned by probably about 80 to 90% of the sales are done through the independent retailer.

Mark Kinsley 

That right there, I think, delivers us right into this topic, which is, as an independent retailer, how do you beat the big box with luxury appliances? And like you said, I think the setup there is is great. It’s just not a it’s not a category that that some of the biggest big box retailers are serving are going after it. Why is that help us understand? Why would the big box not go after that category? And why is it better served by the independent retail channel?

Adrienne Woods 

Also understand, we come from the land of Walmart, too. So why is Walmart not catering to the luxury consumer?

John O’Halloran 

Great question. Right. And it’s not for lack of trying in the past. Right. So so they’ve attempted to be successful in the luxury space. But the challenge is and why the independent retailer does so well is to be successful with luxury appliances and think you’re, you’re talking about, you know, very heavy big appliances that need to be a lot of times customly installed. They need to be really, you know, with the right specifications, they’re very costly. So it really needs to be sold by a true sales professional, right, and we call it like an assisted sales floor. So there’s a tremendous amount of training that our retail sales associates for independent retailers have to be six Tesco in the luxury space, you just don’t get that at the big box store. Right. Also the delivery and installation. So a lot of independents will have their own delivery and installation teams that are highly qualified, and they understand their training how to deliver a product without damaging it. But then the important thing is, and then installing it. A lot of independents have, you know, service that they provide, right or have tie ins to local service networks, that when there is a problem, because that, you know, you spend $15,000 on a refrigerator, and there’s an issue, you want to take care of right away, right. And so they have the relationships it with the independent service network as well, to make sure that they handle these after service problems when they arise. So there’s a lot of different reasons. And for these reasons, right, it just allows the independent to continue to thrive in a luxury space.

Mark Kinsley 

One of the things from what I understand whenever it comes to selling luxury appliances, it’s just a different path to purchase for the person who is going to purchase luxury, versus maybe a direct purchase. And for example, you know, from talking to some of the folks that showed at Nationwide primetime Expo on the luxury space, they were talking about how people really are buying onesie twosie, you know, they’re redoing entire kitchens with appliances from the same luxury brand. Or perhaps maybe they already have some of those appliances from what one luxury brand, and they’re rounding out the rest of the appliances to complement that, because the kitchen is such a centrepiece. So unlike whenever your dishwasher goes out, and you have to go get a new one, there’s a lot more intention and planning. And that’s a obviously a different path to purchase than just buying a one off.

John O’Halloran 

You’re absolutely right, there’s a lot that the sales cycle, we’ll call it or just the lead time, you know, you have consumers that are planning their kitchens today, or delivery six to 12 months down the road, because the path of purchase is not just coming in for that dishwasher that you mentioned, because you know, that broke down and now you’re frustrated because now you have to buy a new dishwasher you are planning for, this is a purchase that you’re planning for and you’re excited about. So you’re in you’re also not just working necessarily with, say the retail sales associate, you’re you’re working with a a kitchen designer, you’re working with an architect, right, you’re working with your builder. So it’s a more complex sell. But again, the relationship part of this is really, really important. And that’s why you know, more so than, you know, the other sides of the appliance business, it’s so important to focus on the relationships with the consumer, with the design community with the builder community to be successful in this area. Adrienne I know just had redid her kitchen, right? And you work very closely with your architect and Yeah,

Adrienne Woods 

well, we are currently building so on actually today’s episode that debuted with Robert colour from monogram, we were talking about how I’m in this septic design process of building. So it’s not the glamorous part. But as we were talking about working with our architect, it was necessary that she was like, if you’re going to be if you’re going to do more than like a standard, you know, whatever brand refrigerator, we need to design that now so that when you get to a builder and you actually go to that process, you’re not like, oh, I bought a 48 inch range. But we only design this kitchen for 36. Like it’s necessary to start having those conversations very, very early on. Because to your point, by the time that this house actually gets built, this is the closest we’ve been able have been like a 10 to 11 year process from finding the land, actually creating the plan that we wanted, building it, etc, etc. You’re talking 11 years that I’ve had to sit and percolate and think about what do I actually want, like out of my kitchen?

John O’Halloran 

Okay, well, that’s a that’s a very long sales cycle. 11 years, right, but,

Adrienne Woods 

but I mean, it’s about from the time I started to design from hopefully working ground less than a year, less than a year.

John O’Halloran 

Yeah, absolutely. That’s, you know, what I’m talking about, you know, it’s, you’re excited about this, you know, you’re excited about the kitchen. So you want to make sure it reflects kind of what your personality is, what you know what your needs are. And so that’s why the path to purchase is not simply walking in and say, Okay, I need your dishwasher. Right? It’s very carefully planned out. And not just through a retail sales associate, but multiple different parties. And it starts with usually the architects and the designers, you know, we call the specifiers in the process. And you know,

Mark Kinsley 

I would think about that.

Adrienne Woods 

I’m sorry, I was gonna use all of this, when you talk about being the big box, when I start to think about purchasing my refrigerator or my range or my oven or whatever else, my mind doesn’t instantly go to a big box because I know that the things that we have designed and put in place are not going to be sold there. So then my question becomes, where do I even go? Where do I even start to look? A lot of times I’m gonna go online and see if something pops up to be like, Okay, where can I now physically see this in the store? To see if it actually does what I want it to do?

John O’Halloran 

Yeah, absolutely, well, that’s the importance of, you know, we talked about the way to be big box, you know, with the luxury appliances is you have to market, you have to talk about it. And, you know, we’re coming off a pandemic time period where a lot of retailers might have kind of let their foot off the gas pedal for marketing, because business has been so strong, right, and it’s been extremely strong in the luxury space, we need to, you know, things are starting to level out a little bit more and get back to what we say it’s more of like a 2019 level, right? If it’s not today, we will we expect to see that probably in the next six to 12 months. So it’s more important than now than ever to make sure that we’re getting back into those, you know, some of the basic things that we used to do, and that is marketing and advertising. You know, advertising and marketing, luxury appliances, not only is it drawing consumers, but it’s a great differentiator for you versus the big box store. You know, if you combine that with talking about other categories that you sell the most expensive refrigerators, but also the most entry level dishwasher, right? So it really defines you and your local marketplace as the truth. So very important that people get back to doing some of the basic things that they used to do.

Mark Kinsley 

And John, whenever you think about marketing, luxury appliances, are you thinking about a combination of the retailer and the manufacturer, both spending marketing dollars to get in front of the consumer? Are you talking about marketing, and advertising toward the builders and the architects and some of those influencers that are going to have the connection with the consumer who’s going to buy the luxury of plants a combination of all that? How would you sort that out?

John O’Halloran 

I think it’s all the above right? So so the vendors luxury appliance manufacturers will in have continued to advertise and market to the consumer. But they also advertise and market specifically to we’ll call the trade betrayed customer, right, which is the influencer community, the builders, remodelers, kitchen designers, interior designers, the independent retailer, right should continue and follow the same type of pattern, right? You want to a lot of this business is done through retail. But there’s also a lot of this business is done in connection with the influencers, right, the kitchen designers, architects, as well as builders and remodelers, you know, and I would even say, moving forward as some of the retail business might start to slow down a little bit. Because of the uncertainty that’s going on. We expect that we’ll see probably more business happen with remodelers. Okay. You know, there’s a maturity factor going in the marketplace right now, where there’s a lot of homes that are 15 to 20 years old, that are about due for a makeover. Right? What do you think of making over your your home? What do you think of the first thing to do? Right? It’s the kitchen. Right? It’s outdated. Right? So, so there’s a lot of those types of different dynamics going on right now. Which makes it exciting time to continue to be part of the luxury segment.

Mark Kinsley 

Well, John, we’re Hey, thanks for taking us to school here today. And speaking of going to school, of course, you know, we introduced it with a lesson in luxury. It was a trivia question. Okay, so we’re gonna get back to our trivia question. Adrian, read it to us one more time. And I’m gonna let John put the exclamation point on this because he knows the answer.

Adrienne Woods 

I mean, okay, so what is considered the number one appliance blant brand, according to Yale appliance statistics As of 20, August to 2022. So is it Whirlpool? KitchenAid, or Samsung?

John O’Halloran 

So I’m thinking in overall dollars, if you want me to answer the question, yes. I mean, answer it. I’m okay. If I get it wrong. I’m sorry. I’m gonna say Whirlpool.

Adrienne Woods 

That is the correct answer. Okay.

Mark Kinsley 

All right. pressures on.

Adrienne Woods 

So basic, he won’t know like, he’s just not paying attention. But clearly you were there for the job.

Mark Kinsley 

Well, John, hey, thanks for being on the show. And thanks for helping us educate independent retailers on how they can beat the big box by marketing luxury appliances. This is something we’re covering quite a bit here on the fan Marketing Show, because it is a way to differentiate, obviously, there are bigger dollars, maybe a little more margin in that category, but it’s a different mindset. And so we’re trying to really kind of crystallise some of the thinking around how to get to the luxury appliances Space, and thanks to everything that nationwide marketing group is doing to support your dealers as we come back because I want to I want to talk to you next time about how you can specifically market to builders and designer so I gotta put you on the hook to come back and do another show with us.

John O’Halloran 

Absolutely, I’d love to thank you guys so much for having me on today.

Mark Kinsley 

Absolutely. Our pleasure. Say if you’ve got a marketing tip that worked for you reach out to us go to fam dot news and text us on our podium Number Be sure to subscribe and never miss an idea Adrian that can make you a

Adrienne Woods 

luxury appliance scientist with that

Mark Kinsley 

scientist and join us each week as we bring you more fam marketing magic

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