Gorenje hits out at appliance industry

Gorenje

Gorenje sales and marketing director Bill Miller has slammed ‘influential’ brands for making retailers lose interest in selling appliances.

Speaking exclusively to kbbreview, Miller expressed his concerns that a lack of margins and exclusivity have killed front-line retailers’ enthusiasm for selling appliances.

“The activities of a number of influential brands have made a lot of retailers very uneasy. Retailers see a sea of competitors they just can’t compete against in the market, the internet being a major one, and I don’t think many believe what manufacturers tell them anymore because, in my opinion, they have made some big mistakes.

“Many independents have almost lost the will or the art of selling appliances. Their enthusiasm has gone because the perception is that they don’t stand to make money selling appliances anymore. A lot of retailers have got into the mindset that unless they sell appliances at cost, whichever brand they’re selling, then they don’t stand a chance of getting the sale.”

Miller, who joined Gorenje eight years ago from Miele, also blasted the appliance industry for confusing retailers with unrealistic terms and proposals.

“Some brands have told retailers directly ‘this product is for you [the independent retailer]’ and it won’t be available to anybody else, yet within months that product becomes available elsewhere. Retailers have heard it time and time again. There are also brands that don’t seem to know what their strategies are. One week they’re focused on the sheds, and the next week they’re focusing on independents.

“For a retailer joining our market today, wondering which brand to display in his showroom, I think it’s a tough call. Where do they put their money and their loyalty and their support? How can they be sure that the brand they’re supporting and buying into today is going to be the same brand in a month or so?”

Miller’s comments come after two recent kbbreview round tables highlighted a growing dissatisfaction among independent retailers for appliance sales.

Speaking to kbbreview at a round table held at the Quooker HQ in Rotterdam, Geraldine O’Donoghue, appliance expert with In-House Kitchens and Bedrooms in Dublin, shared retailer concerns that there was little margin to be made on appliances. “Manufacturers don’t think about margin,” she said. “We make the effort to sell Siemens and Miele but people can go to [department stores] instead. The only reason customers come to us is the after-sales service. You have to work hard and you really don’t get enough margin for the effort you put in.”

Mark Shortt, owner of kitchen business Houseworks in Dublin, agreed. “There’s no point doing business unless you’re making a margin,” he said. “Your margin on appliances should be 25% but how many of us get that? I get more from Gaggenau, and Miele is protected because of the way it’s marketed in Ireland. But the other appliances are hardly worth selling, I can’t make any money on them.”

During another recent round table, a leading retailer told kbbreview that competition from internet retailers and a lack of support from suppliers to help independents combat internet discounting caused his interest in selling appliances to dwindle and forced him to abandon allegiance to any brand.

Eddie Drummond, owner of Drummonds Kitchens in Leeds, told kbbreview: “When I first started out 10 years ago, I was a big fan of Rangemaster and I was really passionate about Bosch, but then the internet came along and suddenly my customers could buy Rangemaster on the internet for less than I could buy it for from my suppliers.  I’ve just lost any brand loyalty and when it comes to appliances, I’ve kind of lost interest.

“I don’t push any particular brand anymore because I don’t feel any of them have helped me as a retailer. Why should I look after a brand and push a brand if they’re not willing to support me? It’s a two-way thing. If I knew I was going to make a profit on a particular appliance, then of course I would go out of my way to push it to a customer. I used to make £300 on some range cookers, but now I’m lucky if I make £50.”

For the full interview with Miller, see the January 2013 issue of kbbreview.