Maytag Corp. is using the Internet to bolster its share in the appliance market, finding a solution to the high-wire act of selling online without alienating its retail channel.
While the appliance maker is unwilling to disclose actual dollar figures, it claims that sales on Maytag.com have exceeded company expectations by 35 percent since the site started selling to consumers Jan. 31.
The e-commerce function is part of a Maytag strategy to allow consumers to research and buy from the same site. This addresses a key concern for the Newton, IA, company.
“What's happening is that the consumer's being switched off by the time they buy on the sale floor or wherever they're purchasing the product,” said Ken Boyle, vice president of e-commerce at Maytag.
“So, if they're buying into our brand, they're ready to buy,” Boyle said. “We've seen it in research that people are coming to our site and they're clicking at the exact make and model and printing brochures and taking it to the retailer. So how do you drive conversion to transaction?”
In line with that thinking, Maytag has created an online store that allows consumers to shop for home appliances, including washers, ovens and refrigerators.
Online consumers can select appliances and place them in a shopping cart. This cart is moved to the site of a local Maytag dealer, based on the ZIP code entered by the consumer. The retailer then fulfills, delivers and installs the product.
“What we're doing is taking that demand from the consumer online,” Boyle said. “We put it in the shopping cart on Maytag.com and, at that point, the consumer can look at pricing, availability, value-added services like haul-away, delivery and installation on our Web site for each retailer.
“Once they pick the retailer that they want,” he added, “we just seamlessly behind the scene with this Comergent technology pass it directly to the shopping cart of our retail partners.”
This way, Maytag avoids antagonizing its retailers.
“We do a pretty thorough job in our product supply, in getting appliances to our retail distribution centers,” Boyle said, “but it's the last 3 feet, serving the customer and installing the product, that is difficult. It's not our expertise that we presently have at Maytag.”
The company claims that the average online sale is more than $1,000 — double that of bricks-and-mortar stores. More than 70 percent of the products sold are priced at $599 or more.
Top sellers on the site are Maytag's $1,400 Neptune washer and the Wide-By-Side refrigerator. Two out of three Maytag.com buyers are college-educated women age 35 to 55, with an average annual household income of $50,000.
Also, nearly half of the orders are placed outside normal business hours, thus helping the 3,000-plus Maytag dealers that have signed up to participate in a new customer acquisition channel.
Now, the manufacturer plans to provide e-commerce capabilities at sites for Maytag's sibling brands.
“We'll use these same digital assets for Jenn-Air in June,” when it goes e-commerce, Boyle said.
Maytag will soon introduce news of its online store in regular print and television advertising.
“We're looking at making quick delivery a part of our marketing message in traditional advertising,” Boyle said.
And while it has found an online solution to selling directly to consumers, Maytag has yet to get that comfort level with advertising on the Internet.
“We do e-mail campaigns with our partners and retailers and have never been much for online advertising [to consumers],” Boyle said. “We feel that consumers are in the market every 12 to 15 years, so it's not like a book or CD or online ticket, and we didn't feel like the online ads were appropriate.”
But there is little doubt that the Internet has become a critical component of Maytag's growth strategy.
“The challenge [for Maytag] is to shift share in the marketplace,” he said. “So, we're No. 1 in brand awareness and No. 1 in brand preference, but we're No. 3 in market share.”
Indeed, the $4.3 billion Maytag lags behind Whirlpool Corp. and General Electric Co., which are No. 1 and No. 2, respectively, in the domestic appliance market.
According to Maytag research, some 11 million consumers in the United States have visited appliance Web sites. Maytag.com receives an average of 450,000 to 500,000 unique monthly visits.
“And actually of those 11 million [consumers], 7 million consumers purchased exactly the same make and model from their online research,” Boyle said. “If they were purchasing the exact make and model from their online research, we thought this was a great model to capture that.”