Builders who choose appliances on price alone may be overlooking powerful profit opportunities, such as packaging and marketing unique features, upgrades and innovative placement.
The Viking Designer Series appliances are integral to this kitchen design where each element complements another.
The Viking Professional Series caters to homeowners who want commercial-grade appliances. Viking offers 13 finishes plus stainless steel, brass trim and several different looks within its Professional and Designer Series lines. These products are interchangeable – the same cutouts – so no change-orders are required.
Viking sealed burner gas ranges makes for easy cleanup.
The market has seen an explosion of new appliance brands, models and features. No wonder builders are finding it hard to keep up.
It is imperative that builders familiarize themselves with the newest cutting-edge appliances if they want to pocket some extra profits. But first, they may have to revise their thinking about appliances and their profit potential in general.
"I think the biggest problem builders have when choosing appliances is making honest comparisons among competitive models and brands," says Art Johnson, national builder manager for Maytag Corp. "They often revert to simply comparing prices and fail to consider other important factors."
Builders who generally support product upgrade and option sales to homebuyers are likely to think of appliances as a profit center, according to Johnson. "But builders who offer a very standard product with no selection tend to limit their thinking to costs only."
Larry Ferguson, director of sales and marketing of Marvel Industries, suggests that builders fail to appreciate the profit potential of appliances largely because "the price points on mainstream brands and models are well-known and readily available for comparison due to the broad competition that exists in the market."
The Wow Factor
Consequently, builders fall into the trap of offering buyers a ho-hum selection. Standard options and upgrades may be workable, but they may not push a buyer over the line.
"Often, builders 'under-appliance' the home," says Ferguson. "The home then takes longer to sell due to the lack of the 'wow' factor, and the builder ends up paying interest on his money longer, due to the delayed sale. But the right high-end appliances placed in the right places – a long way toward creating the 'wow' factor."
Builders who encourage upgrades drive increased revenues and profits. But to do that, they must be well-versed in appliance trends. If you're feeling a little behind the times in appliances, here's a quick primer on the hottest trends.
"The demand from consumers to have a full, matching kitchen is getting stronger," says Bob Woods, vice president-sales for Viking Range Corp. "Consumers want their countertops to match, as well as cabinet doors and tiles. They are now looking at appliances in the same light and want to have design integrity there as well – be it an all-stainless kitchen or an integrated one."
Maytag's freestanding Double-Oven provides a total of 5.22 cubic feet of usable oven cooking capacity - 1.22 cubic feet in the upper oven; 4 cubic feet in the lower oven. The second oven provides more space when extra capacity is needed, and because it preheats in half the time, it's a more efficient choice for consumers who don't need the larger oven space.
When it comes to the range, the trend is toward sealed, high-powered burners on commercial-type appliances. "The allure is the ease of cleaning the sealed burners without having to sacrifice performance," says Woods.
Another overriding trend is toward built-ins, says Maytag's Johnson. "But due to remodeling costs and space constraints, freestanding ranges continue to dominate the kitchen: 85 percent of all U.S. homes have this configuration," he says.
Built-ins are out of reach for most builders due to the customization they require, but there are alternatives. Both Maytag and Jenn-Air have double-oven, freestanding range designs that offer the performance and capacity of commercial equipment, but with the space-saving convenience of a freestanding range. Both fit into the space of an ordinary 30-inch range, so builders can just as easily slot these appliances into homes without changing the standard kitchen layout.
Think Beyond the Kitchen
Once you have the kitchen outfitted with appliances, why not consider the rest of the home? Go for the "wow" factor by installing more high-end appliances where they would not ordinarily be found; for example., the den, the library and the master suite – wherever they can add to the homeowner's convenience and sense of pampering.
"Convenience is what today's luxury homeowner wants," says Marvel's Ferguson. "The freedom to place refrigeration where it is needed without compromising the design statement of the room opens up endless design possibilities."
UPGRADES WITHOUT CHANGE ORDERS?
If appliances are so popular among consumers, why are builders ignoring them? "Options tend to cause builders the most problems," suggests Bob Woods, vice president-sales for Viking Range Corp. "When a consumer makes a change to an upgrade or requests a different option, it can cause several change orders to be sent out."
The key is for manufacturers to offer options with the same cutouts that eliminate the need for change orders. Viking is among the manufacturers who do this.
It's "great for the builder, and the customer gets to make their own look, which is what they are looking for," says Woods. "Offering options without the need for change orders is a great way to increase the profit on a kitchen."
Also, with the increased size of homes today, homeowners don't want to walk the length of a football field for a glass of water in the kitchen, when they can simply enjoy a glass right from their master-bedroom beverage area.
This trend explains the popularity of Marvel's new Chateau Collection of under-counter, refrigerated wine cellars. Their unique ebony interior "has allowed homeowners and designers to take under-counter refrigeration out of the kitchen and into the bar, bedroom, family room and many other areas of the home where appliance-white would not be aesthetically pleasing," says Ferguson.
"The ebony interior lets the beauty of the overall design statement of the room come through, without the distraction of the white interior of an appliance."
The Chateau Collection wine cellar offers a sleek design with an ebony interior, combined with glide-out wine shelves that extend fully with the door opened only 90 degrees. The Chateau Collection is offered in three sizes, with eight potential door styles and wine shelves that feature elegant wood fronts that can be customized to match any room decor.
The new Maytag Neptune® Drying Center™ pairs a tumble dryer with the convenience of an upper drying cabinet that minimizes shrinkage, speeds up the drying process, reduces wrinkles, eliminates odors and refreshes clothes - saving time and money.
Consumers want more convenience in utility areas like the laundry room. That's where new multi-purpose appliances come into play, too. Maytag's Neptune Drying Center has an upper drying cabinet for delicates and a full-size tumble dryer below. Users can hang- or flat-dry up to 13 shirts and sweaters in a few hours.
Maytag's Johnson suggests there are three ways for builders to increase the profitability of appliances.
First, offer more of the appliance products that buyers want, in keeping with the latest trends. "It's so easy to find out what consumers are buying at retail," he says. "They want the best-looking, most innovative appliances that make their lives easier and their kitchens striking. This is also what they want from their builder. What's more, these innovative high demand products are also more profitable."
Need some expert advice on appliance trends? Turn to the appliance supplier. He can provide important consumer research.
Secondly, Johnson suggests builders strategically plan upgrade packages. "When you buy a car, you get the luxury option that includes both the CD player and the moon roof," he points out. "Sell upgrades the same way: Tie them all together. Builders can achieve higher gross margins on appliances sold as packages."
Lastly, builders must price "sho ppable" options competitively. "If you don't include a refrigerator or a washer-dryer pair as standard, make sure that your price to the buyer is reasonably close to the price in the retail marketplace," advises Johnson.
Marvel's Ferguson suggests builders build appliance profits "by incorporating unique products that make their homes known for their special features and distinguish them from their competitors. Home buyers remember and focus on the little extras in homes, such as luxury appliances in various rooms, as well as the appliances' unique features."
By recognizing that uniqueness in the features, placement in home plans and the overall packaging and merchandising of appliances, builders can in turn parlay this into a marketing advantage to make buyers say, "Wow!"
Viking offers outdoor appliances as well as stainless steel cabinetry to meet the growing trend toward outdoor kitchens.
Check out any of the home improvement and design magazines or cable shows and you can't miss a story on outdoor kitchens. When a simple barbeque just won't do, patios come equipped with refrigeration, separate cooktop burners, smoker ovens, gas ovens as well as the barbeque grill.
"This is certainly a lifestyle choice that drives home the point that the backyard is not the backyard anymore. It's just another room in the house," says Bob Woods, vice president-sales for Viking Range Corporation.