Heavy Promotional Discounts in Appliance Industry Due to Change

Despite the lingering effects of the recession last year, many appliance manufacturers and retailers had reason to cheer. In 2010, sales were driven in large part by a well-​publicized federally funded rebate program. States administered the actual rebates and the promise of getting a good deal lured many consumers into the market. As a result of that traffic, sales will probably not bump up again in this industry until later this year.

A report published in TWICE noted that two large buying groups believe sales of major appliances will rise in the second half of 2011 and the entire year should end with an increase of between 2–3% over last year. Adam Thomas, an appliance marketing vice president for Nationwide Market Group, a large buying concern, believes that major holiday periods are bringing about heavy promotional discounts in the major appliance industry. This discounting was ‘too broad and too deep’ in 2010 and he expects stricter limits on promotions this year. These limits will entail fewer models being heavily discounted. However, retailers have found that up to 30% of appliance sales are done “in the 65 to 70 days that comprise the big holiday windows.”

As with many industries this year, retailers will have to pass along price increases in the major appliance industry. These increases will likely average between 8–10%. However, the industry remains intensely competitive as independents battle for market share against heavy discounters like Home Depot. At the same time, some manufacturers are instituting polices regarding advertised prices in order to make sure online competitors are playing by the same rules as traditional retailers.

Industry experts expect refrigerators with the French door format and high-​efficiency top-​load washers will continue to be good sellers in 2011.

All of these factors will drive marketing and advertising campaigns for major appliances which will increasingly be promoted during the holiday season.

[Source: Wolf, Alan and Smith, Steve. Buying Groups Foresee 2nd-Half Uptick For Majpas. TWICE​.com. 7 Mar. 2011. Web. 29 Mar. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.