Aligning appliances with community

Valley Oak Home Appliance Center was made over from a Maytag dealer into a high-end appliance store, surviving the lagging economy and housing downtown.

It’s been a hectic two years for Jean Hawkins, whose Maytag dealership has changed into a high-end appliance store in the middle of a record housing slump in Northern California. The process entailed two store-wide remodels and a major shift in vendors, plus competition from a strong independent. Some might say that Hawkins and her family have been through the wringer. But Valley Oak Home Appliance Center has survived by aligning itself with the community it serves.

Elk Grove, Calif., with a population of just over 136,000 people, is both a small town and a suburb. Located only 10 miles from the state capital of Sacramento, Elk Grove was considered one of the fastest growing cities in the United States until the housing market imploded. It still has a western feel, vestiges of its days as a stage coach stop and a way station for Gold Rush miners. A giant pumpkin contest and festival is still one of the premier events of the year.

Hawkins and her husband Lyndon operated a Maytag repair service in Elk Grove for several years before opening a Maytag store in 1990. Four years later they moved to a bigger space, built a retail showroom, and called it Valley Oak Maytag. They joined the Chamber of Commerce and stayed active in local service organizations and youth sports.

Fast forward to 2005, when a rival Maytag dealer from Stockton decided to open five more stores—including one in Elk Grove. Maytag, now owned by Whirlpool, helped design the state-of-the-art showroom, a 5,000-square-foot jewel with dozens of working appliances.

Having two Maytag dealers in one town caused confusion, not to mention competition, and Elk Grove Maytag started losing customers. The Hawkins did a major remodel of their store and retrained their service department to repair the Whirlpool models as well as the Maytags.

Housing starts in the Sacramento area starting dropping fast in 2006, along with home sales. Appliance sales also dipped. The rival Maytag dealer closed one of his stores in 2007 and the remaining five—including the Elk Grove store—in March 2008, according to the Sacramento Bee.

By then, Hawkins had decided to end her exclusive arrangement with Maytag/Whirlpool and differentiate the store with higher-end appliances. She joined Brand Source, an appliance and electronics buying co-op, which gave her access to Bosch and Fisher & Paykel. She added the upper-end offerings from Maytag and Whirlpool, names like Jenn-Air and KitchenAid. Wine chillers, trash compactors, and DCS grills were added to the mix.

Revamping the product offerings required another store remodel, and last fall, Valley Oak Home Appliance (as the store is now called) put in a showroom with three working kitchens. Professional chefs are coming in to give cooking classes and demonstrations.

Now it’s time to get the word out. Hawkins has begun an aggressive marketing campaign, with twice monthly newspaper inserts and weekly television commercials. At the center of the TV spots is the store mascot, a golden lab named Mr. Miles. “People come in looking for him,” noted Hawkins. (Nobody asks about the store’s cat, Mr. Maytag, who was left out of the commercials because he doesn’t like the publicity.)

Putting a dog on camera may seem small townish, but “that’s what this community wants,” Hawkins explained. When she talks about “relationship marketing,” it’s not the data mining operations that send targeted coupons to un-suspecting consumers. Hawkins and her family—her son runs the service department and her daughter-in-law serves as store manager—attend Rotary Club meetings and network with property managers. They build relationships face to face, and this has brought them through difficult times, she believes.

Hawkins also credits much of the company’s success to the service department, which employs six technicians and two installers. (All have been retrained, with help from the manufacturers, to work with the new brands.) Property managers and landlords rely heavily on Valley Oak’s service department to keep the appliances working in their rental units. And when a refrigerator or stove can’t be repaired, the technician issues a credit that can be used when purchasing a new appliance from the store.

This credit system also provides a foot in the door of residential customers. “The service customer, in time, becomes the new appliance customer,” explained Hawkins.

Valley Oak Appliance is developing relationships with remodelers who refer clients to the store, and vice versa. Kitchen makeovers are not what they used to be, Hawkins observed, but there are some flecks of gold in the current spate of foreclosures around Sacramento.

“It’s not uncommon for appliances to disappear from the house [during foreclosures],” she noted, “and the new owners have to replace them.” Stricter lending standards are also giving appliance sales an unexpected boost. “One couple just bought a range from us because the FHA wouldn’t approve their loan without one,” Hawkins recalled.

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