Appliances and the independent

A Sioux City, Iowa, dealer displays the art and science of big-ticket sales.

At Kruse True Value, appliances offer walk-in customers plenty of sight lines.

Hartington, Neb., lies 60 miles west of Sioux City, Iowa, and 20 miles south of the South Dakota state line. This town of 1,600 people in the northeast corner of Nebraska has been the home of Kruse True Value since April 1990. Gary and Lisa Kruse purchased a Hardware Hank location and changed their affiliation to True Value to establish their own image and reputation.

Prior to purchasing his own store, Gary worked 12 years for his uncle selling and servicing appliances. That experience convinced Gary and Lisa to broaden the traditional hardware offering from the previous owner, adding televisions and major appliances, among other new lines.

They believed by diversifying their offering, their store would become a destination for much more than traditional hardware items. Gary initially took on the Maytag brand, but has since added Whirlpool, Amana and KitchenAid to his offering. He can now cover a wide variety of price points to meet the needs of his customers.

In 2001, Gary and Lisa determined that they had outgrown their current location and built a larger store that would better suit the expanding business. They considered moving from their downtown setting to a location on the edge of town that was near a highway. In the end, it was determined they would lose much of the “walk-in” traffic they currently enjoyed, so they stayed in downtown Hartington.

The new, larger building allowed Gary to move the appliance showroom up from the basement to the main floor. In addition to the benefit of an expanded display space, this new arrangement improved the visibility of the appliance offering. Customers who enter the store become aware of the appliance category — a major improvement from the out-of-sight, out-of-mind merchandising in the previous store. Accessibility also improved, as the stairs that led to the basement showroom made it difficult for some elderly customers to navigate.

From his previous experience in appliances, Gary understood the value of providing after-sale service to his customers. His new location has a service bay and his team is able to provide in- and out-of-warranty service for the items he sells. Customers can buy with confidence, knowing Gary’s team will be able to keep their appliances in good working order.

With the growing success of their appliance business, they decided to remodel the store in 2015 and move the appliance display from the back to the front, ensuring anyone who walked in would know immediately that they were in the appliance business. At the same time, analysis of the mix of his sales showed a solid growth of higher featured items being sold from both the Whirlpool and Maytag brands. Gary’s SalesLink representative suggested he consider adding the KitchenAid brand of appliances to further diversify his assortment and offer more premium featured items.

Kruse True Value now displays 60 appliances, and it has a back stock inventory of 20-25 units. Since 85% of appliances purchases are made when the appliance fails, the customer generally wants to get the replacement immediately, rather than wait for a new order. Gary will even sell the display model off of the floor, in order to fill the customer’s need right away.

Kruse True Value is just one example of an independent hardware store that has enjoyed the benefits of appliance retailing. There are many others. Some industry observers feel the trend is gaining momentum for several reasons. First, major brands have designed programs specifically for independents. There’s an opportunity for the independent dealer to leverage its local reputation as a trusted service provider. And, more recently, the closing of stores at appliance-focused national retailers opens the door for other retailers to fill the void.

 

Selling Points

The Kruses point to the following elements of their success in their market:

  • Offer a diverse assortment of product features and prices to cater to all types of customers.
  • Help the customer find what they want, versus steering them to a specific item.
  • Service the items they sell; give the customer confidence that they will be able to keep the item operating long after the purchase.
  • Locally owned, locally operated. You are buying from a trusted friend.

For more information, visit hardwareapplianceprogram.com.

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