Don’t risk it – sell brands you trust

Swift Electrical’s commercial director Malcolm Scott on the benefits of sticking with big, trusted brands, especially in the event of a product recall or safety notice, not to mention some attractive warranty deals for bricks-and-mortar outlets

Most kitchen studio businesses take significant financial risks daily without realising the possible cost. There is a very important area of their business where they could hugely increase customer service levels and make consumers feel that they have been given a first-class service, without incurring any real costs. So bear with me.

Appliances are a big part of total sales for most studios and there are some very big dos and don’ts. Many large builders have realised that if, as part of a customer care package, you register the appliances sold to a consumer with the manufacturer under the normal guarantee scheme, consumers rate your service levels much higher.

The percentage of consumers who register a complaint about a new home within the first two years drops noticeably when the customer service department simply registers the appliances in the home on behalf of the consumer.

The General Product Safety Regulations 2005 Act covers the issue of safety alerts and product recalls if a systematic fault occurs with an appliance model. Amdea, the appliance manufacturers association, has been working closely with Government departments to try to promote the benefits of registering appliances at the point of purchase.

There are more than 26 million homes in the UK, all with at least three appliances, most with more than five. That’s a total of 130 million appliances in everyday use and most are currently completely untraceable if a systematic fault does develop on a specific model.

So why does that mean a risk for the kitchen retailer? Well, put simply, appliance failures are assessed by the regulating authority in terms of how serious the fault is, and how serious the risk of fault is. Where there is a low likelihood of a fault developing and of that fault posing consumers any serious risk, manufacturers are required to issue a simple safety notice, which highlights the issue and asks consumers to be vigilant.

Where the risk of fault is high and the risk of damage or injury is high, a full recall can be instructed. On appliances made by a big company with UK offices, the risk rests entirely with the manufacturer. However, on private-label appliances, unbranded appliances, or appliances from smaller manufacturers, the risk might well pass to the retailer.

Taking the example of the recent Whirlpool Group safety notice on tumble-dryers, Whirlpool Group identified the models likely to be affected and mounted a very costly, national advertising campaign to highlight to consumers that there could be an issue with some of their models, if not used and maintained in accordance with the product user manual.

Whirlpool followed that up with 3.5 million individual letters, resulting in 1.4 million consumers registering for a free safety check. To achieve this, Whirlpool increased the staffing of its call centre by 93% to 963 operators and increased the number of engineers it employs by 37% from 1,031 to 1,408 engineers.

The Whirlpool Group literally ‘moved mountains’ to protect its great reputation with consumers and spent millions of pounds ensuring that a simple safety notice of low risk of incident with low risk of danger did not inconvenience any of its retailers, distributors or consumers. A great job, Whirlpool, well done!

BUT… the point is, this was a low-risk issue and not a product recall. If a product recall occurs on an appliance made by any manufacturer, the costs could be much higher. With groups like BSH, Electrolux, Whirlpool, Beko and Hoover Candy, the cost of a full product recall would be a blow, but would not be unmanageable.

For a private-label operator, things could be very different and retailers could find that they are legally liable to pay costs that a smaller brand could not meet. So, simply by selling one unbranded dishwasher a week over four years – not a big number – at a likely recall cost of over £250 per unit, the bill would soon be £50,000. Now that is a big risk. Make no mistake, if the manufacturer is not insured, and cannot pay, the retailer must.

But every cloud has a silver lining and there are actually great opportunities for retailers who simply stick to big brands and who register their sales on behalf of the consumer.

What a great sales message in store – ‘we complete all the registration for you and ensure that the guarantee is in place and activated and, unlike some big internet sites, we don’t then try to sell you a guarantee – it comes free when you buy from us’.

This message is particularly relevant when the retailer selects one of the ever-increasing selection of brands that offer extra free guarantee cover when you buy in-store. On Linea kitchen studio products from Smeg, for example, the standard guarantee is 12 months online and five years in-store, on Whirlpool built-in it is currently 12 months online and three years from a display outlet. On selected Stoves built-ins it is currently 12 months online and three years for a display outlet.

And with safety recalls and notices, the liability can be for the entire life of the product, so a 10-year parts guarantee from someone like Whirlpool greatly reduces risk in later years. If there was a major product recall of a typical seven-year-old unbranded oven, retailers would quickly find out that sometimes after just five years, parts are no longer available. Then a replacement product becomes the only option.

Be clever, sell brands you trust, and register your customer with the manufacturer, all have simple website registration – take a few minutes to greatly improve customer service.

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