Hoover Customer Solutions Group Targets Vac Diversity

NORTH CANTON, OH-—Hoover’s recent formation of a Customer Solutions Division, headed by company veteran Duane Peiffer, is a move aimed squarely at increasing diversity of retail assortments in an environment of increasing consolidation. “Unless we as manufacturers proactively assist our customers in differentiating their assortments, they will out of necessity evolve into a homogenous approach to selling floor care,” said David Baker, vp/marketing at The Hoover Company. “I think very strongly that retailers’ desire is one of differentiation. It’s incumbent upon the supplier side, particularly the leaders on the supplier side, to serve them the opportunity of differentiation so they don’t have to rely on price.” With the retail environment continually evolving toward one of fewer and larger retail chains, direct competition within individual markets and on individual items has become increasingly commonplace. The pressure for retailers to exceed previous year’s sales each season has grown exponentially. As a result, retailers have become increasingly focused on carrying items with a proven track record and as a result, often items that are found in other stores. “If we have twelve uprights, a lot of the masses are unable to carry all twelve, so why do they all carry the same five?” Baker said. “If we as a supplier can afford them more options all the way back into product development and design then the better off our customers are going to be.” It is this goal that underpins Hoover’s creation of its new Customer Solutions Division. From product development on the front end to promotion, advertising and merchandising in-store, the new division will focus on helping retailers to better differentiate their assortments, without sacrificing sale opportunities. “What we’re trying to do here is seek mass customization,” said Baker. “If the hot button is bagless WindTunnel, then I have two or three different value propositions within the WindTunnel bagless product, providing more options to our customers.” Hoover’s effort to focus retailers on product differentiation comes at a time when price has become an increasingly thorny issue for manufacturers and retailers alike. The emergence of a substantial market for $49 uprights last year has spurred a proliferation of $49 models in retail ads. Retailers as diverse as Kohl’s, Sears and Target have all promoted units at that pricepoint this year. And a number of industry experts have suggested increasingly stripped down models, aimed at hitting increasingly aggressive pricepoints, could accelerate this year. The proliferation of bagless uprights, and the feature’s popularity with consumers has also served to bring down pricepoints of other upright segments as well. However, top of the line uprights continue to do well, suggesting that if consumers are presented with the opportunity, and the value is presented appropriately, there is substantial opportunity to shift competition from one focused on price to one built around presentation, feature composition and execution at point-of-sale. “We as an industry have a lot of opportunity to improve our in-store experience,” said Baker. “This is one of the responsibilities of our Customer Solutions department.” Baker explained the company’s goal in creating the department as one of understanding and responding to consumer needs not only on a national but a regional basis. “Even within regions there are differences,” said Baker. “From one zip code to another you can have a demographic base that can vary dramatically. Within that base there are various consumer tastes and consumer needs whether it is at high pricepoints or at lower ones.” Baker indicated the creation of this new department was not an end but a beginning of a process built around creating a new culture, both within Hoover and ultimately for the retail community. In choosing Peiffer to head this new initiative, Baker indicated the company sought someone with a wide range of experience both in dealing with customers, but also in understanding the product development and distribution cycles. “Duane has a great background for this,” said Baker. “He’s been in sales for the better part of a decade. He has a good understanding of the differences between our customers and their needs. He also was a market research director and a product manager of uprights.”