While the housing crash has hit appliance providers as hard as it has hit home builders, it also has offered more of an opportunity to compete for bigger shares of what market remains.
Builders have been streamlining their businesses for the sake of cost savings and efficiencies, whittling down the number of floor plans, the variety of materials and options they offer, and, in the case of appliance providers, sometimes choosing to go with one exclusive provider rather than two or more.
"In this down time period we have found for a number of years that builders are questioning what they have been doing in the past," said Tom Halford, Whirlpool Corp.'s general manager, contract sales and marketing. "So they are open to change. There is an opportunity that allows us to share our voice with the home builders."
And more have been listening to and buying Whirlpool's sales pitches. "We are up nearly 50% in single-family, new-home construction [market]] share since 2008," Halford said. "It's pretty fragile still. We are still having to deal with price advantages."
Of course, along with the opportunity to gain market share comes the possibility of losing it as well.
"Somewhere along the line here there are going to be winners and there are going to be losers," Halford said. "It's just the outcome of a competitive environment. Right now we are fortunate to be very competitive."
That the current environment among appliance manufacturers to gain builder business is competitive is something Matt Rose, general manager of GE Appliances & Lighting's contract sales division, agrees with. GE says it remains the No. 1 supplier of major appliances to U.S. homebuilders.
"It's definitely a competitive marketplace and probably has never been more competitive," he said.
In the past year, GE's and Whirlpool's announcements of new exclusive agreements to provide major production builders' appliances have been popping out like dueling front-runners in a horse race.
In late August, GE announced it had signed up Lennar Corp. and Clayton Homes, the largest manufacturer of modular homes in the U.S., to exclusive four-year agreements.
In early October, Whirlpool announced Mattamy Homes and PulteGroup had signed up for "multi-year" exclusive agreements with it.
On Thursday, GE announced it had signed an exclusive three-year appliance provider agreement with Ryland Homes. Rose said it has signed an exclusive agreement with D.R. Horton as well, but hasn't issued a news release yet.
GE's Rose says the company hasn't really changed its message much in response to the competition.
"We are kind of sticking to our principles, which really is our value proposition," he said. "It's one that they seem to respond to." That's especially true in a market place where builders are looking to cut every dime they can out of costs.
GE also pushes its product quality, delivery network, and the fact that it provides its own in-house service technicians. "Some of our competitors have outsourced that to third parties," he said.
Meanwhile, Whirlpool is pushing the breadth of its brands which ranges from its starter Amana brand on up through Maytag to high-end Jenn-Air and KitchenAid brands.
"Whether it's a first-time buyer or a fifth-time buyer, we've got brands to fit all those consumers," said Halford. "We have the right brands (for different types of) builders, but also for the different types of homes within a builder" portfolio.
"We wouldn't be successful in this industry with one brand because eventually it would come down to is price competition," Halford said. "Though we have to compete on price, we have to compete beyond price."
Here is a list of some of the major builders Whirlpool has signed in 2010:
- Horton Homes
- Mattamy Homes
- Ashton Woods
GE doesn't provide complete lists of its clients, but did offer this list of its recent large contracts:
-NVR (Ryan Homes)
-Richmond American (signed in '09)
-Meritage (signed in '09)