Ever since appliances became household fixtures, enterprising minds have been hard at work on ways to improve upon style, performance, and efficiency. And each year, builders continue to look for ways to profit from appliances that pack the right innovative punch.
For Del Webb, in Las Vegas, that has meant raising the bar on its standard kitchen appliance package in the past year. One reason for the shift is that the houses themselves have become more costly. "We've seen building costs increase from 17 [percent] to 24 percent," says Jeff Galindo, senior sales manager at Sun City Anthem, in Henderson, Nev., where home prices range from the mid-$200,000s to the mid-$400,000s. "Our market studies have shown that if you're charging more for a house, you ought to have something nicer to offer in the way of appliances, and buyers are willing to pay."
Offering a higher-quality standard appliance is a better strategy for both the builder and its buyers. In the past, Del Webb provided a basic slide-in range and a large menu of more expensive models available from General Electric. Buyers would consistently upgrade, but they weren't always happy with their choice, and the sales process was cumbersome, noted Galindo. "Our reputation is tied directly to customer satisfaction," Galindo says, "and what we delivered was often something different than what they had in their minds." Now, about 40 percent of buyers upgrade from a standard sealed four-burner cooktop to five burners, and from a microwave to the Advantium speed-cook oven. Stainless-steel finishes and custom-style refrigerators are also popular.
At Hovnanian Enterprises, major appliances come from Whirlpool and Kitchen Aid. Lannie Foster, sales manager for Hovnanian's home design gallery in Edison, N.J., says that in high-end homes, which feature what the builder calls its Epicurean kitchen, most buyers add luxuries such as warming trays and wine refrigerators. In the middle market, active adults want the wall-oven upgrade and a refrigerator with a bottom-mounted freezer. Entry-level buyers typically choose a combination microwave/convection oven. "It's about lifestyle," Foster says. "That's what we sell here. People today are looking for things that make it easier to prepare that quick meal and that don't run up the electric bill."
Hovnanian keeps its selections plentiful and it prices competitive to capture and hold the customer's interest. "One of the things we offer that they really like is the one-stop shopping," says public relations director Doug Fenichel. "Anybody who's checking is going to find what we offer is almost always the top rated in terms of quality and performance. They do as well here as they could do elsewhere if they were allowed to take their allowance and go shopping." Whether the house costs $150,000 or $1.5 million, buyers have access to virtually the complete line of Whirlpool and Kitchen Aid appliances. "Smaller homes may have limitations with the size of appliances, but we try to offer something that has all the bells and whistles in those smaller sizes," adds Fenichel.
Demand for the sleek professional look, and the heavy-duty performance it suggests, appears stronger than ever at the mid- as well as the luxury-priced homes.
Village Builders, a Houston-based division of Lennar, offers stainless steel appliances as standard in the mid-price market. Ranges can be swapped out for a cooktop with sealed burners or a smooth-top electric model. "Our standard package is pretty good, so maybe 25 percent of our mid-line buyers upgrade," estimates Stephanie Mehra, design studio manager.
Meanwhile, Judy Hipp, director of design operations for Taylor Woodrow Homes, in southern California, says its upper-end products--in the $2-million range--offer Wolf ranges and Sub-Zero refrigerators as standard with options for upgrading to features such as Wolf's dual fuel range. "Both companies have some very exciting and high-performance appliances, and their customer service is one of the best I have encountered, so I feel comfortable offering them to our homeowners," Hipp says. In the mid-price points, the builder has just begun offering Dacor ranges, whose continuous-temperature ovens appeal to people who like to bake.
But design innovation continues to inspire consumers and give builders new opportunities to upgrade buyers.
Dale Garwood, director of national accounts at Whirlpool, says the market for its Duet washer and dryer has been growing by double digits year after year. "The Duet laundry is performing well because of what it offers in service and energy savings, and it's innovative," he says. "Consumers are seeking innovative products that provide value to them."
But vendors are also trying to respect the demands of high-volume builders. Maytag offers upgraded appliances that show demonstrable differences in performance, while slipping into traditional kitchen and laundry layouts. The Gemini range, for example, whose two ovens can be used simultaneously, doubles the price of a standard slide-in range but occupies the same 30 inches of space. "In our research with home buyers, we find they use the smaller upper oven 80 percent of the time," allowing them to save on utility bills, says Larry Nepple, Maytag's national director of builder operations. Other hot sellers include its refrigerator with bottom-mounted freezer, a three-rack dishwasher, and the Neptune washer and dryer. This year, Maytag will introduce the Neptune Drying Center, a dryer unit with a cabinet above for spreading out delicate clothing to dry or remove odors.
In specifying appliances, builders say they are looking for the same stellar qualities as consumers, plus strong brand recognition and a solid track record on service. According to a Big Builder study to be released this spring, builders cited brand recognition as the most-used criteria for specifying appliances (37 percent of respondents), followed by perceived value to the buyer (27 percent), dependable warranty (25 percent), and price (23 percent).
Appliances are major players in how a house looks and how well it lives. And because appliances are as much about self-expression as they are about performance, a well-rounded package is critical for a builder to offer, notes Hipp.
"I believe homeowners in all price markets expect the same things when they purchase appliances," Hipp says. "They want appliances that are dependable and look great. Pricing is always a consideration, but if they see the benefit, they will spend the extra money." That puts the burden on builders to offer smartly designed appliances, but ones that perform as promised.
Series 1: Homes from 1,496 to 1,712 square feet.
Slide-in range and appliances with greater energy efficiency.
Price Differential: $365; $665 for all stainless steel appliances.
Series 2: Homes from 1,840 to 2,391 square feet.
Wall oven; cooktop with sealed burners, simmer burner, and continuous grates; appliances with greater efficiency and more features.
Price Differential: $1,140; $1,755 for all stainless steel appliances.
Series 3: Homes from 2,592 to 3,175 square feet.
Designer series appliances, including a five-burner cooktop and appliances with added features and energy efficiency.
Price Differential: $1,035; $1,765 for all stainless steel appliances.