32: On the Challenges Appliance Retailers Face, with Grant Morgan of TWICE

Written by Rob Stott

July 28, 2020


Appliance retailers across the country have had their fair share of obstacles to overcome over the past year, from tariff concerns, to coronavirus, to inventory shortages. We run through it all with Grant Morgan, senior editor at TWICE.

Rob Stott: All right, we’re back on the Independent Thinking podcast. Turning our attention to one of our trade media partners, really looking… I love chatting with trade media just because of the history of being in trade media, so it’s always good to chum it up with some old friends of the industry. So Mr. Grant Morgan, Senior Editor from TWICE magazine, appreciate you taking time out of what I’m sure is a crazy schedule over there, and coming on the podcast here and chatting with us.

Grant Morgan: It is crazy busy, Rob, but it’s great to talk to you, it’s good fun. I really like any time you or Amy giving me a call and just chatting about the industry.

Rob Stott: Yeah, we have some fun. So, obviously haven’t been able to have the fun in person, but we’ll dive into that in a little bit. But before that, for the audience out there, our listeners, obviously we’ve got some CE and appliance guys who I’m sure are very much aware of TWICE, but for the rest of the membership and listeners of the Independent Thinking podcast here, tell us a little bit about yourself and TWICE.

Grant Morgan: Well, TWICE magazine is a digital publication, and also print, you know, that old archaic media. We do one every month, and some of our highlights are our top 100 consumer electronics reports that just came out in June, we have our top 50 appliance dealers, the report that just came out, and that’s for sale too, but it’s really fun. I’ve been here for about a year, and my first introduction to Nationwide was in New Orleans. Now I grew up in Texas, but I’d never been to New Orleans, the closest I ever got was Houston. So that was fun, in the spring to head back to Houston and see everybody there.

But everyone’s just been so welcoming, and before I worked at TWICE, I worked for a site called Top Ten Reviews and I covered the consumer side of consumer electronics. That’s what everybody’s familiar with, and just finding out which ones are the best, testing them out and different things, and so I’ve been able to use that expertise. I’ve just been blown away by the other side, the retail side of consumer electronics. It’s amazing. It is such a community, it’s such a family, and everybody has competition and everything like that, but especially during these times, it’s been really heartening to see everybody pulling together. And so I never would’ve been able to do that if I hadn’t worked for TWICE.

Rob Stott: Yeah. I mean, it’s crazy too, because, I mean, obviously going back for those who know me, I worked in a similar space, we’ll call it the rival publication, Dealerscope to TWICE, right? But no, but covering that space, I think one of the things that really always stuck out to me was just the fact that, yes, it’s B2B, you’re talking to the retailer and covering the retail news. But when you really dive into that product side of things, so much of this industry, yes, it’s you have that trade media focus, but you’re still in consumer electronics, you are a consumer. It’s inherently about being a consumer, because everyone loves playing with the tech toys, whether it’s the big ones like TVs and speakers and home theaters and stuff like that, it’s a fun industry to cover. So inherently, whether you’re writing about it from the trade angle or the consumer angle, you’re always a consumer. Always a consumer.

Grant Morgan: Yeah, consumer first. My wallet and my wife are… They like that I know which ones to get, but at the same time, it’s like, “Hey, we should get this.” She’s like, “No.”

Rob Stott: Right. The ups and downs of coming home from CES with a laundry list of things that you want to add to your home.

Grant Morgan: Oh man, if I could get that giant screen television on a, it’s hidden under a deck, to come up… I was drooling like a kid.

Rob Stott: Oh no, too much fun. Well, we say fun, the last couple of weeks and months here, I know have been really crazy, talking about the trade media side of things and specifically in appliances and CE, covering the space. Obviously, we’re talking about COVID and everything that’s happened in the space over the last couple of months, but what’s it been like for you, covering the ups and downs of what we’ve experienced from stores closing to just the roller coaster ride that’s been how consumers are spending at retail? It’s really all over the place.

Grant Morgan: You couldn’t put it any better, a rollercoaster. It’s just ups and downs, but at least with a rollercoaster, you can kind of see where you’re going. Things have been crazy busy here on the journalist side, but the wonderful thing that I’ve been seeing is everybody’s hustling, everybody’s trying to make it work. I’m really encouraged by the agility shown by retailers, their willingness to adapt to change. Not everybody does, but the majority that I’ve seen have, and they look out for their communities. It really brought home community and family first. And whether that’s a business saying, “Hey, let’s stop production for a little bit or sales or anything like that. Let’s make sure people have PPE equipment, gear, let’s donate these things.” Doing things like that, it’s just all these unexpected trials and the effects that you’d never think of even last year. Last year we’re like, “Oh man, tariffs, slowed down turnaround time to get my goods here.” I never in my wildest dreams would have thought that a worldwide pandemic would hit.

Rob Stott: Yeah, I’m thinking about some of the last stuff I wrote about before joining Nationwide was all the tariff issues about they were hitting appliances and stuff like that. Seemed like world stopped at the time then, now those seem trivial compared to what the space has faced since then.

Grant Morgan: And just have everything stacked on each other. But I think one of the great things, one of the fortunate, unfortunate things that happened with tariffs was dealers who had the foresight and the ability to order ahead of time and be like, “Okay, well I need to get my shipments in, I don’t want to pay extra for these products. I don’t want my customers to pay extra for these products.” They were able to get their orders in, and so they were like the squirrels hoarding the nuts for winter almost, and so that’s seen them through.

Rob Stott: That’s an incredible point, and honestly, not one I had considered until right now talking with you, is that now we’re looking at the challenges… and eventually planned on getting to this with you, but what better time than now, a perfect segue to it. One of the challenges, especially in appliances, being the lack of inventory availability at this point, just because whether it was the demand early on during COVID, I’m sure you notice the spike in freezer sales and things like that, but then compounding that with the fact that manufacturers shut down plants and reduced production because it’s social distancing, and having less people in a factory you’re not going to be able to put out as many products. So now all of a sudden there’s the inventory shortages, so really crazy way that, thinking about it from the tariff perspective is that, like you said, those who were able to have the foresight to get ahead of that and stock up early, potentially are the ones that were able to weather the storm a little bit better because of having appliances in stock.

Grant Morgan: Yeah. And availability is a buzz word I’m hearing a lot right now, and it’s the lack of abundance… It was kind of crazy, well freezers, you don’t really think of that. You usually walk into an appliance store or something like that, and it’s like, “Oh, fridges. Here’s your stoves. Oh, freezers are in the back.” But people were storing food, it was kind of like, “Oh, well I don’t know if I’m going to be able to get to the store more than once a month, if even that. I don’t even want to go to the store. I don’t want to be around, getting sick.” And so even my wife, we have a separate freezer out in the garage, and she’s like, “We should get a fridge.” And I’m like, “Nah, do we really need a fridge?”

Rob Stott: Now she was trying to spend money on consumer tech.

Grant Morgan: She was like, “I know which one I want, it has really cool ice that comes out of it.”

Rob Stott: Oh no. Obviously inventory, I think we’ve kind of hit on it of being a big challenge. During this time is anything else really stood out to you as far as what the biggest obstacles were to being able to operate during this time?

Grant Morgan: One of the biggest obstacles that I’ve seen is… That’s a good question.

Rob Stott: There’s many. No, I know there are many.

Grant Morgan: There are so many answers to it. I think one of the biggest obstacles… Well, we’ll stick with availability, is you may have ordered your products, but like you said earlier, Rob, you had no idea that a factory was going to close. Even if a factory closes for maybe a month, that can back up in effect two quarters, and so all of a sudden you’ve got all these people at home now who are looking at their fridge going, “Hey, honey, we should get an extra freezer. We should get an extra fridge. We bought two crates of eggs, they won’t fit in here.” Things like that, and so all of a sudden you have all your customers asking for the same thing. And of course, they want the best price, they want the cheapest one, anything just to get them through this.

And so that’s one of the biggest obstacles, is saying, “I don’t have the model that you want.” I’ve seen agile retailers being able to adapt to the change, and say, well a customer comes in and says, “I want XYZ that was on your site.” And it’s like, “I’m sorry, we’re out of inventory, but I can get you this one for 25 bucks more.” That’s not a huge ding where the people are like, “Well, okay, it’s either I order it and a month or two later, not guaranteed, I might get that fridge or appliance that I need. But yeah, I’ll get this one. It’s not in the color I like, but hey, I can get this one.” So, some of the obstacles there are, you have inventory on hand, but you don’t know how to move it, and this has given an opportunity to be able to move the inventory that you have while servicing your customers and helping them live a better life.

Rob Stott: Right. And that actually brings up another point too, as far as turning these challenges into opportunities, and you also hit on it a little bit as well, is that customers are sitting at home right now using these products, using these appliances, and really putting them through quite the ringer, honestly, is one way to put. Just because if you think about it, maybe during a normal work-life situation where you’re going to an office and leaving your home for half the day, you’re only cooking, at that point, one meal a day, maybe two, if you really like to get into breakfast. But nowadays, with people working from home and offices still not fully opened or just moving to remote work, you’re now cooking three times a day in most cases, so putting these things through their paces. We talk about the lifespan of appliances, I know somewhere in that 7 to 10-year range, that’s with normal use, this is above normal use, so I imagine those numbers are going to be coming down pretty soon.

Grant Morgan: Very true. And that’s something else that I’ve seen, we did a story on this recently, of just how appliances are being used more and they’re actually being replaced, and so the repair versus replacement, people have had these appliances forever and they’ve dealt with it because it’s like, “Ah, I make Ramen on it.” Or, “Mom bakes bread maybe once or twice because I got into this new bread maker,” or something like that. So, it’s very true and all of a sudden it’s like, “Oh, well I’m home, I’ll make some mac and cheese for lunch. I’ll try out this new pizza recipe.” People are more adventurous that way and they’re home and they want to try recipes, and all of a sudden it’s like, “Well, this oven does not cut it. Let’s see online.” And they start perusing the dealerships and different things, and all of a sudden they’re like, “This gas cooktop is the bomb, it’s great, let’s go get that.” And so they call up and just, “Oh, we don’t have that model, but we have this model.” Different things you run into.

Rob Stott: Yeah, absolutely. Well, from the upgrade standpoint, I mean, maybe anecdotally, I don’t know if you guys have any hard numbers on this, but we’ve seen obviously a trend has been smart appliances, you get the hubs on refrigerators and things like that, WiFi connected appliances. Any reason why software upgrades or what’s inside of those appliances, from a technology standpoint, would shorten the upgrade cycle?

Grant Morgan: You know, I don’t know.

Rob Stott: Fair question.

Grant Morgan: The upgrade cycle, I think it’s more of an investment now. And so where, my generation… I’m in my 40s, so I’m a youngster still, but I didn’t grow up with fridges that I could check on while I’m at the store to see what’s inside if I need milk or, “Oh, I’ve already got two gallons,” different things like that. It’s like, I don’t need that, I have magnets to post notes on the fridge, things like that. But the generation that is coming up, they expect that. It’s not a feature, it’s an expectation. And so for folks like me who are buying it for their kids and their teens and things like that, I may not want that but I know my kids do, and so it would be something where I would probably be more likely to upgrade if I was able to see the benefit of it.

Rob Stott: Sure. And I know they’re crazy some of the stuff we’ve seen, and I plan on at the very end we’ll talk about some of the things that excites you about the appliance space and whatnot. But before we get off of COVID, I have to ask, I know you guys have a lot of coverage, obviously, just perusing the TWICE website and seeing some of these stories. Is there a cool story to come out of this? Because obviously we hear a lot of negative news with economy and things like that, and the struggles of retail, but opportunities obviously during this time for some cool stories to pop up or some of those feel good, inspirational type stories that you tend to see. Anything like that in your coverage that stands out, that really made you stop and think for a second about how cool this space is?

Grant Morgan: Yeah, definitely. Just overall, I am really impressed with how retailers are innovating to keep their people safe, their customers, their employees, themselves, their families, and still do business. It’s not easy. And one of the things that I have been so, so amazed at, I’ve been using that word a lot, amazed, but it is, it is amazing. When you really think about it, we were used to doing business a certain way, and for generations. Computers came along, it’s like, “Oh man, now I don’t have to write stuff down.” But think about it, what has really changed in your space over the past 20 years? And now all of a sudden this happens and you have to change in the next day, and it’s different.

And one of the amazing stories, and I’ve heard it from many, many different sources. You hear about layoffs, you hear about furloughs, you hear about stores closing, but the places where they’ve been able to shift their staff to different responsibilities and keep them on and still being able to keep them, and especially the independent retailers, the mom and pop shops, being able to do that has helped them and their employees stay afloat. But it’s also shown their customers that they care, that they’re taking it serious, and they’re not just there to push a product, they’re there to help them improve their lives.

And so I’ve really been impressed, especially with the sponsoring from Nationwide, with their Back to Business Hub, all the support you’ve given your vendors, your members. The state-specific webinars were great, because that’s part of the craziness. I’m actually located in Utah, and so I can drive 30 minutes North and be in Idaho if they’ll let me. I can go 30 minutes to the Northeast and be in Wyoming, five hours South and I’m in Vegas, it’s crazy, how are you going to be able to handle this on an individual state basis? And I think Nationwide’s done really well with that.

Rob Stott: Well, thank you. It’s always nice to hear that and get that recognition and certainly trying to… it’s tough. I got to tell you navigating all those different states, at the outset, whether it was how they were handling shutdowns and who was being declared essential and things like that, so many different ways of interpreting laws and things like that. It’s been crazy to follow throughout this whole time, but we got to try something and I think we heard enough feedback from members that were taken advantage of, some of the resources and things like that. So, thank you, it’s always nice to hear that.

Grant Morgan: Oh, and the proof is in the pudding. It really is, when you pull together and you come together as a community, and you’re not out for the profit… Profits are nice and you need them, but when your customers see that you care, and I can see this from a journalist standpoint, that you’re making lifelong customers, not just those one sells. And so just seeing the communities and talking with people around me… RC Willey is a huge, huge vendor out here. It’s like you have RC Willey and then you have a little guy, tiny, tiny guy… here and there, and it’s just this is where it started and so it’s their home turf. But even the small guys here have pulled together and it’s just amazing, the results are great.

Rob Stott: Yeah. I mean, you talked about it too, the agility of the space, the independent retailer. We talk about what’s inspiring, it’s seeing those guys, how they come together and how they work with one another, and they’re willing to share and idea share and talk about what works for them and really get behind one another, those are the things I think that are awesome to hear and see just whether it’s switching up… Not even business models within a store to alter what one team member might be doing, but members that literally switch their business model from selling things to using their resources to produce some of the PPE materials that were needed or ship appliances to places in need and things like that. So many of those kinds of cool stories that we’ve seen, we covered throughout, and are always just… They kind of let your jaw drop in and just realize how cool this space is and to be a part of it.

Grant Morgan: Yeah. And that’s something I… if I were to just stayed on the consumer side, I would never have been a part of this, and I never would have been able to share the good news with everybody else. So it’s been a pleasure for me to see that because you write about things as a journalist and it’s like business, business, business, news, and all of a sudden it’s like, “Oh, humanity. People are still nice. People do care. Wow, this is great.”

Rob Stott: Yeah, makes you feel good. But to talk about what’s coming ahead, obviously we’ve hit on a lot of the challenges that this space has faced, a little bit about the opportunities. But looking ahead to the second half of this year, what do you see as far as the appliance space, and what you guys are covering as far as where you think some of those other opportunities lie for the independent retailer?

Grant Morgan: I see a lot of the opportunities there will happen with diligence. It’s not the same. Everybody, I’m tired of hearing the new normal. Now, this is the new not normal. I’ll have to come back to this one later, I wrote an article about it, but today’s new normal was yesterday’s disruptors.

Rob Stott: I like that.

Grant Morgan: So you really think about it, everything that is normal for us today, pushed someone off their stool, and people had to adapt and change to it, and change management is a huge part of any industry, but especially the appliance industry. It’s different. Will we still deliver, will we still repair? These are questions that people had to spur of the moment, it’s like, “Oh, well, what are we going to do? What practices can we put in? Oh, wait, there’s no hand sanitizer available for 20 miles, how can we do that?” Or, like you said on the other foot, we have all these resources, what can we do to help out our community to make it so we can still deliver the quality that our customers expect out of us and go beyond that?

But along the lines of the appliances, being diligent in taking care of your people, being diligent in making sure that your orders are in. It’s not something you can be like, “Okay, I put my order in, I can sit around until it arrives here for three months.” You can’t do that anymore. It doesn’t mean you have to go crazy trying to claw and scrape everything around, but you have to be more diligent on how you approach things. People are watching you a lot more, especially if you have a website, which I highly encourage, seen huge growth for retailers who have a good website where people can come in and visit and find the support that they need. And I lost my train of thought.

Rob Stott: I’ll help guide you with another question, because we got obviously plenty more, so much we could talk about in this space, but…

Grant Morgan: That’s the thing that I’ve seen that will help the most, in my opinion, is being diligent, looking outside the box, looking outside the refrigerator box that your kids like to play in. You may never have carried a certain model or brand before, but it might be a time to consider that. If the availability is there and your customers need something, it might be the right time to try out a different brand. I don’t know, that’s just my opinion.

Rob Stott: Yeah. I mean, if this time has taught us anything, it’s that you can’t sit idle and you have to look at every aspect of business. You mentioned the websites, obviously a lot of Nationwide members have taken the opportunity, if they weren’t already invested in digital, they got invested in digital or are upping their investment. So same goes for the product mix, absolutely makes sense, looking at what’s working and where the demand is and making those adjustments.

Grant Morgan: Yeah, definitely.

Rob Stott: So, I said we were going to close that on this and I want to circle back to it, there’s a lot that’s happening in appliances, and we talk about the innovation from having giant tablets on refrigerators and controlling dishwashers and washers and dryers with your phone and things like that. But thinking about everything that’s going on in the appliance space or talk more generally about the CE space too, because I know that’s a big thing obviously for you guys, but what is it that excites you most? What innovations or technologies are you looking at that grabs your attention? When I think of walking the show floor at CES, where do you go to, what’s the magnet for Grant, and what do you like to get involved with?

Grant Morgan: What makes me say, “Oh, shiny.”

Rob Stott: Yeah, exactly.

Grant Morgan: Well, especially, I’ve worked from home for about a year now and it’s been different. I used to go out, drive into work, so it’s been nice to not have as much gas and wear on my truck. But home comfort products, that is really things you don’t think about. I was gone for 10 hours, 12 hours a day out of my house, and so as long as everything worked when I got home, it was great. No, but now I’m here at home and I’m looking over at my computer, at my pictures on the wall, and there’s dust, and I’m just like, “I’m breathing that.” So I’ve had a lot of conversations recently, we’re actually researching some products for an article about inner air quality devices. And at CES and different trade shows and different things that I was able to visit, they were kind of in the corner, but I think they’re going to come to the front.

Just a lot of the home quality products there, it’s like, “Oh man, why am I breathing my cat’s fur or my dog’s?” You’re just like… “Oh, man.” It’s the same thing was with refrigerators, I started noticing, “Oh, I’ve got a crack on my shelf. Now maybe I should look into repair,” getting this, and trying to find that is difficult, it’s like, “I just need this part,” different things like that. But I’m excited, especially for home comfort products, home network, everybody’s online now, and so I was used to having a certain standard of internet and all of a sudden everybody else is working from home and I’m like, “What is wrong?”

Rob Stott: Kids try to game while you’re trying to podcast.

Grant Morgan: My neighbors are all online too, and they’re trying to watch Netflix while they work too and different things like that. But I’m also drawn to home theater systems, and so that’s always fun and exciting for me, is like one of these days I’ll actually save enough pennies to get a good system. It’s been hard not to pull the trigger on a couple of systems already, but I’m like, “No, no, I got to get my TV first.”

Rob Stott: And the funny thing is everything you’ve touched on so far are the things that, I think, are getting more attention right now just because of how much people are at home, and leaning into their home networks, leaning into their home entertainment systems, and realizing that if I’m going to be sitting here watching TV so much every day maybe I need to have a little bit of a better experience than what I have right now. So it’s all kind of going… I hate to keep circling back to what this COVID situation has done, but it’s really, I think, brought a lot of attention to so many different products across so many different categories.

Grant Morgan: It has, especially, I’ll throw in there too, smart home devices. I’ve used my Echo in different… trying to make things work together. It has been fun. They get the-

Rob Stott: Fun with air quotes, or actually fun?

Grant Morgan: Fun with air quotes. Stuff stops working because the internet goes out… Oh, there we go, just kind of like that. Stuff stops working because the internet stops working for a second or something like that, and all of a sudden my phone lights up, it’s my wife or my son, “Dad, what’s wrong with this? Dad, what’s wrong with that?” I’ve had quite the education over the past couple months of how stuff works and how I want to make it work better, and I think a lot of people are going to do that too. They’re kind of the same way, they’re looking for people to help them. And the best part is, yeah, you can turn to the internet, but people want someone to do it for them, they’re starting to be that more… The DIY is still there, but there’s a lot more folks out there saying, “Hey, I don’t want to bother with it, please fix it for me.” There’s an opportunity there too that I’m pretty excited about.

Rob Stott: No, that’s awesome. And like I said, having the time to really put the attention towards all these, it’s fun to watch what’s happening from our members standpoint, I’m sure the same could be said from your perspective covering it and seeing everything that’s happening. And to that end, we both obviously have a lot of work that we have to do, so as much as I would love to keep chit-chatting and shooting the breeze on CE and appliances, I know we both have to get back to work. No, Grant, I appreciate the time, and it’s always good catching up with you. Hopefully, we get to do it here in person pretty soon, so I know we’re all itching to get out of the house and get back on the road.

Grant Morgan: Well, I’m excited to see people in October, so hopefully it’ll… That’s one thing I’m excited to see, and nervous about, is how all these virtual or semi virtual conferences are going to work. I think it’ll be great.

Rob Stott: I agree. The human interaction, even if it’s from a socially acceptable or safe distance, or masks and all that, it’ll be fun to have that interaction and to see people. No, we appreciate it, appreciate everything you do for the space, and we look forward to chatting again soon.

Grant Morgan: Sounds great, Rob. Thanks.


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