Coming to blows over niche vs. national vendors
YSN Staff
It may have started with Ron Popeil’s late-night infomercials for obscure kitchen gadgets.
But with the advent of the internet, and upstart badges like Purple and Saatva in bedding and Thor and ZLINE in appliances, second-tier niche products have blossomed into a multi-billion business for home-goods sellers.
The question is, are these brands right for BrandSource members and their customers? And if so, what’s their place in the product mix alongside the traditional industry leaders?
To get some answers, YSN once again turned to esteemed columnists Gordon Hecht, late of Ashley and Serta, and Rich Lindblom, BrandSource member turned AVB Marketing innovator. As usual, the two are at odds on the issue. Let’s listen in…
Make Mine a Pflugenfelder
Rich Lindblom: When I was in retail, it never ceased to amaze me when a customer would come into my store and tell me that they were considering purchasing a “Pflugenfelder” dishwasher because the salesperson at one of my competitors told them it was the best. Many of them couldn’t even pronounce the name of the brand, let alone spell it. Hand over my heart, I once had a customer tell me, “I’ve never heard of it before, so it must be good!” Huh?
The beauty, though, was how easy it was to talk some sense into them; all I had to do was ask three simple questions:
1. Have you ever heard of that brand before?
2. Have you seen any reviews for that brand?
3. If you need to repair that product, do you know who will service it?
Some of these niche brands may be fantastic products, but let’s face it, most of them make up less than 1% of the market and typically they are much higher priced than the mainstream brands.
Gordon Hecht: Clearly there is a lot of value in marketing national brand names in your shop — there is the possibility of more clicks and shopper footfalls. But in 2025, we need to convert the majority of shoppers into buyers. Each sale must be profitable, and that’s where niche brands shine.
On the mattress side of the business, those brands whose names don’t start with an “S” or “T” can also bring a lot of value to your buying public. Although the secondary brands may be unfamiliar to your shoppers, they can, overall, deliver specs and profiles equal to or greater than the major brands at a much lower cost. Even if there is a significant price difference, margins on non-brand names can be greater in percentage and actual dollars.
On the appliance side, niche brands bring another dimension to a store’s merchandising plan. While these products may not have the name recognition, often they will have compelling features not available on major brands.
Holding the Bag
Rich: But it goes much deeper than that. As I said, when you have a regional or niche brand, customers really do need to consider who will service the product should they have issues. Because speaking from experience, even though my company serviced most major brands, there were dozens of fringe brands that we would not service, nor would any other servicers that I knew.
Look, I don’t care if it is the best product in the world, eventually it will need service. And if there is no one to fix it, you have no choice but to replace it.
Taking it a step further, there is no guarantee that one of these obscure brands will even be in business in five years. I’ve seen more than one small market-share brand go under in my 40-plus years in the business.
In fact, at my company we sold a particular brand of food waste disposer for a couple of years. The model lineup featured varying lengths of warranties with the most expensive model carrying a lifetime warranty, and we sold a ton of that model. Well, guess what: About three years later that brand went out of business, leaving us holding the bag and forcing us to install a whole lot of free (or highly discounted) disposers over the next couple of years.
Gordon: I disagree about dealer/customer service. The leadership, sales and operations teams of niche and secondary brands are hungry for business. Every dealer and every sale are important to them.
I recently heard about a Tier 2 mattress factory delivering a half truckload of product that a dealer needed at the dock in four calendar days. The order went to this factory because the dealer knew the factory would push it through and his rep would be on top of it.
In the same week, I learned that a certain niche appliance supplier keeps a deep inventory of parts designed to ship overnight. This reduces the wait to complete a repair call and shortens the retail customer’s out-of-service time.
I still maintain that niche and Tier 2 brands also increase your shopper’s in-store experience. National name brands have impressive websites chock full of information. Your shopper arrives at your store knowing most of the specs and features. That means your sales team has little to talk about.
Sales associates who introduce these non-national brand products to your shopper, whether in a mattress or appliance store, have an entire playbook to present. Everything from a brief history of the line to the great and small advantages that enhance your shopper’s enjoyment of their new purchase.
It’s that little difference that captures the order for your store.
Loyalty Lives
Rich: Some folks will try to tell you that brand loyalty is dead, but I’m here to tell you that it is still alive and kicking. According to research, 80% of Americans are “loyal” to at least one brand. Loyal consumers develop a positive sentiment for a brand, repeatedly making purchases and recommending it to family and friends. And in times of economic pessimism, when consumers feel tempted to base their buying decisions on price, brand loyalty is even more important.
Even if a consumer isn’t loyal to a specific brand, there is a second factor to consider and I call that “brand familiarity.” Research also shows that consumers prefer to purchase a brand they’ve heard of before.
What’s more, up to 97% of consumers do not trust salespeople, so am I expected to believe that a customer is going to make a purchase based solely upon the salesperson’s recommendation? Well, that is exactly what you are hoping will happen when you sell a fringe brand. You must hope that your salesperson can overcome that inherent distrust of salespeople and convince a total stranger to buy a brand they’ve never heard of. Good luck with that.
Gordon: Consider the luxury market, then. High-end niche brands bring your shoppers premium products above what is offered in a legacy brand portfolio. The shopper seeking a Ferrari or Bentley may flinch at the six-figure price tag. But they can enjoy a luxury suite of super-premium appliances for only a couple of thousand dollars more than top national brand offerings. And each sale comes with more margin dollars to put in the bank.
Rich: I still believe consumers are naturally predisposed to purchase a brand they are familiar with, and that is why you should be selling only the top brands in the product categories you sell.
Gordon: Rich, every mattress, furniture and appliance shop needs national brands. But used to excess they can create a sea of sameness.
Come to next month’s Summit in Nashville and you’ll see a rainbow of colors, far more than standard white, stainless steel or variations of grey. The non-nationals provide interesting and different aesthetics including the very popular retro styling that you and I remember from mom’s kitchen. Niche and secondary brands have a speedy turnaround time from prototype to inventory, meaning you can quickly get the new cool merchandise on display for sale in your shop.
In this ultra-competitive retail environment, having choices that are unique in appearance, features and price can help your store win the retail war.
Rich Lindblom, left, was a longtime BrandSource member and Maytag Leadership Council officer who now shares his retail know-how as a YSN columnist and AVB Marketing staffer. His debate partner, Gordon Hecht, is a BrandSource consultant with more than four decades in home furnishings and over 500 industry newsletters and columns under his belt. Reach them at rich.lindblom@avb.net and gordon.hecht@aol.com.
