According to an Associated Press wire article in the Washington Times Saturday, appliance maker Maytag (NYSE:MYG) has hit upon a new strategy for reassuring customers and driving sales. Or rather, a new variation on a very old strategy: "Try before you buy."
Aiming to outflank its archrivals, Whirlpool and General Electric (NYSE:GE), Maytag is opening 40 eponymous stores across the country -- and plans to expand to more than triple that number over the next two years. At each of these stores, customers will have the opportunity to wash and dry a load of laundry or to bring in a load of greasy pans and have them scrubbed in a Maytag dishwasher -- right before the customers' eyes. The stores will also feature Maytag's Hoover, Amana, and Jenn-Air products.
The company has reportedly been testing out this concept for several years now at a limited number of locations, and it is turning out to be a success, with 70% of customers coming into the store carrying out a new appliance when they leave. Think about how often you wander into an appliance store and make a buy right then and there, and that 70% closure rate will probably look pretty significant.
In this Fool's opinion, Maytag is making a really smart investment here -- and one that should pay off well for its investors. But there's another angle to this story: how much better Maytag's idea would play if it gets imitated by retailers such as Sears (NYSE:S), Circuit City, or Motley Fool Stock Advisor selection Best Buy (NYSE:BBY). Why? Because the aim of every retailer in the world is to not just get customers into its stores but to keep them in there as long as possible, shopping till they run out of cash. At Maytag stores, customers waiting on a load of laundry to run its course may find themselves also being pitched a Hoover vacuum while they wait. But at more general retailers, the possibilities for adding on sales while a customer test-drives an appliance for an hour or so are endless. The customer may not just walk out of the store with a dishwasher, but with a handful of CDs and a Sony Walkman as well.
In fact, another Stock Advisor pick, Costco (NASDAQ:COST), and perhaps Wal-Mart's (NYSE:WMT) Sam's Club, should also sit up and pay attention here. These two may be able to sell all of the above and also serve their customers a burger and Coke (NYSE:KO) to keep their strength up as they shop -- er, try before they buy, that is.
Fool contributor Rich Smith has no interest in any of the companies mentioned in this article.
