The much-maligned distribution channel often receives critical comments from insiders in a price-driven industry for downplaying small electrics. Not so for the 58-store, Midwest retail conglomerate.
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"Dayton Hudson is one of the few bright spots in department stores for small electrics," said one manufacturer. "They have a clear strategy that doesn't really de-emphasize the category."
"They're very quick to recognize and react to trends," said a European-based manufacturer. "They're an obvious leader in fashion and they're very progressive in their thinking."
Comprised of Dayton's in Minneapolis, Hudson's in Detroit and Marshall Field's in Chicago, the Dayton Hudson Corp. extends a common philosopy for small appliances to differentiate themselves from price-oriented competition.
T h e philosopy centers around offering at least one opeining price point in each category while emphasizing feature-filled, better brand-name products, said Carolyn Cherry, senior buyer, small electrics. At the same time, Cherrey attempts to dominate whatever category is deemed popular for the quarter.
"Our goal is to be a full-service small electrics department," Cherrey said. "We like to focus on the better, brandname products that the customer trusts. We also try to be prominent in whatever we think the trends are for the year whether it's a category or a reasource."
Higher-end brand names (and bigger profit margins) dominate the small electrics section at Dayton Hudson stores. The shelves are full of products from Krups, Braun, rowenta, Cuisinart and Panasonic.
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"With the brand names that we carry, you can go through each category and says who's best at what and that's the brand we'll emphasize," Cherrey said. "For instance, if I'm talking hand mixers KitchenAid would be our best resource."
The small appliances are merchandised with one sample on the shelf and an attached sign generated by the stores to describe benefits and features of the products. The space devoted to small electrics varies from store to store.
Pointing to the success of mass merchants in small electrics, Dayton stores also include at least one opening price point item in every category. Called the "Value Program," the strategy is designed to capture customers that might otherwise purchase small applicances at mass merchants such as Target, Kmart or Wal-Mart.
Dayton Hudson differentiates itself by its resources and product features. For instance, while the stores won't carry the same Braun coffeemaker as Target, they will include an opening price point coffeemaker hitting the $24.99 mark."I definitely think that we compete with mass merchants," Cherrey said. "We carry one or two opening price point SKUs so that we don't miss that customer. For the most part, we don't carry what the mass merchants do so that we don't compete with them on the same item except for this one program."
Cherrey calls pricing "critical" to small electrics, especially considering the advertising-driven nature of the business and customer awareness of prices of key items. She said she shops all competitors, mass merchants, department stores and specialty stores.
Rather than being concerned with prices of items promoted, Cherrey examines the everyday prices of her competition.
"Anybody can do something on sale," Cherrey said.
Cherrey said she is proud of successes in certain resources and popular categories. Last year, Dayton Hudson stores emphasized juicers during the fourth quarter. To ensure customers immediately recognized the company's intentions, the stores surrounded the products with fruit and banners.
Dayton Hudson stores carried beween eight and 10 juicers ragnging in price from $50 to $290 during the category's hottest period. The Juiceman was the stores' biggest seller.
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This year, Dayton Hudson stores are emphasizing espresso makers. All 58 stores will carry Krups' full-line of espresso machines with the larger outlets also carrying some other brands.
"One of our real strengths is that when customers walk in, they can tell immediately what we feel strongly about each season," Cherrey said. "We're proud of being very dominant in key classifications."
Dayton Hudson stores also differntiate themselves through product demonstrations. Full-time demonstrators at each store exhibit products approximately every other day. Cherrey said the demonstrators spend a lot of time in the small electrics section where items like bread machines lend themselves to demonstrations.
The demonstrations are done from transportabloe carts that also have room for displays of the products. Promotions and sales coordiante with products being demonstrated.
Sales of Dayton Hudson's small electrics also get a boost from strong bridal registries at the stores. Basic small appliances like coffee machines, can openers and irons are the most popular through the bridal registry, according to Cherrey, as are the usual trendy categories of the moment like this year's bread makers or espresso machines.
"The bridal business has always been a trememdous business for us," Cherrey said. "That's a great way to reach a person who may start setting up a Braun or Krups kitchen.
"If they get three pieces, they'll probably return to buy the piece that they didn't get."
According to industry insiders, all of these elements have let Dayton Hudson stores retain their image as high-end department stores in the small electrics section while much of its competition has failed.
"Dayton Hudson has maintained their integrity as a department store," said a manufacturer of upscale small applicances. "Their name's synoymous with a high-quality department store.
"They also recognize competition from Kmart and Target and go after those customers."