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Strange Bedfellows - Refrigerators, Stereos And Fine Watches At Abt Electronics

By Keith W. Strandberg | April 02, 2009

Usually, fine watches are sold in carefully crafted environments, designed to make customers feel comfortable and luxurious. Watch boutiques are often stand-alone items, far away from other mainstream stores, destination stores, if you will.
In the Chicago area, however, Abt Electronics is breaking all the rules by selling fine watches (Franck Muller, Oceanus, Chronoswiss, Frédérique Constant, Rado, Tissot, Hamilton, Longines, Oris, Victorinox Swiss Army, Ball, Seiko, Citizen, Skaagen) at prices ranging from 100 to 12,000 US dollars inside its existing electronics store, along with refrigerators, stereos, TVs and dishwashers.
To find out how they do it, I spoke with Mike Abt, the President of family-owned Abt Electronics. Abt is the oldest of four brothers who run the company with their father. 70-year-old Abt Electronics (Glenview, Illinois) is a 350,000-square-foot store that ranks as the largest single appliance and consumer electronics store in the U.S. It is also the beta-testing headquarters for major brand manufacturers from Yamaha to Whirlpool. The Abt store in suburban Chicago has more than 5,000 products on display and 1,130 employees.

Europa Star: How did you get started with timepieces?
Mike Abt: We started timepieces in November of 2007. The main reason is that in the Atrium, which looks like you are in a Mall in the Bellagio in Vegas, we have a lot of room. In the Design Center and the Atrium, we are selling luxury goods. There are fountains, skylights and great decoration.
Our customers asked for fine watches, so we wanted to offer them. Men like to go into the watch store and look around after they buy their TV. We sell lots of gadgets, we have the high-end, cutting edge, cool stuff, so watches are a natural fit for us.
Right now, people are just coming into the store. We haven’t done much advertising about watches. We have a big customer base, about a million people, so we are communicating with them via our newsletter. Two years from now, we will be a destination store for watches. Right now they are just learning about us and watches.

ES: Was it tough to convince watch brands to come into an appliance store?
MA: The brands didn’t get it when we went to them to talk about selling watches. The most important thing for many brands is image, so what watch company would want to be in a store with appliances? We are different, though, we are the biggest in the world and we have a good reputation. When they came in and saw where they would go and how it would be presented, they said yes. The hard part is to convince people to come in and see the place.
When we started audio, it was a similar process, it took us ten years to get the good audio. We have some really good watch lines in our store, which surprised us. We needed some niche products, like Ball, but we like to have name brands too. We are not a store that sells stuff, we just get what people want.

ES: Do you have a watches-only sales staff?
MA: Right now, we have four dedicated watch salespeople, who have sold watches before. They are watch experts. We have 220 sales- people, and out of those there are eight or ten who are passionate about watches. To open the store and get the right reputation, we had to have watch experts. I didn’t want to train the TV guy to sell watches. That will happen, but for now we need a dedicated staff.

ES: Are you a watch guy yourself?
MA: I like watches and I have a few. Chronoswiss was a line that I didn’t know about, but my wife got me one when we got married. I am turning into a watch guy.

ES: How is it going so far?
MA: Watches are doing fantastic. We are used to delivering refrigerators and installing the plumbing, we have a fleet of 230 vehicles and it’s a lot of hard work. With watches, you sell an image, you have the watch and people buy the floor model (in our appliance business, we can’t even sell the floor model as new, we have to discount it). They take it with them, there is no installation and the service is done somewhere else.
We will have a watchmaker to service watches in time, but we don’t have enough history yet. So, now, we send the watches off to be repaired. The business is fantastic, it was easy to enter, all we had to do was a build out in our store, and watches are exciting products. They are unique looking, they are changing all the time and people come back all the time to see what’s new. People buy a fridge and they don’t come back for 20 years.

ES: What is the secret of your success?
MA: We have our own customer base. People want to buy from Abt, they trust us, they are third or fourth generation customers. A second advantage is that we are open seven days a week and our busiest day is Sunday, and that’s when a lot of the watch stores are closed. People like to shop together. People shop after work, and a lot of little stores are closed after six pm.

ES: What is your relationship like with other retailers?
MA: Personally, I am friends with a few. We sell appliances to all the watch stores. It’s tricky, we have our own customers, and there seems to be a lot of talk amongst reps and dealers, and no watch dealers are excited about us having watches. They buy from us and they know how good we are. We will make everyone who stays in the business better.
The one thing we do bring is visibility to these brands. If we carry something and we say it’s good, it helps the brand’s image. It adds legitimacy to the lines that people don’t know. If we carry Rolex, it won’t add anything to them, but since we carry Ball, the other dealers will see an impact.

ES: What do you like about your job?
MA: I love the family business. I was in medical school before, and it’s really nice to work with your family. It’s not life or death, so I can have some fun. It’s always changing, there are always new people, so it’s interesting. I like having people come together as a team. It’s not just about who I am, it’s about everyone, the sales people, the lady who answers the phone, the delivery guy and everyone else.
I love technology so, I like to bring technology to the company. We do sales on the Internet, in the regular goods. We are roughly ten percent e-commerce. We don’t sell Sub Zeros on line, but we do a lot of TVs, refrigerators, stereos, etc. on line.

ES: What don't you like?
MA: The hours are the hardest. We are the store that is always open. Family life is hard in this business. You are always thinking about the business. Since we are open 9 to 9, the hours are always there.

ES: Who is your customer?
MA: For us, our customer really is everybody. We are not big advertisers and we don’t study our customers much, but they are educated and for the most part, they have to drive far to get here. Our customers tend to be between 30 and 60, equal split male and female. They are a wealthier customer and we are a luxury store.
We speak 30 languages, so we do have a very international clientele. When you have a lot of people working for you, you can have this expertise. We are very proud about this in the company.

ES: How important is customer service?
MA: Customer service is everything. A lot of what we sell, you can buy anywhere. That’s what really makes us different, customer service. Our motto is ‘the answer is yes to any reasonable request.’ That’s what we all live by. We try to empower everyone to take care of any problem. Everyone talks about it, but if you come to our store, you will see the difference.

ES: Are you optimistic about the future?
MA: Being a company with a history of 70 plus years, the future will always get better in the end. We are in this for the long haul. We are fine with the future. People keep wanting stuff and we will keep giving them stuff. Most of what we sell is needed product – people need to buy a stove or an oven or a TV. We are protected by selling basic necessities.

ES: What does time mean to you?
MA: Every man has only so much time. I try to live with that in mind, it’s the most precious commodity. I try to use it to the fullest every day.

© 2009 Nielsen Business Media, Inc. All rights reserved.