A 21st Century Company
By Francine Knowles | May 7, 2001
Chicago Sun-Times Business Reporter
Abt Electronics Inc. is one of the largest and few remaining independent retailers of electronics and appliances. The privately held family-owned business employs 840 and last year rang up more than $50 million in revenues. Abt, the winner of a Better Business Bureau Award for Market Place Ethics, makes more than 1,000 delivery and service stops daily and has shown a profit every year since it was founded in 1936. In November, it will move from its 130,000-square-foot store in Morton Grove to a new 350,000-square-foot store in Glenview. Here are the views of President Michael Abt, 38, grandson of founder David Abt:
Uniqueness: "Doing a lot of business out of one store, that's our No. 1 thing. There are two or three people in the whole country that do what we do--a place in Florida, a place in Nebraska. "Also, we service everything. Just about everybody [else] has contracted that out. We can service everything and install everything. We also have our own drivers that deliver. Most people hire that part out."
Milestone: "We've been on the Internet since 1995. We were one of the first three dealers to have Sony as an authorized line on the Internet. It was us, Circuit City, Best Buy. In the country since, there's nobody [else]. [Today] almost everything we sell is available [through our Web site]."
The Impact: "We do hundreds of orders a day, and for 2001, maybe 20 percent [of our revenues will come from the Internet]. [Going on the Internet] made us look at ourselves in a national picture, how to come across, and get known to people that are in Texas or California, because locally a very little percent of our money is spent on advertising. "We're much more connected via e-mail within our store. Prices change every hour, so we have to be more aware of what the national situation is, not just our local market. A lot of things sell better outside of our area. Some things that we'll never sell here, sell really well in Texas and California and Ohio. Last year wasn't a great year for air conditioners [here], but we sold a ton online. It was hot in other parts of the country, and they had a hard time getting air conditioners."
"I really think that the Internet will be more than our store business five years from now," Company President, Michael Abt
Challenges: "What we sell, especially electronics, has become real commoditized. You can go anywhere and get a price anywhere online. The margins aren't like they used to be. The wholesale kinds of clubs, Sam's Club and Costco, are driving the customer to [want] lower prices. Also, a lot of people don't want to be bothered by salesmen."
Solutions: "We need to set ourselves apart so that people want to come here and continue to come here. We try to hire the very best salesmen. We like the soft, gentle, low-key approach, and our No. 1 principle is the answer is yes to every reasonable request. That means that every employee is empowered to make the customer happy."
On recruiting: "We try to pay more than the going rate. We have a 401(k) plan, profit sharing, paid holidays, paid time and a half. I think flexibility is important, too. In our field, most people have to work every Saturday and Sunday. We allow people to take 10 Saturdays and 10 Sundays off a year. Also, we try to embrace technology, and we're not afraid to spend money, do the latest thing and empower people. Having a family atmosphere also helps. We do picnics, Christmas parties, birthdays. In our new store, we're building a recreation center, where people can work out and take showers."
On competing: "It's important to change with the times. When [I started working with my father, Robert Abt] we didn't have a computer system. It was so important for us to get that, and we did. You have to update your store, to make your place a neat place to work. We didn't carry car audio until two years ago, and it's kind of a hassle and a lot of companies like us don't do it. It's the same with computers. We started carrying them because you need to attract the young people, and with computers it's going to be what runs the whole house in a few years. It's important for us to understand what the future is going to be and embrace the technology."
A look ahead: "I really think that the Internet will be more than our store business five years from now. That's the whole country to sell to, and then home integration is another thing that we're just starting to touch on, where you can run the cords for the computers that hook up to the appliances. That's going to need people that can do a lot of business and [be] a trusted place to go to. "The smart houses, they're coming. We see them at buying shows. You'll want your oven to kick on at a certain time while you're driving home. Your fridge will be connected to the Internet. It will know when you take out a pizza, you need to order another pizza, and it will send out [a grocery order] online. You'll walk into a room and the lights will go on the way you like and the music will go on to your type taste. Appliances will be talking to each other and calling the manufacturer so when your fridge has a compressor problem it might call GE and tell GE there's a problem, send a service guy out, or maybe that [service request] will come to our store and we'll send a service guy out."
Stress reliever: "Working out usually, and hanging out with my kids." Advice: "Be near the customers. They'll tell you everything you need to know if you just listen, and don't be afraid to take chances."
Advice: "Be near the customers. They'll tell you everything you need to know if you just listen, and don't be afraid to take chances."
