Quiet Pizzazz

He May Be Modest And Reserved, But Retailer Bob Abt's Store Is Bold, Dynamic And Exciting

Three kids line up on a deck overlooking a 7,500-gallon saltwater fish tank at Abt Electronics, hoping to catch a glimpse of two small sharks gliding through the water. They giggle with delight when they spot an eel lurking along the bottom. Beside them, their parents and several other customers try out the camcorders lined up along the counter, aimed at the giant aquarium.

The scene is exactly what Robert Abt, CEO of Abt Electronics in Glenview, had in mind after watching hotel guests zooming in to video a fish tank at the Mirage Hotel in Las Vegas. It has created the same excitement at his store, drawn in customers, and helped showcase his products.

Innovative. Creative. Marketeer extraordinaire. Pure Bob Abt.

Abt, 66, isn't flashy. He's not outspoken or loud. Yet he molded his parents' tiny Chicago radio store into a sparkling and exciting suburban shopping destination that almost belies his personality.

"Quiet pizzazz is the way he is," said Abt vice-president/general manager Phil Hannon, a long-time associate. "If you look at the front of our store, it's not flashy. We offer a quiet sell, and work hard at exceeding customers' expectations."

Borrowing a page from Las Vegas hotel magnate Steve Wynn, Abt created a store people visit for the atmosphere alone. Once there, he exceeds their expectations of service, offers everything from the best products to the most reasonable prices and tops it off with free delivery.

Then he waits for them to return. And they do. Nine in every 10 of his customers come back.

This is how Bob Abt and his four sons turned Abt Electronics into the largest single-store appliance and consumer electronics dealer in the nation. And it is why the Illinois Retail Merchants Association is honoring Bob Abt as its 2004 Retailer of the Year.

A soft-spoken, self-described "average guy," Abt seems more like the dependable accountant from the next cubicle than the chairman and patriarch of a booming 68-year-old business. But once he starts talking about retail, his eyes light with fire and his voice rings with passion. He knows what his customers want and is almost fanatical about keeping them happy.

"He's a visionary," said Hannon. "He's seen things in the future."

His vision is why Abt Electronics has blossomed while so many other electronics and appliance dealers struggle for survival in this fiercely competitive retail category. He saw and filled a market niche for high-end products, became one of the first in his category to run an ecommerce site, created an unforgettable shopping experience, and maintained his unflinching devotion to superior service.

Simply put, Abt Electronics is a very different kind of independent retailer, one that retail consultant McMillan & Doolittle called "a powerful case study in how to succeed as an independent."

"Robert Abt is an innovative retailer who isn't afraid to challenge the traditional ideas of retailing in order to succeed," said IRMA President & CEO David Vite. "Abt Electronics is a great model for how independent retailers can not only survive, but thrive in a highly competitive retail industry."

Bob Abt set the pace for independent retailers and is setting an example for his four sons — company president Michael, and vice-presidents Ricky, Billy, and Jon — who represent the third generation of this family business.

Two years ago, the five Abt men put together their crowning achievement to date: a 358,000-square foot facility on 28 acres in north suburban Glenview. It's a retail store like no other.

The front half of the brightly lit store is divided along the center aisle, appliances on the left and consumer electronics on the right, all lined up farther than the eye can see. The huge fish tank sits behind a counter on the right, surrounded by camera equipment. On the left, a two-ton granite globe rotating in a thin stream of water captivates children's imaginations.

The back half of the store opens into a vast atrium. Here a skylight illuminates a 60-foot-high water fountain surrounded by exotic plants. Behind the fountain, a high-tech, four-panel plasma screen rotates like a slow windmill as colorful video images flow from one section to the next.

On the perimeter of the atrium are several built-out vignettes, some sampling top-of-the-line home theater choices, others showing off high-end kitchens. Children sit at a specially designed table with four computer stations. More kids wait their turn to stand inside Abt's unique bubble machine. At the ther end of the atrium, a computer screen showing a Barry Manilow performance sits on top of a player piano as the keyboard plays along.

At a time when many companies save money by cutting back services, Abt focuses on just the opposite, providing the ultimate customer experience.

"He's not focused on the expense for the displays. He believes the store has to be kept spotless and new-looking and interesting. It's not a matter of cost," Hannon said.

Abt just wants to entertain and excite people who visit his store.

"I've equated my store to Las Vegas," Abt said. "As far as the entertainment, it's really helped our growth a lot," Abt said. "Steve Wynn is my idol. People can gamble anywhere, but they want to go to Steve Wynn's hotel."

Besides the store's bright elegance, customers return for another reason — exceptional service. It's customer loyalty that is most important to Bob Abt. In everything he does, he focuses on making customers happy.

"We really try hard to keep people happy, and we mostly succeed," he said. "If people are happy, they'll tell their friends about it."

Abt's motto is "The House That Service Built." The logo on every Abt truck reads: "Our Goal... Complete Satisfaction." And its one-page customer service policy handbook simply says, "The Answer is Always ‘Yes' to Any Reasonable Request."

Bob Abt and his four sons back up those words with an almost fanatical devotion to customer service. "Bob is truly customer-orientated," said James J. Bakke, CEO of Sub-Zero Freezer. "A lot of retailers say they are. But he really is. He follows through on his commitment."

In one case, an elderly woman from Lincoln Park called to say she needed a refrigerator but was confused on the size, the type, and everything else. Abt sent a salesperson to her home. He took the dimensions, brought her back to the store and she picked out a refrigerator she wanted. It was then delivered to her home.

Sometimes customers call from a train station unsure how to get to the store, so an employee drives to pick them up. Other times they are at the store and need to get to the train, so someone will drive them back. When it's raining, employees will walk customers to their cars with big navy blue golf umbrellas adorned with the Abt logo.

When a customer survey is returned and marked somewhere below the highest satisfaction level, Bob Abt or his son Ricky will personally follow-up with that customer. They also sit down with employees to see what they could've done better.

"He likes seeing the negative letters almost as much as the positive ones. Because then he can find out what we need to do to improve," Abt Customer Service Manager Cari Boyk said.

Customer service is pleasing the customer no matter what the circumstance, Boyk said. Recently, an Abt delivery driver found a cat in the back of his truck after a long day. He called each of the customers he delivered to that day until he was able to reunite owner and pet.

Bob Abt adds the smaller personal touches that set his business apart. Each time a customer makes a purchase, the cashier thanks them and hands them a thought-of-the-day card, a two-by-two-inch card with a short positive thought.

Customers remember those things, and come back because they are satisfied. More than 90 percent of his customers are return- or referredshoppers. This is nothing new at Abt. Many are second or third-generation customers who began shopping Abt in the 1940s or 1950s.

Those who shopped Abt a half century ago, recall a very different store than today.

The store opened in 1936 after Jewel Abt gave her husband, David, $800 to open Abt Radio in the Logan Square area of Chicago.

In the early days, the family basement served as the company warehouse and David Abt made deliveries out of his garage with a pickup truck. Jewel took care of the books. During World War II, with most radio parts dedicated to the war effort, the Abts focused the business on repair work. Through hard work and dedication to their customers, they always made a profit.

Bob Abt grew up sweeping floors at the store and learning the value of hard work and customer service by watching his father.

His formal education wasn't as simple. He remembers struggling just to earn a C average in college. But he had natural people skills and loved risk, so he played poker, which helped pay for some of his college expenses. After graduating from the University of Florida at Gainesville with a business degree, he went to work for Goldblatt's Department Store. His father insisted he work for someone else for at least two years. It remains a family rule.

"When you work for mommy or daddy all the time, you do get coddled probably more than you should," Abt explained.

Abt returned to his father's store showing a natural talent for the business. His strong work ethic drove him to work into the wee hours of the morning. His straight-forward personality gave him an edge in dealing with people.

"He's old-school. Do what you say and say what you do. That's Bob," said Panasonic account representative Bob Schaffner. "If you ask him something and he agrees, a handshake is all that's needed. You can be comfortable knowing that's good enough."

Abt soon developed a sharp eye for detail and pleasing customers. He once visited a competitor's new store and noticed cracks in the wall and dirty ashtrays. Abt told Schaffner his competitor probably "wouldn't last a year." Twelve months later he was proven right.

"For him, it's all about attention to detail," Schaffner said.

Abt attends to every detail at his own store as well. Instead of fearing change, he em braces it if he thinks something can be done better. He loves the risk involved, but carefully calculates every decision. He bounces his ideas off everyone from the most inexperienced staff member to the most common customer.

Still, Abt's conclusions have run contrary to those of his competitors. Most retailers would expand outward if faced with Abt Electronics' tremendous growth. But despite employing more than 900 employees and topping $200 million in sales, Abt has kept his business under one roof.

They go against industry trends by controlling every facet of the operation themselves, outsourcing nothing. They further set themselves apart by offering customers top lines in both appliances and electronics, while still selling basic brands.

Abt succeeded in much the same way he used to win card games in his youth — by doing things just the opposite of everyone else.

"I like to be different. I used to play poker and we'd play a game called high/low. You know, if everybody goes one way, you want to go the other way," Abt explained. "We like to be different, but we definitely want to do everything by ourselves.

"If you're going to succeed, you're going to succeed on your own part. If you're going to fail, you're going to fail on your own part," Abt theorizes. "At least we can control it."

Now Abt and his sons commit themselves to doing everything in-house, from repairs to delivery to installation. They even have their own wood shop for making retail displays. Michael Abt promises the next generation of leadership will follow his father's philosophy.

"We like to be in charge of our own destiny," he said.

The Abts also went against common industry thinking when the family decided against a multi-store operation. Customers are encouraged to try out Abt's home entertainment vignettes and consider the many possibilities for their own homes.

Most retailers consider the fastest way to make money, win new customers and increase short-term sales is by opening multiple locations. Abt was willing to create his own path. When his former Morton Grove store began splitting at the seams, he chose to build one huge store, complete with an expandable warehouse.

The decision was based on finding a solution that best suited their customers. Abt and his sons figured they could best serve them by keeping everything in one building.

"We've not diluted our staff, we remain all in one place. That's our strength," Michael said. "Chicago's a big population; people will drive to see us. We have learned that if we have one great store, people will drive."

The two-year-old building is great in size as well as scope. It allows the Abts to devote plenty of space and plenty of staff to satisfying customers.

The customer service department has 70 people working in the phone center, at desks, and at the counter. The warehouse has six lines set up to ship out packages and can handle up to 2,200 orders per day. There are 80 loading docks and 130 vehicles in the Abt fleet so employees can service customers outside the store. The retailer makes 6,000 weekly customer visits mostly for deliveries and installations. There are 15 installation crews working the Home Theater Division alone. The Custom Kitchen Division uses another three to eight crews.

Some people would say Abt made a bold but risky move when he expanded in such a big way. But, just like in his previous expansions, he felt he had little choice.

Years ago, he convinced his father to move out of the original Chicago store after they watched smoke rising from West Madison Street during the riots. Later, the loading dock at the Morton Grove store was so small and inefficient, product was getting crunched and valuable time was being wasted.

"I definitely gambled," he said. "But I thought we had to do it. Every move we had to do. We grew out of every place. A few years ago, we were doing so much business in way too small of a space. If we didn't move, if we didn't find the right property here, we could have gone out of business."

The move paid off in a big way. Their success is based on simply giving customers what they want. To do that, father and sons work the floor daily and follow the customers' lead. When customers wanted higher-end brands several years ago, Abt began convincing those vendors that his store was a good fit.

It wasn't easy. For years, Abt built a reputation as a price leader. Some of the top-end vendors didn't want to deal with the store. But he persisted and with much hard work, his store now offers some of the top appliances and home electronics in the business.

"It was a real challenge," Abt explained. "In 1990, when we moved to Morton Grove, we had no electronics at all. We talked to vendors in electronics and speakers, but the manufacturers wouldn't come to us. So we just kept after them. We kept knocking on the door, knocking on the door. It was a long struggle."

Today the store has 25 crews on the street doing high-end custom home entertainment. Every company wants to have product on the floor at Abt, and many do. Abt Electronics carries more than 100 brands of appliances and consumer electronics.

Many are the elite brands not carried by competitors, and Abt entices his customers in an elegant setting, showcasing them in dream kitchens and fantasy entertainment centers.

The store offers giant Sub-Zero refrigerators selling for $7,000, Mitsubishi 60-inch plasma TVs for just under $15,000 and a La Cornue range, marketed as the ultimate in gourmet professional cooking for $32,000.

It has a home entertainment display that sells for $250,000, and customers can spend twice that much — or more — if they're willing. But the store also offers DVD players for under $100 and competitively priced dishwashers, ranges and freezers.

It's obvious that Abt wants to serve customers from all ends of the spectrum.

"We want the guy buying low-end saying, 'wow, this is the best place we've ever bought a low-end range.' We want the guy in the middle-end saying, 'this is the best service we've ever received for a mid-range appliance.' And we want the guy buying high-end saying, 'this is the best product we could find and better service than we expected,'" Hannon said.

Abt is never satisfied with the status quo and is always looking for the next big innovation.

In 1996, that was the Internet, and the store started its own website, www.abt.com. Within two years it was selling products online. Abt became one of Panasonic's and Sony's first e-commerce dealers.

The site has since become a second store for the company. About one million different people visit it monthly and e-commerce accounts for nearly 15 percent of Abt's total sales. The sales are from all over the country, with less than 10 percent coming from Abt's regional delivery area, so the website is not cannibalizing the store.

Abt charged ahead of his competitors to sell mobile electronics, custom audio products, and even computers.

Abt Electronics does what other stores cannot partly because it's easier to track and service the new items in a single location, and because Abt is open to trying new things. This has lead to new divisions such as Custom Kitchen, Custom Audio, and Mobile Electronics. A Builder Division sells in larger quantities to contractors, and a Bang & Olufsen store sits across from its Gourmet Kitchen.

Some questioned whether it was wise to sell such a wide variety of product, but Abt listened to his customers, checked with his staff, and moved forward.

"You just know when he's making decisions, it's based on talking to his customers," said Abt CFO Phil Peterson. "He's a risk-taker, but really there's no fear of failure when you're making the customer happy."

Those happy customers return and tell their friends about Abt, so the company doesn't need to spend a great deal on advertising. Only 1 percent of their annual budget is spent on traditional media advertising. The Abts do market through major daily newspapers, and spend money to make sure their web site can be found, soliciting interest through search engines and shopping sites.

Abt Electronics markets directly to its own customers with classes in cooking, videography and consumer electronics. There are even school tours of the store. Many of the classes are set up by the vendor representatives and are designed to give customers ideas on how to better use a product or upgrade to the next level.

"He likes action," Billy Abt said of his father. "We want to create excitement here. People who shop here may pass a half dozen or more competitors along the way."

Abt ensures his customers are taken care of by empowering his employees to do their jobs. He admits his business will either succeed or fail based on his staff, but he's willing to take the blame if things go bad.

"I've always thought if we had good people and it went well, great. But if we had bad people and failed with them, then it's our fault for having bad people," Abt said.

He goes to great lengths to keep his employees happy, from a good working environment, to financial rewards, to personal commitment. It all adds up to create an experienced, motivated staff that goes out of their way for customers.

Abt pays his staff well and offers them bonuses through a program called the Employee Performance Fund. It is the largest measure of success for employees. Each member of the Abt team can earn additional money through exceptional service, customer care and innovative ideas. And Abt listens to those ideas.

"He's very open to suggestions and asks a lot of peoples' opinions," said Martha Harpling. "He'll come up with an idea and then ask everyone for their opinion. It might be the guys cleaning up the warehouse and it might be people in the front office."

Store employees wear sweaters embroidered with their first name and hometown in an effort to put customers at ease. The sales staff is well-trained and given the latitude to negotiate "any reasonable offer." Even online customers can get a real person to help them over the phone.

The Abts also provide a good working environment, with clean floors and plenty of space. The roomy new building makes a huge difference, especially at the loading docks where efficiency and cleanliness has reduced truck loading time from two hours to 15 minutes. Merchandise is now safe from damage and delivery men aren't so frustrated.

There are plenty of perks. Various area restaurants visit several times a week so employees don't have to battle traffic during their lunch period. The cafeteria includes a television and some computers so employees who want to get online won't be tempted to do so when they're working. An onsite gymnasium gives employees a chance to stay fit.

"I could be wrong, but I really, truly think people are happy here," Abt said.

The numbers bear him out. The average employee tenure is five years. Many have worked there 20 to 30 years or more. There are few turnovers from year to year in the sales department, and 60 percent of Abt's job openings are filled from within.

Boyk has worked there 20 years and told Bob directly she'd never work for another retailer. Abt Electronics CFO Phil Peterson feels the same way.

"That feeling filters through Bob's personal contact with everybody in the organization," Peterson said. "He's very approachable. Everyone in the company, down to the lowest person on the totem pole can approach Bob with a comment or question."

That open-door policy is unusual for a 900-person staff, but Abt has maintained the personality of its smallish past. Employees meet for a family picnic each summer as well as an annual holiday party. They celebrate their birthdays and wedding showers at the store. When a staff member suffers a loss in their family, one of the Abt men will attend the wake or funeral. Recently, when husband and wife staff members were stricken with cancer, Abt supported a benefit fundraiser for them.

Abt is just as committed to his community. The Abt Family Foundation actively supports and directly donates to more than 1,000 civic and municipal functions, charities and foundations each year.

For five years, he headed an annual golf outing to support the Lynn Sage Cancer Foundation, and he remains a member of the foundation's board. Over the years, the group has raised $14 million for research.

"No one I know is more generous with their celebrity status," said Lili Ann Zisook, Chairman of the Lynn Sage Cancer Research Foundation. "He takes it very seriously. I just think he gets it. You can't run a not-for-profit without someone like Bob. He's a giant. He's very special."

Now Abt puts much of his charitable focus on autism, a disorder that afflicts one of his grandchildren. The child's remarkable progress from special autism training leads the Abts to fund such training for other kids.

"It's fantastic. Two years ago my grandson could do nothing, now he hits a home run in a little league game because of this training," Abt said. "If we can fund other kids and give them the same help, it can really give them a chance at a better life."

By employing more than 900 people, giving to charities and supporting his local and state governments through sales taxes, Abt has proven the importance of his business to the community. He knows how important his business is to many people and appreciates the behind-the-scenes support he gets from the Illinois Retail Merchants Association.

His son Michael said IRMA's legislative involvement has given his family's business and others like it a voice in state government, empowering retailers to not just accept what's going on.

Bob Abt called IRMA a prestigious organization of which he's glad to be a part.

"I appreciate what IRMA does legislatively. If it weren't for IRMA, we probably would not get involved (with politics) in that way. It's nice they're there to do it for us," he said. "You can't let business get destroyed. Business supports people, it supports charities, it supports people working."

In all likelihood, Abt Electronics will be able to continue supporting its community, customers and employees long into the future.

Abt's four sons are following their father's innovative path and gradually taking over the business. Already, their father is working less, spending about two weeks a month in Palm Springs, CA. While Michael holds the title of company president, all four sons carry equal weight, making decisions as a family.

"So far they all get along fine," Abt said. "It does worry me that they can't get along if I'm not around. It'll be up to them if they can work together."

Like their father, they are ready and willing to institute change as needed. Already they've got their eyes focused on the horizon.

Michael said he expects future customers to make more orders from the telephone and the Internet. The store will likely sell more furniture and higher ticket items.

The Abts never worry much about competition; they would rather focus on doing their own thing well.

"As long as we do our own service, as a company we're not worried about the big boxes," Michael said. "Our only worry would be manufacturers selling direct."

Bob admits manufacturers could potentially provide the stiffest competition for retailers, but he doesn't think it is in their best interest to try and destroy their retailer partners.

After more than 40 years in the business, he has seen a lot of businesses come and go and realizes that if he sticks with his focus on customer service, is open to change and willing to take some risks, success will continue.

A bit of forward thinking already has the store prepared for future growth. There is room to tear down a wall and increase the shipping department, and even increase the selling space inside his store. It could mean another expansion someday. That's what helped his business thrive.

"It's always changing. I love doing things, changing things. It's fun," he said.

Copyright © 2004 Illinois Retail Merchants Association