Aggressive advertising puts Tops on top of competition - Tops Appliance City - company profile

Discount Store News, August 21, 1989 by Pete Hisey

Aggressive Advertising Puts Tops on Top of the Competition

HANOVER, N.J. -- Located somewhere on the cusp of an electronics superstore and a hard lines wholesale club, Tops Appliance City, located here, has been racking up per-store and per-square-foot sales figures that are the envy of the discount industry.

While a third 54,000-square-foot store opened this spring, last year the two original stores (each roughly 50,000 square feet) accounted for more than $150 million in sales each. By comparison, a superpower like Price Club averages less than $100 million per 100,000-square-foot unit.

According to Harrel Silverstein, executive vice president of advertising and sales, sales (about $320 million last year) are holding their own this year, despite a much weaker air conditioning market. Other merchandise areas have picked up the slack this summer, Silverstein noted. Component audio equipment has been "coming back strong," he said, and the company's entry into the burgeoning home office market has been "successful so far." Additionally, sales of large screen televisions have been increasing steadily.

Although a significant portion of the company's sales derive from local contractors--who purchase ranges, refrigerators and other appliances for new housing--consumer sales have been surging, in part due to Tops' saturation advertising in New York metro newspapers. The ads, which feature "Topsy," a cartoon logo, stress price and selection, and generally include rock-bottom prices on demo pieces. They also offer a long-standing $100 "reward" if Tops can't beat a competitor's advertised price.

The advertising is generally timely and tied into recent events. For instance, ads during the opening of the movie "Batman" featured Topsy dressed in a Batman outfit, topping the slogan "Don't get ripped off." Store employees wore T-shirts with an adaptation of another ad that local newspapers considered too hot to handle: "Tops Humiliates the Competition."

A large amount of Tops' business comes from appliance sales, in which the company features as dominant a selection as anyone, including Sears.

Tops offers free delivery seven days a week, something few competitors can match. Delivery truck drivers are equipped with cellular phones, and can call customers at work an hour before delivery, giving them time to get home without missing a whole day of work.

Also, when appliances are installed, the old, disconnected ones are removed free of charge at time of delivery. "These services would cost anywhere from $50 to $80 elsewhere," Silverstein said.

Appliances are merchandised by brand name, then by size. "Appliance shoppers are very brand-conscious," he said. "If they want a Whirlpool refrigerator, we have a whole row of them, in ascending order by size and features."

Selection is so deep that Tops even offers not one but two different wringer washers, products that are almost unavailable elsewhere.

Appliances at the new prototype in Hanover are in the rear of the store, to draw customers through other product areas, said Silverstein. The firm merchandises seasonal and special buys (which it calls "plunder") at the entrance to pick up impulse sales. Plunder products ranged from fans to garden hoses, Coleman coolers and cases of soft drinks.

Small electrical appliances, like hair dryers and crockpots, are also up front, running along the front windows, leading to an enclosed audio department designed to resemble a jukebox. Inside, the company sells a full selection of rack systems, component audio, car stereos, speakers and upscale compact systems. Some key brands are Pioneer, Vector Research and Onkyo.

Low-fi equipment (boom-boxes, personal stereos, clock radios) is just outside the hi-fi room, as is home office equipment like fax machines, and cellular and cordless phones.

"I'm not sure if this is the right place for our home office products," Silverstein said. Consequently, Tops is rethinking the location. Fax and mobile telephones have both been doing "phenomenal business," he said, and will probably be expanded. Tops offers a cellular telephone with antenna for $197, fully installed.

TVs take up most of the right hand side of the store, with over 250 different sets merchandised, including 40 large screen and projection models. Key brands are Hitachi (a top performer), NEC, Toshiba, Mitsubishi, Sony, RCA and JVC. TVs are displayed by size, then by brand and feature. For instance, all 19-inch models are on one long run, with 20-inch models occupying a nearby wall.

"People are moving to bigger screens," he said. "Our best increases are in 27-inch and 30-inch screens, and even larger models are selling." Free delivery is offered on sets 27 inches and above, as customers can rarely fit those into a car.

Cameras, camcorders and VCRs are sold upstairs, on a balcony overlooking the video showroom. A large video wall at the top of a central staircase draws attention to the department, where customers can find everything from an entry level VCR to Canon's new Xap-Shot still video camera ($999).