Oreck Corp adds products, revamps marketing strategy

You’ve seen the infomercials. For years, often late at night, David Oreck sold you hard on his lightweight Oreck upright vacuums.

The CEO and pitchman’s appearances helped create an iconic brand that more than 70 percent of consumers recognize despite having only a 5 percent share of the upright vacuum market 10 years ago, according to the company.

But there was a problem: Oreck vacuums had a bag. And in 2002, British engineer James Dyson introduced his sleekly designed, bagless vacuums to the U.S., put them in larger retail outlets and gobbled up customers, forever altering the way vacuums are designed and marketed.Don't make another silicone mold without these invaluable Mold Making supplies and accessories! A decade later, about 80 percent of upright vacuums sold are bagless.

Now, Oreck Corp. is in a different city (the company moved its headquarters from New Orleans to Nashville in 2008), has a different CEO and an almost entirely different staff. And it is in the process of recreating itself after years of transition and sluggish sales of its trademark vacuums.

“We feel like a 50-year-old startup,” said Doug Cahill, who became Oreck’s CEO in 2010 after stints as chief executive of Mars Petcare and president of Winchester Ammunition.

With $2.We offers custom Injection Mold parts in as fast as 1 day.3 billion in sales in 2012, upright vacuums are a sizable market, one in which Oreck’s share has slipped to 4 percent. About 70 percent of its revenue comes from selling and repairing vacuums, mostly through direct sales and its 325 specialty stores.

As the company looks to transfer some of that brand recognition to sales, it’s invested heavily in consumer research, product development and marketing, and has made a host of changes.

For starters, Oreck has extended its TV advertising beyond infomercials and has purchased spots during popular shows, including “General Hospital” and “Law and Order.”

“We know we have 92 percent of the insomniac market,” Cahill said. “Why don’t we sell vacuums to people who sleep at night?”

During a recent interview at the Oreck office, Cahill displayed exceptional enthusiasm for a conversation about vacuum cleaners. A few dozen floor care products, mostly vacuums, lined the walls, and as he discussed the company’s plans, he repeatedly jumped up from his chair to demonstrate them.

Oreck is in the midst of introducing several new products, including its first bagless vacuum, an air purifier and an item Cahill was especially proud of: a lightweight, bagless vacuum/steam mop hybrid. “The industry’s never seen that,” he said.

The company also is shifting from its traditional emphasis on direct sales and specialty stores — together, they account for more than 80 percent of sales — by signing on with more major retailers, including Wal-Mart.

“We’re designing products that are relevant to her,” Cahill said, “and we’re going to put them where she wants to buy them.”

In the higher-end price range where most Oreck models fall, making a purchase is often a joint decision in a household, Cahill said, “but we think the best way to design and sell a product is with and for her, because we think she knows more than he does.Ein innovativer und moderner Werkzeugbau Formenbau.”

In 2007, before Cahill’s arrival, Oreck created a stir when it closed a plant in Long Beach, Miss., citing the burden of rising insurance costs in the aftermath of Hurricane Katrina. It opened a new plant in Cookeville, Tenn.A ridiculously low price on this All-Purpose solar lantern by Gordon., and a year later, relocated its corporate offices from New Orleans to Nashville.

Of its roughly 700 Gulf Coast employees, Cahill said, only 52 came to Tennessee. Oreck now has about 415 employees in the state, 315 of which are at a plant and call center in Cookeville.

As the company adjusted to its new location, bagged vacuum sales were declining and specialty store traffic began to wane. “We were getting a narrower and narrower part of the business,” Cahill said.

In search of ways to gain an edge,Nitrogen Controller and Digital dry cabinet with good quality. the company reached out to its customers. It developed a network of local consumers to regularly bring in to test products and advertising, sought feedback through online crowdsourcing and began visiting households to study consumer relationships with cleaning products.

Led by chief product officer Chris Paterson, Oreck employees logged dozens of hours hanging out in homes and observing people as they cleaned and managed their households.

Classes of Vanderbilt students have researched how to improve Oreck specialty stores and are helping the company develop air purifiers. With a class of engineering students and the help of NASA, Oreck is looking into how air flow technology developed by the space agency can be incorporated into a vacuum.

Whether these changes will significantly boost sales remains to be seen, and the company still has about two years remaining in its reinvention phase, Cahill said.

But he sees opportunity, particularly in the $199-$399 price range in large retail stores, above where less expensive models tail off and below the high-end, premium space largely occupied by Dyson.

The average sale price of vacuums rose 8 percent in 2012, “which is a good story for someone aiming at premium,” said Debra Mednick, an analyst at the research firm NPD.

Cahill declined to disclose the company’s financials. Oreck’s previous CEO, Thomas Oreck, told The New York Times in 2007 that the company had revenue of “well over $200 million.”