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ATLANTA-Hurricane Floyd left millions along the Eastern seaboard without clean water. That very week, The Home Depot and GE Appliances disclosed an agreement for the retailer to sell the vendor's full line of water-filtration products chainwide in the United States and Canada.

Talk about free advertising.

GE already provides water softeners, heaters and a bit of filtration -- as well as some core major appliances -- to selected Home Depot stores. But the agreement calls for every water-system SKU in every store beginning in the first quarter next year.

"By adding GE SmartWater whole-house filtration systems, we are adding quality products backed by GE's reputation and offering our customers a system that will help ensure the quality of water in their homes," explained Mike Tracy, The Home Depot's senior vice president of proprietary brands.

For storm victims forced to boil water this month, such equipment might have been useful. "We catch cryptosporidium, the main one" among biologic contaminants; sediment; minerals; and foul tastes and odors, said Chris Antonello, GE Appliances' general manager for water systems.

Dealing with hurricanes is a rare occurrence. Water systems are intended for constant use, a message still in the making, said Antonello.

When GE entered the filtration business early in 1997, it proclaimed itself the first large manufacturer in the category. Most of its distribution was through plumbing outlets, other specialty stores and the builder channel. It slowly expanded into home-improvement and similar retailers, but The Home Depot deal combines two heavyweights.

"I call on a lot of other large retailers, but they are very customer-focused," said Antonello. "Now they have a supplier to manage the category. The Home Depot's national scope enables us to get quality water products to areas of the country that really need to improve the quality of their local water supply."

The SmartWater series spans basic GE models and step-up GE Profile and GE Profile Performance equipment. There are four systems using reverse osmosis and three with dual-carbon filtration, plus three refrigerators offering the feature. The latter does not include the GE-Culligan co-branding water filtration in refrigerators introduced later in 1997.

Water softening consists of another four systems. Water heaters fitting a variety of needs number about 70 SKUs. Replacement filters and accessories are offered throughout the category.

The Home Depot's presentation in water filtration includes the likes of OmniFilter and Teledyne Water Pik, but nothing on the scope GE offers. Plans are to develop in-store merchandisers.

"We're doing a display within their guidelines," revealed Antonello. "We're trying to make it as simple as possible." Lucid point-of-sale material was considered essential so consumers could make informed choices, he added.

To the GE official, consumer education is essential to the category's progress. The manufacturer has promoted its line heavily with short infomercials -- "it's amazing the amount of information you can pack into one minute," he said -- rebates for telephoning immediately and customized free water tests.

GE found consumers don't understand what functions the systems perform, overestimate the cost by two and three times, and are ill-informed about availability. "What are you trying to do: get rid of sediment and other impurities, or improve the drinking water?" he asked.

"Our goal is to make it an appliance. It was a specialty item; now it's more mainstream and the price is coming down."

Separately, GE Warranty Management Inc. has contracted with OfficeMax for the retailer to sell GE's extended-service contracts on consumer electronics, computers and appliances in the chain's 900 stores, beginning next month.
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Author:Beatty, Gerry
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Sep 27, 1999

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