Fretter
| Electronics & Appliance retailer | |
| Fate | Bankrupt |
| Founded | 1950s |
| Defunct | May 1996 |
| Headquarters | Detroit, Michigan |
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Key people
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Oliver Fretter, founder |
Fretter was an electronics and major appliance retailer based out of Detroit, Michigan, founded in the 1950s by Oliver "Ollie" Fretter.
Fretter's first store was located on Telegraph Road just north of Interstate 96 in the city of Redford, Michigan, and the main warehouse, warehouse store and company headquarters, was on Schoolcraft Road (I-96 service drive) in Livonia. Fretter expanded his operations throughout the midwest and New England by the 1970s.
The company's founder and spokesman, Ollie Fretter, became known in the Detroit area in the 1970s and 1980s by humorous TV commercials in which he promised, "I’ll give you five pounds of coffee if I can't beat your best deal. The competition knows me. You should too!" (When occasionally he had to make good on the whimsical offer, Fretter gave away one-pound cans of coffee that had been relabeled "net weight — 5 pounds".)
The company paid its salespeople on a draw against commissions program, although they were paid spiffs instead of pure commission. Spiffs were calculated based on profit margin and other incentives, not based on the price of the product. Salespeople were not encouraged to sell the more expensive unit, but a model not carried by the competition which couldn't be directly price compared and therefore had a higher mark-up. Salespeople learned that the coin endings of the products directed them to which item to sell. Products with a .97 ending were high margin items and paid well; while .86 were not as profitable, and .75 were advertised items that paid very little. Clearance items were priced with repeating numbers like .66, .55, and .33 depending on how old the item was. Special order and hard to find items were priced with .71 endings and while they paid comparable to a .97 item a salesperson may get burned when the item was not in stock and/or delays in new stock arriving.
Fretter maintained its marketing strategy as a low-cost retailer, even hiring outside research companies to compare prices with competitors and making that information available to sales people at their point-of-sale terminals. The move did little to sway public opinion since the chain sold higher end goods than its competitors but did not make that point clear in its advertising. Consumers were also deceived by SKU# used by competitors instead of Model# which made it difficult for a consumer to properly compare models between retailers. While Fretter and its competitors both sold a brand, they rarely sold the same models within the brand.
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