No Softer Side to Sears Pilot Stores
Sears is looking for ways to hold off competitors such as Lowe’s and Home Depot who have been eating into the department store’s share of home appliance sales. One approach is engaging in a number of initiatives it hopes will help it remain as the nation’s largest seller of appliances and perhaps enable it to recapture market share given up in recent years.
The company is introducing 20 new appliances and tabletop products such as blenders and toaster ovens. At the same time, the retailer is positioning itself and its Kenmore brand as the means to help consumers “Simplify” their lives.
“The focus is on innovation that simplifies,” Tina Settecase, general manager for Sears appliances, told Reuters.
Sears is also exploring the potential to simplify consumers’ lives by offering them a different shopping option. In this case, Sears is testing standalone stores located in affluent areas that only sell appliances. Three pilot locations, according to Reuters, are currently operating in the Houston market.
“They are serving a customer who doesn’t want to go in a mall,” Ms. Settecase said.
The report didn’t indicate how the pilot locations, other than being in upscale markets, differed from the 160 standalone Sears Hardware and Appliance stores operated by the company.
Discussion Questions: What are the reasons behind Sears’ loss of market share in the home appliance category? Are the steps Sears is taking now the answer (in whole or part) to helping it reverse the trend that has seen others cutting into its lead in the home appliance business?
I need to remodel a kitchen that is 40 years old and when I do so, I will replace an older (but not original) refrigerator, range/oven, dishwasher and garbage disposal. Most of my preliminary research I’ve done via Internet web sites and one of the things I have paid most attention to is other shoppers’ comments and experiences. Sears’ Kenmore was the first brand that popped into my head, but after reading complaints about quality, it seems to me that Kenmore is no longer the brand my mother used. I’ve finally decided to order everything from the local appliance store (ABT) that supplied everything to the previous owners because the prices are just as good as at big box stores and the salespeople appear to be the most knowledgeable. I’ve come to realize that if you want knowledgeable salespeople, you really need to support locally owned stores.
My free advice is a new campaign that brands Sears as the place to go when you have a major kitchen renovation. “We’ll deliver your appliances when your kitchen is ready for them.” Provide excellent customer service with appropriate recommendations and you will see their share of the market increase. No appliance retailer has delivered on this model yet. I would also suggest rebranding Kenmore Elite. Consumers are wary of the Kenmore brand; yet, the Elite is up to the par of the most elite brands like Subzero and Bosch. Most consumers need to be educated on the quality. Make sure that the sales personnel knows their products and their competitors and offers the most reliable information. Sears can also partner with contractors and kitchen designers. It’s a start in making them stand out in the mind of the consumer.
PS: Major appliances = finance profits. Often more money is made on credit card loans at 25% interest than gross margin on the appliances themselves.
Whenever a well-run, well-capitalized competitor expands their assortment in a given category, the other competitors lose market share. Even if they’re doing everything perfectly. And no one accused Sears (or any other retailer) of doing everything perfectly. So when Lowe’s and Home Depot and Best Buy made major commitments to appliances, it was inevitable that Sears would lose share. Sears just needs to hold onto the most profitable segments and can let go of the rest. Generally, small appliances like toasters have awful margins, so the opportunity is elsewhere. The best margins: installation and service.
It is hard to get back what you let slip away. I don’t think they can get back the Lowe’s, Home Depot or Wal-Mart appliance customer. Combining with Kmart does not say “highest quality” anywhere.
People do care about price but they don’t want problems with their appliances and if there are any problems, they want them resolved quickly and time efficiently.
Start with a well educated sales force, service that fits the customer’s needs, and building a relationship with Kenmore and today’s lifestyle. They could also help customers remember how Kenmore was your mother’s choice and you turned out great.
Sears should be careful that they don’t lose all of their appliance business.
Sears has taken their eye off of the consumer…and has allowed competitors to slowly nick away at their market share. Consumers want knowledgeable associates, an easy shopping experience that works for them–location of the store and efficient delivery around their schedule–not the delivery schedule. Sears has lost market share to many competitors because it has not adapted to the consumer. You cannot stay stagnant in retail today.
Sears used to be the first place that one thought of for home appliances but that has changed. They were thought to have the best quality and certainly the best service with a great warranty. And when you went to a Sears store, the sales person was extremely knowledgeable and could answer any questions that you might have. And lastly they were usually the lowest in price.
If you have been to a Sears store lately you will be lucky if you don’t know as much about their product as they do. Hardly comforting when trying to make this type of purchase. Nice young people but with very limited product knowledge. Not sure about the warranty, but with the weak sales staff it makes you wonder what the service is like? Do they have the same type of service people? The “rock solid” reputation that Sears has always had is in question as thoughts of Sears Holding and Kmart enter your mind. Not a comforting thought. But aren’t their prices still the best? Not in our area as we found out on our most recent purchases.
Sears has a lot of work to do to return to its former glory in home appliances. It can be done but I’m not sure if I would bet any of my money on their chances.
Our recent data shows that consumers feel that Sears:
– Is more expensive;
– Has the low-end quality items made by other manufacturers;
– Has poorly trained and strong-arm tactic sales people;
– Is difficult to schedule appointments with (“We will drop off your appliance three weeks from now, sometime between 8 a.m. and 5 p.m.”)
Our data for their competitors is the opposite.
Appliance sales’ share shift to hardware retailers like Home Depot and Lowe’s can be attributed partly probably to an assortment at these stores that is better aligned with their current needs (Home Appliance and Home Improvement) which may cause consumers to perceive these other stores as more specialized and a one-stop location for their home-improvement or new home accessorizing needs. It’s cheaper to buy all your big large items from one place, since you can probably bundle delivery. Sears also needs to generate a greater understanding of what drives purchase in the different categories it operates in and which of its customers have a greater value so it can retain them accordingly. In other words they need to really get into the minds of consumers (as should every retailer).
It’s hard to sell an appliance and tell the consumer “Oh, we don’t deliver there until next Tuesday, you’ll have to wait until then!” Sears took their eye off the ball–the consumer. The consumer wants informative, knowledgeable sales people and they want to get the product in a reasonable time frame.
Sears went away for a time, focusing on their apparel line. Others–Home Depot, Lowe’s–stole their market share. Their focused ad campaign will help but they will need to focus on what the consumer wants when purchasing a new appliance…Quality, price, personal assistance and speed of delivery.
Sears’ new new look is puzzling to me. Less stock. Huge empty areas on store floor. Impulse items–like socks–moved to back hidden corner. Couldn’t buy a chair pad on a recent visit. Item not carried.
As to appliances–face it–is just putting machine after machine in a row with bright lights and shark-like sales people the answer? How many machines do people buy in their life? With a real estate downturn, appliances drop. Why not a multi-media fancy light display for featured new hot product? Not the tacky DVD player with bad audio they have now. Why not free up floor space by having features in a display–like dryer lint holders but not waste space with whole machine that is basically the same as the next machine. Why not have, again, mood lighting for the color display? Basically the appliance department makes me think of going to a public health clinic. And as much fun.
As to the softer side–I am ticked that I can hardly find my size–3x in plus women. Usually only one or two in my size come in–yet items on the sale rack are 80% small. Why stock up on items in a size that 99.99% of retailers stock, just to have to mark them down? What is the average butt-size of the Sears customer?