Sears Wants to Be Clear About Appliances
“What
we’ve got here is failure to communicate.”
Strother Martin in the role of Captain, Road Prison 36 from the film Cool Hand Luke
Steve Light, appliance general merchandise manager for Sears Holdings, recently told Reuters, “We’ve got great things to tell and we just haven’t been saying them in a way that has been clear to the consumer.”
Now, according to Mr. Light, Sears has figured out what it needs to do to improve that communication “to re-engage and rebuild our relationship with the American consumer.”
Among the steps the department store chain is taking is opening 50 standalone showroom-sized stores in high traffic strip malls across the country, training staff to improve product knowledge and customer service, offering zero interest financing and low-price guarantees. Sears recently launched an ad campaign to make sure consumers got its new message.
Douglas Moore, president of Sears Holdings appliance business, discussed the timing of moves the company is making with Reuters.
“Although the economy today is very poor relative to big-ticket items, appliances will be a growth category,” he said.
The category is also changing, according to Mr. Moore.
“It’s moving from being a white-goods business to a multi-color, multi-platform, multi-shape business with many choices around green, style and innovation,” he said.
Discussion Questions: Is Sears on the right track promoting its hard goods side with appliances? Of the various steps it is taking, standalone stores, employee training, best price offers, zero percent financing, etc., which do you think will be most effective in helping the company drive appliance sales?
Sears has always been an appliance store to check with when you’re about to spend thousands of dollars. The smaller mall stores may be one option of getting more consumers to see their merchandise.
They’ve had Whole Home stores in my neighborhood for many years, but they still fell like a sleepy old business with everyone getting paid on commission. Perhaps they should move to this century.
I agree with everything except opening the stand alone stores. Why the added expense, when training employees and getting the message right is the key? Sears used to be the place to go for appliances because you knew they had great quality and stood behind everything that they sold, period.
When I was a young consumer in the Midwest, you really didn’t consider going anywhere else for appliances. When you think about how they have managed to lose that reputation over the years, it is really sad. That image was crafted over many years and any company would die to have that reputation. Getting it back may not be possible, but I believe that at least some of it is recoverable if they can get back on track and be consistent. They must have knowledgeable sales people that can sell the message and repair the lost image. And they must advertise it to get customers back in the stores to hear the sales people’s messages.
Sears has an opportunity here with the trust in the Kenmore name and the security of an integrated sales/service team. The competitors are great merchandisers, have good floor staff, but the service/installation piece is usually contracted out. Communicate and deliver on that promise of good value and service, and core shoppers will be there.
Two years ago I made a Sears Kenmore appliance purchase with great trepidation, would this be the Sears my parents fondly remembered and were so loyal to?
Absolutely. Excellent quality, a good salesperson, a fair price and good financing. Delivery right on schedule and done right and an item that has worked flawlessly since. Only thing I would change in my 1960s retro moment would have been uniformed Sears installers instead of outsourced provider.
This could be a great re-use of some of the space in current Kmart stores and lease the remaining storefront to merchants who might naturally cluster around a big box appliance store.
As a consumer, I would really enjoy a store that is only appliances, tools, lawn equipment, and sports equipment. Sounds a bit like “guy town” but those are all Sears strengths, or could be again.
It’s very smart of Sears to re-invent itself. They can’t compete with other mega-retailers and now with Kmart in the portfolio, it becomes more important they evolve. Sears was once retail king, but competition and retail specialization has led to consumers eliminating it from their shopping repertoire.
Sears will not increase sales of appliances targeting it’s current core consumer. Stand alone stores are critical in re-introducing their appliances to old consumers and in attracting new entries into the franchise. Employee training, financing, and other attributes are simply the price of entry.
Although this might signal the beginning of the ‘long overdo’ end, in my opinion, Sears will maximize their shareholder value by SELLING the entire Sears Appliance-Craftsman-Diehard lines before they completely destroy them. A trip to Bentonville or Kirkland would likely bring a bid for the Appliance Business and the associated Installation and Service that is so critical to success in this business. Sears has been losing share to Lowe’s and Home Depot at an accelerating pace–it’s time!
Sears Appliances needs to get back to the basics of selling and selling it right. This means that once it’s sold they must support what they sell. This includes the sale, the delievery, the installation, and the service of the product they sell.
Sears is not in sync do this. I know of many experiences by people who might have a great experience at the store then wind up having a terrible one upon delivery, installation, and or service or a combination of more then one of these. Trying to get help to solve a problem is also a fiasco for customers as I hear. If Sears wants to survive the must get back to the Basics by making sure that the company acts as one.
Customers would prefer good secure service in all these areas above the best price. It doesn’t take a genius to figure out how to gain customers, all it takes is good products and service, service, and service. What I have heard from people that work at Sears is that management is quick to point fingers and doesn’t support the follow-through process to satisfy the customer.
In order to run a successful business, it’s important that management support their sales force and make sure they have all of the tools and support needed to satisfy the customer.
Another thing Sears must do is make sure their sales force is second to none, and not hire just anyone. The salesperson is the front line for any retail store and should be held to a professional, mature standard with good compensation for them.
I would like to see Sears make it, as I’ve been a customer for over 45 years and it is disheartening to see them struggling due to incompetent management from the top on down for lack of good service.
While growing up, my mother always told me that when it came time for me to buy an appliance, always go to Sears and buy Kenmore. I think I’ve disappointed her (again?) because I don’t think I’ve ever heeded her advice in this area. How can a brand lose so much equity in the span of a single generation? I’m not so sure Sears will be able to execute their vision, but they’re talking the right game plan.
As for what tactic will prove to be the most important element of their strategy, that’s nearly impossible to narrow down. The appliance category is so competitive, with razor thin margins, that you’ve got to have every piece of the puzzle in place.
But, I’ll say this: Selling appliances requires sales staff to be at the top of their game. Conversion rates are impacted immensely by the quality of the sales teams on the floor. They’d be wise to invest a lot of time and resources on the development and implementation of a proper sales training system.
Great move by Sears; they are finally playing their trump card. This is the one area that I think the consumer still perceives that Sears has a point of difference.
When it comes to the question of which strategy is going to make this program work, in today’s tough retail environment it is not any one thing. They will need to implement the training, merchandising, pricing, and everything else, with almost flawless perfection.
Sounds to me like another empty press release from Sears. I see no upside. They will need to spend money to open stores. Best prices mean they would need to match some other retailers selling at cost so their is no money there. Zero percent interest on something they are selling with minimal margin.
This will probably end up like all the other grandiose ideas from Sears during the past few years. Most likely, Mr. Light will see the light and be working for someone else in three months.
I recently had the opportunity to buy a number of appliances from Sears for a kitchen remodel. Service was great, handling and communicating my options for free financing was great, on time delivery was great, courtesy was great and pricing matched and then gave me an incentive on the difference was great. All beyond my expectations.
If they can figure out how to communicate that, they could be on the right track with this particular segment.
“We’ve got a vision…to re-engage and rebuild our relationship with the American consumer,” said Steve Light. While Light is the Appliance General Manager, one would hope all Sears people are thinking that way.
I find all of the strategies mentioned to be positive. I am a bit surprised that employee training is one of them. If employees have not been properly trained to date, that indicates a structural problem in the entire Sears business. Beyond that however, price and financing will be keys to moving appliances.
The stand alone stores are an interesting strategy. I would suggest that there are two primary elements to these stores. The first is that they are in a competitive geography to Home Depot/Lowe’s. The second is that they are parallel their in-store sales process with an online process assuring customers that the appliances are in fact the best, at the best price, with the best service, etc.
They don’t need a bunch of standalone stores on strip malls. They need a good, solid ad campaign promoting the quality and value inherent in Kenmore and Craftsman. These brands are still good, but they have sold themselves via word-of-mouth and not much else for the last couple of generations. They’re slowly fading, and it’s just a shame. If instead of these new stores they’d put the money into a good, well-thought-out consumer ad campaign, with informed salespeople in existing stores, they’d start to get it all back.
I believe they need to do more to distinguish themselves from big box stores that carry appliances but do not have trained salespeople.
I recently purchased an entire kitchen’s worth of appliances from Sears. I was browsing at Sears and discovered they carried a variety of brands (including Electrolux) and their salespeople were extremely knowledgeable. Before that day I had always assumed they were competing with Home Depot, Lowe’s and Best Buy. It never occurred to me they could compete with specialty appliance stores.
There is nothing exclusive to Sears, as their own store brands are made by OEMs that make the same product as different chains.
What can you get at Sears that isn’t cheaper elsewhere?
I’ve been a pretty harsh critic of “the many changing faces of Sears merchandising” over the years. But this is as good a shot as any. If Sears has any equity left–it is in Kenmore and Craftsman. Maybe they could marry the two brands with “major appliances for him and her.”
Of course, the issue is that Sears has let everyone and their grandma into this space now. From ABT to Best Buy to Home Depot to Sam’s Club. It’s going to be tough. As for leverage, it’s hard to beat best price right now, but I’d go with “best employee knowledge and customer service” over the long haul. My 80-something parents still refer to Sears money back guarantee as a euphemism for “something you can trust.”
Ho Hum. Another drippy moment waiting for the paint to dry at Sears. More of the same. It’s like watching my St. Louis Rams lately. Sears, get a plan and get in the game!
It’s a good way to reinforce one of Sears’ traditional strengths. But as pointed out above, it will be difficult for Sears to succeed. Low margins, hyper-competition from retailers like Best Buy and the need to spend more money on retail space may cripple this effort soon after it gets off the ground.
Appliances are Sears’ core business, but is Mr. Light’s new strategy “too little, too late”? Does the company have the ability at this late date in its decline to come up with yet another store format? Seems to me that a big-box format to compete with Best Buy, Lowe’s and others could have been developed years ago (including converting Kmart sites to this new concept) but it didn’t happen.
I have to agree with Sears that they are not communicating well with the American consumer. Kenmore is a great brand that can stand on its own but it is being swept up in the disorganization and lack of execution at the store level.
Selling Kenmore on its own in a stand alone location? I don’t think this is the right time for that as consumers are re-prioritizing their spending and I don’t believe hard and durable goods will do well in the next year or so. If they really offer something different (as all other retailers are offering the same perks and promos in the hard goods category), they may be able to capture and grow market share. But I’m not sure what they could differently.
Sears needs a new gimmick or angle for this to work. Fixing your lines of communication with your customer and offering 0 percent financing is not going to make this work. There has to be much more as competition is fierce and the secondary market that supplies customers for this category (the real estate market) is drying up very fast.
I guess admitting you have a problem is always the first step at fixing a bad habit but there is no excuse for bad timing and poor decision making. They really need some fresh perspective over at HQ.
The thought, perhaps, behind opening these new stores is that it’s less expensive to take advantage of existing foot traffic than it is to try to divert it to existing Sears locations. Think about it: nothing has to change about the shopping patterns of the patrons of these strip malls. If these consumers do not typically shop Sears, then the locations give Sears access to new potential consumers. The cost and process of inducing behavior change which would result in more foot traffic to Sears–just for appliances–is astronomical.
As for focusing on appliances: it’s a remaining strength with measurable consumer uptake and a legitimate value proposition.
No interest financing: assuming Sears has the cash to do this, it’s brilliant. Credit is DRY…for everyone, and in particular, for those with tight mortgage payments. Getting free credit from an entity like Sears is fantastic. It MAY make possible the ability to replace or upgrade where otherwise it was impossible.
The “bet” here is that sales elasticity from the new locations will be high enough to offset the costs of operating the new locations, which should be looked at as alternative marketing costs.
Good idea. Why not? Another ad campaign? Please. This is creative, aggressive, leads from strength, and just may work.
Sears needs meaningful and relevant differentiation in its category selling model to garner trial. IMHO, their weakness is the in-store shopping experience, especially the human connection–the sales associate. The ad I saw portrayed the sales person as female, under 35 and helpful. I think those are good ideas, but the message and the in-store experience are not in harmony.
Based upon my experience, each support point was an over-promise.
Too bad that Sears, who had the lion’s share of consumer perception as the best place for appliances for so many years, let it all slip away. In a battle for perception, getting it back by opening stand alone mall stores is expensive, and perhaps way too late. Consumers don’t tend to trend back when it comes to perception.
The Kenmore brand still retains equity in the marketplace, and is one of Sears’ few marketable assets. I agree that it requires a highly skilled sales force at store level. I’m not convinced that opening appliance-only stores, however, is a good idea. The product offering seems a bit narrow to handle economic ebbs and flows. Ultimately, the appliance business is tied to the fate of the department stores, and that’s not promising.
You are supposed to start competing when you hear the gun fire at the starting line, not when the race is half over! Sears used to be an innovator in this very market, then went stagnant and let all the competition take the lead and now they think they can get it back. TOO LATE!!!
I’ve worked for Sears selling major appliances for quite a number of years and up until several years ago one could make a living at it without retirement or social security income. That is not the case now.
If Sears management at the Hoffman Estates level want to find a solution that works then they need to visit the stores and work the front line for a while. There are so many things related to customer service that are not working in the best interest of the customer that even the best ideas will fail. At one time employees were empowered to take care of the customers from the sale through the delivery. About three years ago that started changing to outsourcing within the U.S. and outside. Ever try to call and talk to someone that can’t speak English or understand the problem? Maybe both? Ever try to call a store and not be able to get thru to your salesperson?
The list of things that have hurt Sears goes on and on and most of it is not related to pricing, delayed billing, free delivery and so forth. However, lack of inventory availability and adequate delivery scheduling have also hurt.
Unless someone in management has worked the floor for a while, Sears upper management will never have clue as to the hoops sales people have to jump through to get the job done. Too many high powered ideas by the executives that are not getting involved enough at store level to see what the real problems are.
I recently went to Sears to contemplate purchasing a new dryer. We had the Sears repairman look at our current dryer and he said we could get it repaired for about the same price as a new one. So he gave us a coupon for the price of his visit which we could then apply to a new dryer. (Good marketing I thought.)
However, the trip to the store was disappointing. The woman who waited on us was not knowledgeable and she referred us to the website. Few of the appliances displayed a clear energy efficiency rating which we were interested in comparing. Many of the sale signs were not clear. We were looking for a black dryer to match our existing washer. It turns out that the black models are often more expensive and not on sale nearly as often as the white models. So we decided to have our current dryer repaired at less cost than a new dryer.
The best thing about Sears these days is their free Lands’ End returns.
Sales staff that know what they are talking about will go a long way. Price, financing, and all other area’s of a sale can be adjusted. Nothing compares to product knowledge by sales staff for customers.