Photos: Sears Holdings
Sears extends iconic brands in surprising ways
Sears is introducing Kenmore TVs, DieHard tires and adding a few Craftsman connected-home devices to maximize the value of its star in-house brands.
Among the extensions:
- Kenmore, introduced in 1913 as a sewing machine, is launching Kenmore-branded HD and ultra HD televisions. To serve the connected home opportunity, the company will also introduce a smart refrigerator, smart washer and smart thermostat. Kenmore is best known for its refrigerators and dishwashers.
- DieHard, introduced in 1967, is introducing its first line of tires. The brand is also coming out with a Bluetooth speaker and smart charger. It’s best known for automotive batteries;
- Craftsman, introduced in 1927 to support demand for automotive tools, is introducing its first connected-home devices. They include a remotely operated garage door opener and Bluetooth-connected smart lock tool storage units. Beyond tools, Craftsman specializes in lawn and garden equipment.
“We’re unleashing the power of these iconic brands by entering into these new categories and introducing connected home solutions that provide peace of mind — saving time, energy and money,” said Tom Park, president of Kenmore, Craftsman and DieHard brands, in a statement.
While demand is somewhat unknown, Kenmore and Craftsman may position Sears better than many other retailers to capitalize on the smart-home opportunity.
The bigger surprise was the introduction of tires and TVs. Sears told the Wall Street Journal that a survey asking consumers to rank their top 15 TVs — adding DieHard as an option — saw DieHard rank third. Kenmore also makes laundry machines, cooking ranges and gas grills, and vacuums, but hasn’t dabbled in consumer electronics.
After a disappointing first quarter, Sears said it was exploring selling its in-house brands at other retailers beyond Sears or Kmart, but it has not yet offered further details.
- Kenmore, Craftsman And DieHard Brands Enter New Product Categories, Launch The Next Wave Of Products For The Connected Home – Sears Holdings
- Sears to Sell DieHard Branded Tires – The Wall Street Journal (sub. required)
- Sears Quietly Launches First Kenmore-Branded TVs – TWICE
- Sears Takes Its Kenmore Brand Out Of The Kitchen With New Line Of TVS – Digital Trends
- Should Sears sell its Craftsman, DieHard and Kenmore brands? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Do you see Sears’ moves to extend its Kenmore, DieHard and Craftsman brands into other categories as long overdue or a stretch? Which extensions for its iconic in-house brands make the most and least sense?
Poll
BrainTrust
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Anne Howe
Principal, Anne Howe Associates
Brands have positions in people’s minds. don’t mess it up with extensions beyond the pigeonhole that works. DieHard is automotive and long-lasting. Don’t move it from the garage into the house. Craftsman is for the shop. Kenmore is appliances. Within those areas there is plenty of room for extension or accessories. Outside those areas, it just muddles what has already become weak.
Branding is not just putting a name on something. It is putting a meaning on something.
All of these brand extensions make sense to one degree or another and are long overdue. And it’s not as though the brand names are being applied to incompatible merchandise categories — they’re not. The question is whether these changes can drive significant incremental sales, or whether Sears as a traffic draw is a lost cause. In any case, some of them will work better than others but it’s all worth the effort.
At the same time, there has been plenty of talk about “selling” these brands outside of Sears itself. Brand extensions with the demonstrated ability to drive sales can only enhance the value of the brands if they end up in the hands of other retailers.
Many of these products seem like long overdue brand extensions, but I wonder if Sears has done the work to understand consumer demand and if the demand translates to willingness to shop at Sears. The brands are iconic, but a broader retail distribution strategy might be the real key to success in new categories.
Long overdue — and timely. Sears must extend itself into the future — the Internet of Things. This extended branding is how Sears can maintain and grow its audience in a meaningful way, and make itself relevant to shoppers again. All of these extensions make sense to me.
It appears that [at least someone at] Sears is attempting to bring current products into the assortment. Leveraging established brand names, as these all are, is a terrific idea but only if the products make sense and are at least of the same quality or better than those that made the brands a trusted, reliable line of products in the first place. Adding a TV to the Kenmore line, tires to the DieHard line and connected home devices to the Craftsman line all make sense (to me) because they do not deviate from the original category dramatically, but do in fact extend the category. I hope that Sears succeeds with this approach!
For the most part, these extensions seem to make sense based on the products listed. Having said that, the quality of these items will need to match these iconic brands or it will end up being a negative and hurt the brands. Although this sounds like a good idea, it will also depend on how much time it takes for sales to build.
I was the first brand director of Kenmore and created strategy to move Kenmore into super premium. As CMO of Western Auto and Sears Auto Centers, I was deeply involved in testing the elasticity of brand DieHard. So I know enough to be dangerous. Gene is right, KCD all hold unique positions in the mind, they vary based upon how that mind is engaged in a given category and how they perceive brand Sears.
At the core, there is a symbiotic relationship between the product and outlet brands. As went Sears so did KCD. As new outlets challenged these category-creating brands, they took share from the product brands as some of the outlets tailored the selling model in each category and therefore were more relevant. There’s more to it, but lets just say “these old dogs don’t hunt so well anymore and really struggle away from their master.”
Or as we also like to say, “retail ain’t for sissies.”
I don’t know if Sears can be remade (I think not but that’s another issue) but these are logical extensions that make sense for the items/brands listed. I think Sears needs to do what Walgreens did. Before, their stores were crammed full of merchandise piled high on the shelves and the stores were junky. After they bought Duane Reade, they let DR help shape their future, and with both DR and Walgreens, they created “flagship” stores. Flagship Walgreens are nice stores with atypical outstanding features, like sushi bars, ice cream machines, growler bars and a totally kick-butt beauty section comparable to/nicer than Ulta. The organization within the store is much nicer than the old Walgreens store, even if the standard aisles are still pretty typical. Sears needs to rethink their stores, and if they are committed to staying relevant and a viable business, they need to stake some ground on creating a new — either from the ground up or in whatever remains of well located stores — set of “flagship” stores to wake up the company, the brand and the sub-brands.
The appliance stores haven’t done it because they aren’t at the level of a PIRCH (the new home store in NYC). Other examples Sears could learn from include the new Canadian Tire “Showcase” store in Edmonton and the way the Hointer Beta Store in Seattle is upending the way that store floors are used as warehouses vs. showrooms. Yes, the tool section needs to be reconceptualized as the coolest hardware store around (like that green-oriented store in Austin, called TreeHouse), and the appliance section needs to be set up like PIRCH, etc. (I guess you could say this was what Ron Johnson was trying to do at JCP. But my comment at the time is that it made sense in certain locations, but not at most JCP stores. Differentiation and segmentation is key). And the Sears Auto Stores need to be better conceptualized and branded as one-stop reliable repair places. Sears still has tremendous brand equity in our old relationships with the store as a reliable place to shop and a decent company to deal with.
Within the narrow confines of the question, Diehard/tires makes the least sense, but the bigger question, of course, is whether or not Sears’s individual brands can survive the general decline in the Sears brand itself. You can’t sell anything if no one walks thru the front door…and fewer and fewer are walking in.
Sears as a brand name feels like it had its best years in the 70s. Diehard, Craftsman, and Kenmore are still relevant, fresh, and powerhouse. What’s to think about?
As we see more adoption of connected devices and the proliferation of Internet of Things (IoT), more companies will need to expand their product offerings to include digital capabilities. And as products include more digital components, the corresponding brands will need to decide whether it makes sense to use their own electronics or use third-party electronics. If they opt to develop their own branded electronics, then it will provide a logical transition to extend their brand with stand-alone consumer electronic products. The issue with extending core competencies to consumer electronics is that is will probably very difficult with electronic device companies that have been doing this for years.
There is no question that Sears owns brands that have compelling value and potential, maybe the most value in firm after the real estate, but that is a different discussion. Brand extension makes all the sense in the world and is way overdue. However, when extending a brand, value is often maximized by choosing adjacent product segments, attacking segments with either weak or few competitors, and investing in the market and operational expertise to drive success. I’m not convinced that Sears has done this and will maintain the commitment necessary to ensure success. As a “die hard” Kenmore and Craftsman loyalist, I hope they can pull it off in a way that creates real value … but I have my doubts.
Long overdue, but I wonder if it is too late. The brand extensions should have happened many years ago. Kenmore appliances -> TV is natural but the market is already saturated, DieHard tires could have some headway but consumers have to decide whether they see that the performance of the tires matches the brand. All in all, it is something Sears has to try at this point to be relevant.
Looking at this question from a practical point of view, Sears is wise to pursue further monetization of its core product brands as an answer to its otherwise flagging fortunes.
Mr. Lempert has made structural changes to the Sears business by closing stores and shifting ownership of real estate between entities. As a further protection of the core assets, it seems a sensible strategy to accentuate the positive in the world that is Sears. DieHard, Craftsman and Kenmore are strong brands and they can not only be extended through additional product introduction, but also sold through external channels.
The future value of Sears as an entity may come down to the value these brands create.