Sears Shows a Softer Side

Sears has to make some defensive moves like this to protect its franchise in appliances. Part of the reason is the company's fading market share in softlines; part of the reason is driven by the economy. This feels and sounds like some of the payment guarantees issued by the car companies recently, and is probably going to be effective in reviving some traffic in its hardline departments.

Richard Seesel, Principal, Retailing In Focus LLC

If the car companies can do it, so can appliance retailers. This is a smart re-use of a solid strategy for durables. Kudos to Mr. Brown at Sears. I plan to chat this up, it can help people all over the country!

Anne Howe, Founder, Anne Howe Associates

One aspect of the program at Sears that this article fails to mention is Sears' lowest-price guarantee. A consumer can check competitors' prices at Sears and Sears will beat the lowest price. This feature, more than buyer protection and lay-away, should grab consumer attention.

Sears has always been strong in appliances. The new, lowest-price guarantee is a bold move on the part of Sears, but then again, Sears needs bold moves and low prices if it is going to survive.

Max Goldberg, Founding Partner, The Radical Clarity Group

I doubt this will be very effective. My guess is there is a lot of fine print. I'm sure there is a limit on what they would pay. Someone like me could just go in, buy some appliances, and then fire myself from my corporation. The finance charges have to be huge to make this work.

Think about it, it only costs a few thousand dollars to fully equip a home with appliances. Anyone who is so broke they have to finance that little amount of money is in serious financial trouble to begin with. I can see financing a house, perhaps a car, but appliances? I think they are better off with lay-away. That way the item doesn't leave the store until it's paid for.

David Livingston, Principal, DJL Research

Margins, peace of mind, brand loyalty, and store loyalty all make this worthwhile. This is true credit, like the old days, and Sears is making it profitable. The winners will outweigh the losers, and Sears will ultimately win, both now and in the future. Great strategy for a winning position.

Kai Clarke, President, Miraclebeam Products, Inc.

I don't know if this will lead to new business, but the metrics are interesting. Assuming Sears is running a good margin, if Sears can generate a higher rate in incremental sales than people losing their jobs, they come out a winner.

While we haven't turned the corner yet on job losses, the bulk of the losses are largely behind us...I hope. With the recent job losses of another 500,000, the unemployment rate will hit 10%. It is not likely to go to 12% and if it goes to 15%, Sears and all retailers' problem will be more serious than lost margin on Buyer Protection program.

Gene Detroyer, Entrepreneur, Advisor, Consultant, Professor, Independent

This could be a good move for Sears, as their name still says quality and service in home appliances to many shoppers. Execution is the key, as other channels like furniture and electronics are looking to simplify purchase with enhanced terms and provide service options.

D-I-Y stores are not able to match the in home service and warranties--yet. Sears customer and credit services are gaining a reputation as complicated to navigate and resolve. If Sears moves quickly to sort these issues, they may differentiate and move ahead as the economy strengthens.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

This is a good strategy for Sears. I think the consumers will appreciate this and anyone who has concerns about making a bigger appliance purchase with the economy the way it is will look to this kind of a program to help them decide on the purchase. Until other major appliance sellers make this kind of a move, Sears will have the advantage.

Scott Knaul, Director, Retail Strategic Services, Workforce Insight