Home Depot and Others Fill in the Appliance Vacuum Left by Sears


By Rick Moss
According to data from research firm Stevenson Co., Sears Holdings Corp. is still the U.S. appliance market leader, with 34.1 percent share in 2005, but that’s down from 38.7
percent in 2002. Meanwhile, others are not sitting idly by and waiting for Sears to find a way to reinvigorate consumers’ interests in the Kenmore brand.
On Tuesday, as reported by Reuters, Home Depot merchandising and marketing chief Tom Taylor said the D-I-Y chain has “some pilots underway” to see about adding more brands
and expanding floor space devoted to washers and refrigerators.
Currently, Home Depot, which is “speaking to other companies,” sells appliances by LG Electronics, introduced last year, as well as washers and refrigerators by General Electric
Co. and Maytag Corp.
Taylor was optimistic about the chain’s ability to convince customers to go for high-ticket items based on other experiences they’ve had recently, such as the sale of $3000 built-in
kitchens and large home improvement installations.
“We see customers across every department shopping up our assortment,” Taylor said.
Home Depot has nearly doubled its market share in appliances over the past three years, from 5.5 percent to 9.7 percent last year. Although not as dramatic, it’s a similar story
at rival Lowe’s, that grew its market share to 15.8 percent from 12.8 in 2002. This trend seems characteristic of the home center channel only, as Best Buy’s market share has
remained flat, at 6.2 percent for the period.
Moderator’s Comment: What’s going on with the appliance business? Will the home center channel become the market share leader, or is this just a phase
while the traditional outlets turnaround their strategies? –
Rick Moss – Moderator
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9 Comments on "Home Depot and Others Fill in the Appliance Vacuum Left by Sears"
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Sears still has the best customer experience and product selection in appliances compared to the big box retailers. What is hurting Sears appliance business is the lack of relevance of the total store offering and the decline in traffic.
If someone is going into Lowe’s or Home Depot every other month, they will continually be reminded of the appliance products and the stores will be top of mind. If someone only ventures into Sears once a year when they need a big ticket product, the store will eventually fall out of the consideration set.
I feel Sears appliance market share decline is due to overall reduced traffic and fewer trips to the store.
Lowe’s showed Home Depot that there was big money in white goods (large appliances). Home Depot has some catching up to do, and it will continue to be handicapped by the mediocre quality of its salespeople’s performance. Sears is handicapped by two issues: (1) its reputation as a place to buy appliances only if they’re on sale and (2) its salespeople’s reputation for having high-pressure “commission breath.” Every bricks and mortar retailer has to compete with internet pricing and its ultralow margins. The strategy? Every chain tries to get its own unique models from the famous brands, to prevent the assortment from being price-shopped. But many customers realize that the slight differences aren’t worth worrying about. The consolidation of manufacturers has also cut retailers’ margins. The margins would be even lower if it wasn’t for the recent entrance of European and Asian brands.
I believe that Home Depot and Lowe’s will continue to gain market share in appliances at Sears’ expense. Sears has lost their way and it looks like they are headed down the slippery slope with Kmart. Nothing that I have seen from their new leadership gives me any confidence that things will improve. Having recently purchased a new washer and dryer, my search took me to Sears, Home Depot, Lowe’s and the local distributor that I finally bought from. Sears had a very good selection, fairly knowledgeable sales staff, but non competitive prices. And the atmosphere in the place was depressing.
I have been reading the articles with interest and frankly I am puzzled. With all of the brands that Sears has and the “community flavor” that exists in the independent Sears Dealer Stores, why would anyone buy elsewhere? The Sears home service fleet is second to none. As to price, remember that Sears will match any price on the same appliance and secure that offer for 30 days. In fact, when you come in with an ad when purchasing, Sears will not only match but will take another 10% off for your trouble.