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

Discussion
Mar 23, 2006
Rick Moss

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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Gail Galuppo
Guest
Gail Galuppo
14 years 11 months ago

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.

Paula Rosenblum
Guest
14 years 11 months ago
Like the panelist above, I also recently bought a new washer drier from Home Depot after researching Sears, local dealers and even internet bargains. At the end of the day, Home Depot actually had the best selection (Sears pushing of Kenmore was problematic, and reviews on the internet for their merchandise were not as good as for the LG. BUT…Home Depot really fell down when it came to delivery. I had to re-install the drier exhaust myself. All their guys cared about was getting it in and getting themselves out. If they are serious about actually doing in-home delivery (let’s call it “white glove,” they have to get better contractors. This is also true of their other big ticket installable items like garage doors. The contractor they use was the very company I opted NOT to use because they were too expensive. Home delivery is the undoing of many a big ticket company. This is where Sears still has an advantage. I would think twice before buying another big ticket, installable item from them.
Mark Lilien
Guest
14 years 11 months ago

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.

Art Williams
Guest
Art Williams
14 years 11 months ago

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.

Carol Spieckerman
Guest
14 years 11 months ago
In a day when consumers, particularly women, can and will conduct in-depth price and product rating research on the internet prior to buying appliances, the only hope I see for retail stores is perfectly-executed on-floor sales strategies that leverage but don’t contradict that information. This is what I found at Lowe’s where I made what may be the swiftest high-dollar purchasing decision in (my) history. Based on my research, I had a pretty good idea what I was looking for in a washer/dryer set, however, I wasn’t quite ready to give myself “permission” to buy that sexy front loader. A five minute conversation with a very informed young salesman sealed the deal. He was respectful, confirmed my research, and pointed me to the best choice which could be delivered that afternoon and also had a substantial rebate offer that ended the following day. Talk about instant gratification heaven for me and quick-sale heaven for him. Had it been much more difficult, I probably would have left and shopped around a bit more. Thanks, Mark for… Read more »
Don Delzell
Guest
Don Delzell
14 years 11 months ago
I believe that, in white goods – and this is backed only by some old experiential data – is that the vast majority of the consuming population expects to be informed at the point of purchase. Further, there is an almost overwhelming imperative to comparison shop because of a conviction that the information being presented is neither objective nor complete. Warehouse operations, of any kind, are not noted for their ability to deliver product information at the point of purchase. This is not an indictment, but rather a statement of the obvious. Low margins, low prices, assumptions of an informed consumer requiring little in the way of purchase assistance. Lowe’s delivers more in the way of point of sale assistance than Home Depot. The home centers ARE a very logical place for the market share to shift. But it will require the application of a different paradigm within the merchandising, staffing, and presentation. Fortunately, in the paint and home remodeling areas, these chains have already applied unique paradigms successfully. I suggest that the chain which… Read more »
Mark Burr
Guest
14 years 11 months ago
There must have been a washer and dryer ‘virus’ out there recently. I too recently went through the gauntlet of appliance shopping to replace our tired set. It was, for some reason, more of a researched purchase than many others. Why? Honestly I have no real explanation, except that it was easier to do the research. Both Home Depot and Lowe’s stood tall online. Sears actually had what I thought was the best selection. But from there, they fell flat. Their costs, delivery days, attitude and overall execution and concern for me as a consumer would get my worst rating possible. Sadly, I would have really liked to have given them a try. Ironically, with all the other outlets like Lowe’s, Menards, Home Depot, Costco, etc., it was the local guy that won out in the end. It’s a different purchase. It’s not simply the price that’s important. In fact, it’s not always even feature function as it is the overall package. At least from my view. It’s about execution – delivery availability and costs,… Read more »
Lori Flory
Guest
Lori Flory
14 years 11 months ago
My husband and I own a small “Sears Dealer Store,” in a small town in Michigan. I can guarantee that we strive to give the best possible customer service – and if something goes wrong we do everything in our power to fix it. When the phone rings, we answer it as soon as possible – no pushing a series of numbers. We sincerely feel we have the best products, especially the Kenmore and Craftsman brand names, and the Consumers Report points this out year after year, with those products being in the top 5 consistently. That being said, we hear all the time that the people “in the big mall Sears store” are somewhat rude and don’t care if they please the customer or not. Well, we do and if you haven’t tried out a Sears Dealer store (located in small towns all across the nation), please do so. I think you will be amazed at the level of service you will receive. We have many loyal customers who are thankful for people who… Read more »
joe masman
Guest
joe masman
14 years 1 month ago

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.

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