Sears’ Strip Mall Strategy For Appliances
By George Anderson
Sears sees a future for its appliance and electronics business in strip malls.
The chain announced it plans to open 30 new appliance and electronics outlet stores in strip mall locations by the end of next year in an effort to regain market share lost to
mass merchandisers, DIY outlets and consumer electronics stores.
Karen Peters, Sears’ director of outlet stores, told the Chicago Tribune the new stores will be “about 25,000 to 35,000 square feet in strip-center-type locations, and
we typically sign a five-year lease so it allows us to expand pretty quickly with a relatively low-cost format,” Peters said.
The stores, which will operate under the Sears Appliance Outlet banner, are an attempt by the department store chain to stem the flow of customers to the likes of Home Depot,
Lowe’s and others.
Adding Sears Appliance Outlets continues on the chain’s strategy of trying to make its white goods more accessible to the public. The chain has brought in lower-price appliances
to its mall-based stores and, earlier in the year, it began selling appliances in all its stand-alone Sears Hardware stores.
“We want to expand our position in the appliance value segment by positioning the outlet channel as a viable alternative to home centers,” said Ms. Peters.
Moderator’s Comment: Is Sears’ loss of market share in household appliances and consumer electronics a result of its
products being less accessible to consumers than those in other retail formats? What are your thoughts on the company’s development of Sears Appliance Outlets?
We found a couple of troubling comments in the Chicago Tribune piece.
The first was Karen Peter’s assertion: “Our customers are willing to drive about 19 miles to get to us.”
If Ms. Peter’s is correct, it might explain why Sears has fewer customers for its appliances. How strong is Sears’ reputation for quality and price in appliances
that consumers would drive past all the other options available to them that are much closer to home?
The second troubling statement came from Jim Robisch, senior partner for the Farnsworth Group. According to the Trib, Mr. Robisch has “seen appliances
at Sears outlets that were priced higher than a Best Buy and only a shade below Sears’ full-line stores.”
Again, we ask, why would consumers make a 38-mile roundtrip for this? –
George Anderson – Moderator