The Wall Street Journal reports today about Sears' moves to expand the sales of its Kenmore line of appliances to other retailers, such as Costco. A decision to move in this direction offers peril and promise. On the one hand, Kenmore is a strong brand likely to sell at other retailers. On the other hand, every sale at another retailer diminishes foot traffic and associated sales at a Sears store.
The decision raises a broader long term strategic question though. Sears has struggled mightily in recent years. Some question whether it can ever reverse this slide. If that is true, perhaps Sears could gradually be transforming itself from a retailer into a product company. It already sells Craftsman and Diehard branded products at other retailers. Could Sears one day no longer be a retailer at all, but instead be a home and garden products firm with a stable of strong brands (Kenmore, Diehard, Craftsman, etc)? As the retail business continues to decline, this may not be so far fetched.
1 comment:
The biggest problem for Sears is that they don't have a convincing answer to the question:
"Why should I shop at Sears?"
They have major competitors in every category, against whom they have no discernible comparative advantage. To wit:
Hardware: Home Depot, Lowes, Walmart
Tire and Automotive: Any number
Clothes: Wal-mart all the way to Macy's
Small Appliances: Wal-mart, Target, Amazon
Electronics: Best Buy, Amazon
Appliances: Best buy, independent appliance stores
Their Kenmore range (as I understand it) is mostly stuff made by contract manufacturers.
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