Dive Brief:
- Sears Holdings has teamed with Amazon to sell and distribute Kenmore appliances through Amazon’s e-commerce network. Sears said in a press release that the partnership will ultimately include the full line of Kenmore appliances throughout the U.S. Kenmore, Sears Home Services and logistics provider Innovel Solutions will service the delivery, installation and extended product protection for the appliances sold through Amazon.
- Deepening the relationship with Amazon, Kenmore’s smart appliances will connect with Amazon’s Alexa virtual assistant and allow users to control Kenmore's line of smart appliances through Alexa by using voice commands, Sears said.
- The partnership represents the widest distribution for the Kenmore line outside of Sears' stores and website, according to Sears, which did not disclose the terms of the deal. The troubled department store retailer’s stock rode a nearly 15% bump in premarket trading on news of the partnership.
Dive Insight:
With mall traffic declining, Sears stores closing at a rapid rate and more commerce shifting online, Sears would seem to have little to lose by teaming with Amazon to sell its wares.
Although appliances remain a bright spot for the company, Sears in recent years has lost its spot as the No. 1 seller of appliances, ceding it to Lowes, and is close to losing the No.2 spot to Best Buy. J.C. Penney is also trying to take share from Sears.
Sears’ Kenmore brand, specifically, needs all the exposure it can get right now, as its share of the appliance market has slipped from 40% some 20 years to around 12% today. But exposure does not guarantee that customers will buy it. Many of Kenmore’s customers are over 50, and the brand holds less sway over younger shoppers, as Reuters has pointed out.
Sears’ widely publicized financial troubles can’t help sales either, as it raises the specter of warranties potentially not being honored should Sears slide into bankruptcy. Sears could also face supplier issues with Kenmore if its balance sheet woes persist. This year the company has already had public tussles with two of its Craftsman tools vendors, and reports broke in March that suppliers were wary of the retailer.
Ultimately, it might be that Sears’ endgame through the Amazon partnership isn’t selling more Kenmore products, but rather selling Kenmore itself. Sears has recently shopped the brand around without success. On the other hand, Sears’ sale of the Craftsman brand to Black and Decker was worth $900 million — money that helped the company’s ailing bottom line but dismayed some observers who saw the brand as one of the company’s few remaining strengths.
Who knows — Amazon could be a prospect, if it likes what it sees of Kenmore sales through its website. The e-commerce giant has to date made little headway into large appliances. Electronics and appliance trade magazine Twice notes that bulky appliances so far have been largely protected from e-commerce incursions, leaving Amazon with a “relatively paltry appliance pot.” But, as The Wall Street Journal reported earlier this year, the e-commerce giant is trying to change that with a major push into furniture, appliances and other large home goods.
