Sears expands tire collaboration with Amazon
UPDATE: Aug. 28, 2018: Sears said Tuesday that it is expanding a tire service partnership with Amazon to include the entire U.S., after initially testing it at a selection of stores, according to a press release. "The response from Amazon customers around this program has been extremely positive,” Mike McCarthy, vice president and general manager of Sears Automotive, said in a statement. Sears stock price saw a 17% spike after news of the nationwide expansion, according to Seeking Alpha.
Sears Holdings and Amazon are expanding their collaboration around Die-Hard tire sales, with an additional 71 Sears Auto stores now set to install tires bought on Amazon's website. That brings the total stores involved in the program to 118, Sears said in a blog post Tuesday.
The expansion is two months ahead of schedule, and more locations nationwide will be added in coming weeks, Mike McCarthy, Sears Automotive vice president and general manager, said in the blog post. He added that 90% of the Amazon customers are new to Sears Automotive.
Sears first announced the tire partnership last month.
As with the purge of some of its most precious assets, including last year's sale of the popular Craftsman brand, many have been skeptical of the tightening bond between Amazon and Sears.
Their partnership was sparked about a year ago, when Sears began selling Kenmore appliances on Amazon and connected its smart appliances to the Alexa voice platform. Later in the year, Sears began selling some DieHard products through Amazon. Then last month, DieHard all-season passenger tires and the Sears Auto Service were added (where any brand of tires can be installed at the select locations).
The moves are meant to both expand the distribution of Sears' private label products and reach new customers via Amazon, though so far Sears has not disclosed how much revenue any part or the whole of its partnership with Amazon has generated. McCarthy said that "customers are taking advantage of additional services during the tire installation process, such as oil changes and alignments."
While selling on Amazon can be tricky for most brands because of the e-commerce giant's access to customer and sales data, Chico's, Lands' End and now Sears have said in recent weeks that Amazon has delivered them new customers. Indeed, some observers do see the Amazon-Sears play as beneficial to both retailers.
"The locations of Sears offers the potential for Amazon to provide mechanical services," Camille Schuster, president of Global Collaborations, said in a RetailWire asked its BrainTrust roundup last month. "In addition, Amazon would then have the potential for using those locations for pick-up delivery. For Sears there is the potential for changing its business model to one of offering services. A good experiment."
The enduring nationwide popularity of Sears Auto Centers could even be appealing enough for Amazon to take over, according to Phil Masiello, founder and CEO of Hound Dog Digital Agency. "Believe it or not, Sears.com still has about 1 million site visits per day. So, there is still something valuable in the website assets," he said last month.
But other analysts question whether the partnership means much for either Amazon or Sears. "To be fair, in this instance Sears can add genuine value as its auto centers are not at all bad," Neil Saunders, managing director of GlobalData, said. "However, this venture does nothing to change the fact that Sears is broken economically, that its core retail business remains a hot mess, nor that it has very little idea how to extract itself from its difficulties."