By Lisa Johnston
New products on display at the American International Toy Fair, held in N
It's not easy being No. 1.
Just ask Tina Settecase, who, as VP/general manager of home appliances at Sears, rides herd over the world's largest white goods retail business.
For the past year her majap departments have been under fire from many fronts: disruptive store renovations, the weak retail environment, aggressive inroads by home centers and a renaissance for independent dealers who are trading up consumers to a new generation of fully-featured products.
Though Sears remains the reigning white goods champ with a 39 percent market share — triple that of No. 2 Lowe's — the competition managed to chip away two percentage points last year, which has become the company's line in the sand.
To fend off challenges to its majap hegemony and refresh its image as the best place to shop for appliances, Settecase is unleashing a multi-pronged counterassault that addresses everything from pricing and department design to distribution and marketing. Between volleys, she outlined her game plan in a recent interview.
TWICE: Why the downturn in business?
Settecase: We had a slight decline in market share last year. One of the issues was our store conversion process. Stores were torn up as we put in new signage and fixturing.
Currently, we're right on track with the industry and our sales rate is as good as anyone's. Business is not robust, but we're keeping up and exceeding our competitors. We're hoping our market share will show that we're back on track.
TWICE: What about the home improvement channel?
Settecase: We're not Pollyannas. We realize the industry is much more competitive than it was years ago. But everyone else is playing catch up. The lumber yards are formidable competitors, but we have advantages they don't. We have Kenmore — which is the biggest appliance brand in the U.S. with a 28 percent market share — along with the other leading brands. We carry the entire breadth of the category, from low-price value products to premium models, and we have 560 stores nationwide that can deliver the next day.
We also have 13,000 sales associates who are devoted only to major appliances and can sell new product innovations better than anyone else.
TWICE: What advantages does the home improvement channel have?
Settecase: Take-with inventory. A lot of consumers prefer to carry their appliance home, rather than have it delivered. In fact 50 to 60 percent of home center appliance sales are take-with. So we're expanding our offering in mall stores of what we call Take Me Home Today products, and will actually be showing product in boxes on the floor.
TWICE: What other measures are you taking?
Settecase: We added 100,000 square feet of selling space for value products last year. We were surprised to learn that people don't equate Kenmore with value, so we're making sure we highlight the value segment, and will communicate a good, better, best story.
We'll also have new brand signing in stores by mid-June, to let people know we carry more than Kenmore.
And we're instituting a new process called ACES to make sure our associates are taking care of customers. It's based on an auto industry model of counselor selling — find out what customers need, serve as consumer advocates, and provide a follow-up to the sales experience.
TWICE: Sears announced its intention to divest its credit business. Won't that impact yours?
Settecase: Appliances won't suffer as a result of the sale. Alan [chairman/CEO Lacy] knows how important credit is to the category. He will make sure we have a relationship with the new owner that will provide customers with terms that are the same if not better than before.
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