Sears CE Sales Remain Stalled, Says CEO Lacy
By Alan Wolf -- TWICE, 9/29/2003
NEW YORK—Sears' CE business remains under pressure and suffers a disadvantage in the marketplace due to its emphasis on big-ticket items in a slow economy, CEO Alan Lacy told TWICE.
The No. 9 electronics retailer, which has been reporting successive double-digit declines in comparable CE sales, has also been impacted by the preponderance of low-end, secondary brands, he said.
"Our consumer electronics business has been tough," Lacy conceded. "Our business is comprised mostly of big-ticket products with big price points, compared to the larger assortment of smaller transactional items carried by electronics retailers like Best Buy."
Lacy said that higher price point products are meeting consumer resistance due to the "difficult economy and high unemployment." Sears' assortment woes have also been compounded by the "shift to secondary brands. People won't pay a premium [for CE products] anymore," he noted.
On the bright side, he said flat panel TV — a category with big-ticket items in which Sears is making a major statement with 22 models — is now "hitting price points that will lead to more widespread acceptance."
Lacy is also moderately optimistic about the coming holiday selling season. "It will be better than last year, but it won't be robust," he said. "It's still tough out there."
Lacy was in New York to keynote the Shop.org Summit, an annual gathering of online retailers and service providers organized by the National Retail Federation (NRF). He used the forum to announce the September 30 re-launch of Sears.com, which will feature enhanced navigation, clearer product presentation, and better research and comparison tools.
He said the enhancements represent a "critical aspect" of Sears' aggressive major appliance initiative, launched last month, that's designed to win back market share from the home improvement channel with more lower-priced models, improved signage and greater in-store stock.
Also in attendance was Best Buy's e-commerce point man and conference panelist Scott Bauhofer, senior VP/general manager online stores. Bauhofer predicted that online sales of CE will outpace total industry growth. He added that Best Buy is using in-store kiosks to help draw Internet averse customers to its site.
