Even though electronics/appliance retailing is an industry where change is rapid, there are always some that won’t believe it and say something like, “There will always be a Circuit City” or “Montgomery Ward can’t go out of business.”
And you could do that with famous brand names in CE and white-goods too.
Just about every retailer and every brand has its time. And it was no surprise that Sears posted more massive losses during its most recent quarter.
The news this month that Sears fell to No. 3 in TWICE’s Top 50 Major Appliance Retailers listing, and that the chain’s parent company would “explore alternatives” for its home services unit and Kenmore, has everyone thinking about what a post-Sears major appliance industry may look like.
The obvious beneficiaries should be Lowe’s, Home Depot and Best Buy, but independent retailers that sell major appliances will also benefit greatly from Sears’ demise — probably as much if not more than when Circuit City got out of white-goods before it eventually closed completely.
As the TWICE Top 50 report shows, the shift in major appliances it has already begun with independents getting more market share. John White, chief marketing officer and executive VP of major appliances at BrandSource, mentioned to me the other day that the buying group has “seen growth beyond industry growth for the past six to nine months. It has been accelerated.”
At BrandSource’s spring meeting in Orlando in early March White said that if Sears does go away it would be better for independents if it were a slow departure. “A slow decline would be good … because it will enable independents to ramp up their businesses” and handle all that new business.
Patrick Maloney, appliances senior VP at the Nationwide Marketing Group, feels the same way. “Independents have been winning a fair share” of Sears’ major appliance business, he said, adding, “For the past four quarters independents have been gaining share.”
He went on to agree with the view that “a slow decline” in Sears’ white-goods business versus an abrupt closing would help independents.
Bob Tancula, research VP at The Stevenson Group, which is the market research partner of TWICE on its retail reports, commented that his data show “Independents are clearly benefitting” from Sears’ problems in major appliances, along with the big guys.
Tancula said that those independents that are located “right near old Sears locations, and not near a Home Depot or Lowe’s, are doing well.”
No one wants to “count a rival out,” as Nationwide’s Maloney puts it, but for Sears to survive it has to “evolve,” which is tough when you consider it still has some “bad locations, bad leases and floors that are too big,” the Nationwide exec said.
He also mentioned an ongoing trend that “54 percent of millennials want to shop locally,” which should be a real positive for independents.
No one can predict if or when Sears will either drop major appliances or disappear altogether. But the time is now for independents to gear up infrastructure and traditional and digital marketing, and tighten partnerships with key white-goods manufacturers as Sears’ market share in appliances continues to erode substantially.