Looking to take an early lead in the flat-panel TV market, Sears, Roebuck and Co. formally announced it has added LCD and plasma TV sections to more than 650 stores nationwide.
The move is one of the chain's most dramatic steps into a high-end electronics category.
Ray Brown, Sears electronics business general manager, said the decision to add "thin-TV shops" in the electronics department came after carefully studying the market for the past year. During that time, he said, prices on plasma display panels (PDPs) came down dramatically, while consumers showed an increasing willingness to spend more on quality electronics.
Sears will devote about 8 percent of its electronics department floor space to the new section.
"We view this as a long-term investment for us," said Brown, who added that he expects Sears to eventually become the country's largest flat-panel TV retailer. "This industry is coming and it's coming hard, and we are not going to be playing catch-up to anybody."
Although sales from the merchandising array may initially be low, Brown said he expects "the wow factor" of flat-screen TV will increase foot traffic into the electronics department.
Brown said Sears is opting to display the plasma panels on stands, rather than mounted to walls, in part because it will attract some projection television shoppers, who are concerned about cabinet bulk.
"When you display these things on walls, consumers say 'that's slick, but I could never do that,' but when you put them on stands it resonates better with consumers, who see them as a real alternative to a projection television," Brown said.
Sears will stock seven LCD TV panels and four PDPs. LCD models will come in either standard or high-definition capability, and will range in price from $1,199.99-$2,999.99. Sears has selected Panasonic, Philips and Samsung as its initial LCD suppliers.
The thin-TV shops will also feature four PDP models from Hitachi (32HDT20 and 42HDT20), Panasonic (PT-42PD3-P) and Samsung (SPL4225K), at prices ranging from $5,499-$8,000.
Reports from an early 28-day market trial showed sales of LCD TVs and PDPs almost even.
To support the line, Sears has contracted with a Sears-authorized national A/V service company to provide installation and set-up services.
Brown said that due to the weight and complexity of the PDP products, Sears will require one of three installation service tiers with each purchase. Plasma installation fees will run $499 for a basic stand mount and basic component set-up, $549.99 for a wall-mount and surround-sound set-up, and $649.99 for a wall-mount, with surround sound set-up including in-wall speaker and wire installation.
To support the program, Sears plans an extensive advertising campaign, including both print and television spots. It will also advertise the line on the www.sears.com Web site.
The television campaign, slated to kick off the first week of October, will include 60-second direct-response ads, because, Brown said, "we felt there was a story that had to be told here, that we couldn't do in 30 seconds."