As VP/general merchandise manager for Sears home appliances, Tina Settecase is arguably the most powerful woman in white goods. Which helped explain the packed room and rapt attention of attendees during her keynote address, delivered here last month at the Ocean Reef Club during the Annual Meeting of the Association of Home Appliance Manufacturers (AHAM).
The presentation broke down in fine detail the current state of Sears’ major appliance business and the retailer’s plans for that segment going forward. What follows is a synopsis of her address.
As the nation’s No. 1 major appliance retailer, Sears presently has a 37 percent share of all white-goods sales at retail, and as the No. 1 appliance brand, its private label Kenmore line has a 27 percent share of market, Settecase said.
According to results of extensive consumer studies, an overwhelming 73 percent of shoppers say they would shop for appliances at Sears — 20 percent more than the next most popular retailer — and 35 percent would make their majaps purchases there, double the next largest retailer, she noted.
Asked why they shop for appliances at Sears, 78 percent of consumers surveyed cited its history of leadership, 73 percent cited their comfort level with the chain, 72 percent said it’s a company they can trust, and 69 percent said Sears’ appliances offer the latest features. On the latter point, Settecase noted that some 40 percent of all Sears’ laundry sales are in high-efficiency products, and that its innovative Trio French door refrigerator, produced by Maytag, was the largest product launch in Sears’ appliance history, with sales of $115 million last year.
Other factors influencing consumer decisions to shop Sears’ appliance departments include repair services (cited by 69 percent of respondents), which are supported by 10,000 in-house repair technicians; access to the latest styles (64 percent); recommendations from family and friends (69 percent); knowledgeable sales people (62 percent); credit financing options (62 percent), including Sears’ 12-month interest-free offer; wide selection of brands (59 percent); and good value (58 percent).
Settecase noted that Sears’ portfolio of six appliance brands “satisfies 92 percent of customer needs.”
Asked what factors influenced their choice of retailer in making their appliance purchases, 67 percent said “best price,” 49 percent said “stands behind their products,” 36 percent said “larger selection,” another 36 percent said “positive experience,” 24 percent said “matched competitor’s price,” 25 percent said “knowledgeable salespeople,” and 11 percent cited availability of take-with product.
Settecase said Sears’ pricing approach is to offer fair pricing, but not the lowest. To address the importance of low prices to consumers, the company has become “more competitive on branded goods,” while maintaining its value proposition for Kenmore, whose mantra internally is “more for same, same for less.”
Sears also improved its price match program to include comparable items in addition to exact models, since the use of derivatives essentially makes lowest-price guarantees “an empty promise,” Settecase said. What’s more, the company shops the market every six weeks to gauge competitors’ pricing and to support its price match program.
To further advance the Sears appliance cause, Settecase has stepped up marketing efforts to communicate the company’s broad brand portfolio, as 25 percent of consumers believe that Kenmore is its sole majap offering. Sears has also found a high-profile platform through its sponsorship of the popular ABC-TV series “Extreme Makeover: Home Edition,” in which its trucks and appliances are prominently displayed.
Sears is also remodeling and expanding its appliance departments at the rate of 180 stores per year between 2003 and 2005. Settecase also reminded the AHAM crowd that beyond its 871 full-line stores, it also sells or will sell majaps through 790 locally owned dealer stores, 45 outlet stores (soon to be 75), 18 Great Indoors stores and 245 Sears Hardware stores.
In addition, Sears recently opened its first two Sears Grand full-line, off-mall store prototypes, and plans to add additional units in Las Vegas, California and elsewhere in the near future. Some 200 to 300 potential Sears Grand locations have been identified, Settecase said.
Sears is also working to enhance its appliance shopping experience and improve its conversion rate, which already stands at 66 percent. To that end, the company is sending five majap-laden trucks out on the road this month and next that will provide two-day training sessions on products and consultative services for many of its 13,000 white-goods sales associates. Sears has also initiated an ACES program that follows up each sale with a phone call, and will conduct 25 to 50 consumer surveys on each sales associate every year.
Sears will also continue to introduce innovative products that, at least initially, will be exclusive to Sears, including a counter-depth Kenmore Elite refrigerator. Due out next month, it features a through-the-door water and ice dispenser and a PUR filter system, provided by Procter & Gamble, that produces water “as good as bottled water,” Settecase said.