For a relatively staid category like white goods, there’s been plenty of volatility on TWICE’s Top 50 Major Appliances Report.
Indeed, it was only three years ago that the long-reigning prince of appliance retail, Sears, was dethroned from its No. 1 perch by Lowe’s.
Sears suffered a further indignity last year when The Home Depot leapfrogged to the No. 2 slot on the TWICE listings, pushing the Kingdom of Kenmore to third place.
This time, on TWICE’s most recent rankings, released in our June 5 issue, the triumvirate held fast and maintained its order. And while fourth-place Best Buy is quickly closing the gap (more about that below), Lowe’s, Home Depot and Sears together control nearly 58 percent of all sales on the Top 50 — which itself accounts for better than 90 percent of all U.S. majap sell-through.
What makes them so special? Well, first of all, sheer numbers. Taken together, the three top chains pepper the retailscape with nearly 4,400 stores between them, although that number will decrease as Sears continues closing doors.
Equally important, the consumer has voted with her pocketbook for the home-improvement format. Both Lowe’s and Home Depot operate standalone box stores that, like the strip-mall environment Best Buy prefers, provide easy entry and egress.
In contrast, many Sears stores are still located within traditional enclosed shopping malls, which adds time, distance and crowds between the parking lot and the appliance department.
But just because Lowe’s and Home Depot share the same retail distribution channel doesn’t mean their shopping experiences are necessarily similar. They’re not. Home Depot, with its large home-builder and contractor clientele, maintains more of bare-bones warehouse feel to its sales floors.
In contrast, Lowe’s presents a more polished appearance, particularly within the appliance section, where a larger in-store assortment and greater use of vignettes, sets it apart from its home-improvement competitor.
But what Home Depot loses in décor, it makes up in online savvy. With a fulfillment assist from GE Appliances, the company is at the forefront of online majap shopping, which along with automobiles is one of the last hardline bastions of brick-and-mortar.
And what of Sears? Sears lost its standing as top dog and second-place pup due in large measure to the 2012 spinoff of its Sears Hometown and Outlet specialty chain business, which still comes in at No. 5.
But the company’s well-publicized woes go well beyond that, and include minimal investment in its retail stores under chairman Eddie Lampert; an aging — and dying — customer base that’s not being replaced by millennials; and the aforementioned disfavor with indoor malls for destination shopping.
Instead, Sears is living off the mighty 40 percent-plus market share it once possessed in appliances, ceding further sales to its big-box and independent rivals with each passing year.
On last year’s Top 50, for example, Sears enjoyed a comfortable $1.3 billion buffer between it and No. 4 Best Buy. But that lead has since shrunk by less than half, with only $743 million now separating the two in appliance revenue.
Given the pace of Sears’ sales declines and store closures, don’t be surprised next year if/when Best Buy joins Lowe’s and Home Depot within the winners’ circle.