Sears Holdings is putting the pedal to the metal in its repurposing of its iconic house brand trilogy — Kenmore, Craftsman and DieHard, or simply KCD — for a new connected-product age.
Following a first wave of smart private-label products last year that included Craftsman rider mowers and DieHard Bluetooth speakers — and the pending sale of the Craftsman brand to Stanley Black & Decker notwithstanding — the retailer is doubling down on the strategy under Tom Park, a former Belkin/Linksys VP and present president of KCD.
As household staples, Park explained, the brands provide a key component that’s been missing from the nascent connected-home market: trust and reliability, as reflected in Kenmore’s 100-year heritage, Craftsman’s reputation for durability, and DieHard’s 50 years of cold-weather starts.
Together they evoke peace of mind, Park said, and when wedded to Sears’ expansive home-services network, offer the retailer a unique opportunity to become a leader in connected home.
This year Sears hopes to extend its foothold by reducing the price premium for smart products; keeping the connections simple by focusing on Wi-Fi and Bluetooth; and limiting smart features to scenarios that make sense.
“Where’s there’s a need, it will be connected; where there isn’t one, it won’t,” Park told TWICE.
Going forward, the majority of new KCD-branded products will have smart capabilities, and all will have connectivity by 2018, he said.
To help distinguish them, Sears is adding a new Smart label to packaging and marketing collateral for its Kenmore and step-up Kenmore Elite lines. Among the latest crop: three refrigerators, six new laundry pairs and five additional AC models, as well as assorted ovens and dishwashers.
How smart are they? The new counter-depth, 24-cubic-foot Kenmore Elite French door fridge, for example ($3,600, hitting sales floors this month), features 122 sensors that allow owners to change settings remotely, and can send notifications if the door is ajar, the filter needs replacing or if there’s a potential problem with the unit, allowing Sears customer service to nip it in the bud.
Within Craftsman, Sears has introduced smart Pro Series tool storage units that can be locked and unlocked via smartphone, and this year will embue all its lawn tractors with Bluetooth, so users can be alerted when it’s time for preventative maintenance, like an oil or filter change, that can prevent costly repairs down the road.
Park also hinted at big plans for Alphie, a $50 voice-controlled Sears digital assistant that thus far has been limited to a personnel shopper role.
We should also expect continued shelf life for Kenmore-branded TVs, introduced last summer and in short supply during the recent holiday selling season.
One subject where Park remains mum: Sears’ ongoing efforts to further monetize the brand family through partnerships, outside distribution or an outright sale. Last spring it retained two investment banks — Citigroup Global Markets and LionTree Advisors — to help explore options, and last fall was reportedly entertaining offers from Craftsman from a number of potential bidders.
The effort led to the pending purchase of the Craftsman brand by Stanley Black & Decker in a sale and licensing deal valued at $900 million. Under the agreement, announced this month, Sears will continue to source and sell Craftsman-branded products indefinitely; will receive a percentage of Stanley’s Craftsman sales for 15 years; and will begin paying Stanley an annual 3 percent royalty fee starting in year 16.
As chairman/CEO Eddie Lampert noted, “We have a process underway to create value by positioning our Kenmore, Craftsman and DieHard businesses as well as our Sears Home Services business to benefit from broader distribution and partnerships that will allow them to grow beyond Sears Holdings.”
How that continues to play out, and dovetails with Park’s private-label smart moves, will be one of the more interesting retail stories of 2017.