March 28, 2008
Kenmore and Kmart (Possibly) Perfect Together
Sears Holdings has been threatening since it took over Sears and Kmart that it would take the best exclusive brands of each format and sell them in the other.
Over that time, the parent company has slowly (some might say glacially) begun to introduce Kenmore appliances to Kmart stores. At the end of Sears’ fiscal year 2005, 100 Kmart stores stocked Kenmore items. That number grew to 280 by the end of 2007.
Now the company has announced that it “will continue to explore opportunities to profitably cross-merchandise products and services” between Sears and Kmart.
The relative strength of the Kenmore business (Sears holds a 15 percent share of U.S. appliance sales), has given Sears Holdings confidence that the brand will perform well as it is rolled out to an even greater number of Kmart locations.
Sears’ confidence in its appliance brand is further demonstrated by the company’s plan to open more dealer stores over the next year. The company opened 40 new dealer stores in 2007 and currently has 857 operating in urban and rural locations around the country.
Discussion Questions: Has Sears Holdings been either too cautious or hasty in introducing Kenmore appliances into Kmart stores? What will putting Kenmore into more Kmart stores do for the appliance brand and Kmart’s reputation and sales?
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Kenmore is a brand in itself and I’m not sure putting it in Kmart is the best direction for Sears. Yes, sales will increase but what will it do to the Kenmore name? I consider Kenmore a premium appliance brand even though they sell lower tier within the product family.
Will the average Kmart shopper understand the presence of Kenmore in the store? If Sears needs cash (which they probably do), then this is a good way to expand sales but they need to consider the long term effect it will have on the name. Will they be able to compete with JennAir and Kitchen Aid in the future if Kenmore becomes a Kmart brand?
Just one guy’s opinion: the Kenmore brand stood for quality, at least when I was a kid. Its star has faded, but in my heart of hearts I still have some faith in it. Putting it further into Kmart erodes the image more. I don’t think of quality appliances when I think of Kmart; I think of cheapo, mid-to-poor quality. Not scientific, but I suspect these feelings are fairly widespread.
First of all, Kmart is a poor man’s Sears and Sears is a poor man’s JCPenney.
I don’t see the advantage to putting Kmart products in a Sears store–unless Sears opens a $1 section in its stores.
Appliances are a tough business these days and the Kenmore brand simply doesn’t have the brand loyalty it once did, primarily because most of their loyal customers are dying off and the next generation knows they can get as good or a better deal at Lowe’s or other discounters.
Furthermore, Sears can open all the Dealer stores they want, but they don’t have the level of service and quality that will attract more shoppers. And if they keep opening dealer stores, maybe they’ll take appliances out of the main Sears stores–yet another business this once great chain has eliminated.
Has any one here actually seen a Kenmore appliance department within a Kmart, shopped it or purchased an appliance there?
If you had, you’d see that it is a hassle free environment, with knowledgeable staff assistance available. All of my nearby Kmarts have an appliance department.
I really like the convenience to shop and compare appliances there. These departments not only carry Kenmore but all national brand appliances. It sure beats going to Home Depot and bumping through their cluttered displays and trying to find someone to take your order.
Actually your survey needed a “none of the above” button. There are a lot of factors that have varying degrees of influence on this situation.
For one thing, as others have pointed out, the names Kenmore and Craftsman may no longer be the symbols of quality that everyone automatically assumed they were 10-20 years ago. The lower end Kenmore appliances aren’t made by the same one or two manufacturers that they were then and indeed the quality levels seemed to have dropped in the low to mid ranges.
Likewise the tools. Craftsman basic hand tools still seem to be of pretty high quality but again, the power tools are being manufactured by companies other than they were in the old days, plus the Craftsman name has been diluted by all those cheap jack “gimmick” tools that old Bob Vila used to introduce on almost a monthly basis that were actually something that Ron Popiel would have been hawking had he not been so busy selling Pocket Fisherman and spray paint for the back of your head.
Customers experience mass confusion about the supposed lifetime warranty on “all” Craftsman tools. It only applies to the hand tools themselves but because of the way the guarantee is often described in ads and commercials, a lot of people think if it says Craftsman on it, it’s guaranteed for life. That was directly implied in most of the commercials Mr. Vila made for them who always intoned at the end of an ad; “Because it’s a Craftsman tool (not HAND tool) It’s guaranteed for life.”
Not sure whether they walked that thin line on purpose or not but it’s come back to bite them many times since. Putting Sears brands in Kmart just adds to the dilution of those brands and without Martha Stewart, what goes back the other way?
You can be sure that Sears and Kmart have point of sale data that’s been analyzed to a fare-thee-well, determining the impact of the Kenmore rollout. It’s not just a determination of how much cannibalization (will Kmart sales of appliances hurt Sears stores?), but it’s a comparison of the margin dollar loss of the merchandise Kmart would have to displace.
Can anyone say “deck chairs on the Titanic”?
Amen Warren. There’s no faster way to kill a brand than to put it in Kmart.
Instead of putting Kenmore appliances in Kmart and further cheapening the brand, they should close the Kmart stores and fix Sears. Kmart can’t compete on either quality or price and it’s painfully slow death is draining off resources that could be used to attempt to fix Sears. To do either successfully though requires a vision and a strategy that seems to be lacking.
That glacier should quit moving altogether!
Kenmore represents a great brand in many categories and is often cited by Consumers Reports as a “great value.” I am doubtful about the strategy to introduce Kenmore appliances in Kmart stores unless there are some knowledgeable sales associates who can answer customer questions and “make the sale.” I have seldom found that to be the case at a Kmart.
Introducing a brand worthy of memory and quality may kill it as mentioned; I’m in full agreement with Warren on this one.
The answer may not be the brands sold at either Kmart or Sears but these two ‘brands’ themselves. It may be time to dissolve both into a completely new banner, decide what that will be and then introduce brands as appropriate. There are all kinds of openings in the shopping experience to fill. These two combined have a great opportunity, under a new name and a new approach. The have in-mall and stand-alone to work with to fill all kinds of openings in consumer need.
Falling short of doing something completely new, they will simply continue the fall. I am not sure, however, that either has both the merchandising and marketing skill to pull it off.
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Kenmore is a brand in itself and I’m not sure putting it in Kmart is the best direction for Sears. Yes, sales will increase but what will it do to the Kenmore name? I consider Kenmore a premium appliance brand even though they sell lower tier within the product family.
Will the average Kmart shopper understand the presence of Kenmore in the store? If Sears needs cash (which they probably do), then this is a good way to expand sales but they need to consider the long term effect it will have on the name. Will they be able to compete with JennAir and Kitchen Aid in the future if Kenmore becomes a Kmart brand?
Just one guy’s opinion: the Kenmore brand stood for quality, at least when I was a kid. Its star has faded, but in my heart of hearts I still have some faith in it. Putting it further into Kmart erodes the image more. I don’t think of quality appliances when I think of Kmart; I think of cheapo, mid-to-poor quality. Not scientific, but I suspect these feelings are fairly widespread.
First of all, Kmart is a poor man’s Sears and Sears is a poor man’s JCPenney.
I don’t see the advantage to putting Kmart products in a Sears store–unless Sears opens a $1 section in its stores.
Appliances are a tough business these days and the Kenmore brand simply doesn’t have the brand loyalty it once did, primarily because most of their loyal customers are dying off and the next generation knows they can get as good or a better deal at Lowe’s or other discounters.
Furthermore, Sears can open all the Dealer stores they want, but they don’t have the level of service and quality that will attract more shoppers. And if they keep opening dealer stores, maybe they’ll take appliances out of the main Sears stores–yet another business this once great chain has eliminated.
Has any one here actually seen a Kenmore appliance department within a Kmart, shopped it or purchased an appliance there?
If you had, you’d see that it is a hassle free environment, with knowledgeable staff assistance available. All of my nearby Kmarts have an appliance department.
I really like the convenience to shop and compare appliances there. These departments not only carry Kenmore but all national brand appliances. It sure beats going to Home Depot and bumping through their cluttered displays and trying to find someone to take your order.
Actually your survey needed a “none of the above” button. There are a lot of factors that have varying degrees of influence on this situation.
For one thing, as others have pointed out, the names Kenmore and Craftsman may no longer be the symbols of quality that everyone automatically assumed they were 10-20 years ago. The lower end Kenmore appliances aren’t made by the same one or two manufacturers that they were then and indeed the quality levels seemed to have dropped in the low to mid ranges.
Likewise the tools. Craftsman basic hand tools still seem to be of pretty high quality but again, the power tools are being manufactured by companies other than they were in the old days, plus the Craftsman name has been diluted by all those cheap jack “gimmick” tools that old Bob Vila used to introduce on almost a monthly basis that were actually something that Ron Popiel would have been hawking had he not been so busy selling Pocket Fisherman and spray paint for the back of your head.
Customers experience mass confusion about the supposed lifetime warranty on “all” Craftsman tools. It only applies to the hand tools themselves but because of the way the guarantee is often described in ads and commercials, a lot of people think if it says Craftsman on it, it’s guaranteed for life. That was directly implied in most of the commercials Mr. Vila made for them who always intoned at the end of an ad; “Because it’s a Craftsman tool (not HAND tool) It’s guaranteed for life.”
Not sure whether they walked that thin line on purpose or not but it’s come back to bite them many times since. Putting Sears brands in Kmart just adds to the dilution of those brands and without Martha Stewart, what goes back the other way?
You can be sure that Sears and Kmart have point of sale data that’s been analyzed to a fare-thee-well, determining the impact of the Kenmore rollout. It’s not just a determination of how much cannibalization (will Kmart sales of appliances hurt Sears stores?), but it’s a comparison of the margin dollar loss of the merchandise Kmart would have to displace.
Can anyone say “deck chairs on the Titanic”?
Amen Warren. There’s no faster way to kill a brand than to put it in Kmart.
Instead of putting Kenmore appliances in Kmart and further cheapening the brand, they should close the Kmart stores and fix Sears. Kmart can’t compete on either quality or price and it’s painfully slow death is draining off resources that could be used to attempt to fix Sears. To do either successfully though requires a vision and a strategy that seems to be lacking.
That glacier should quit moving altogether!
Kenmore represents a great brand in many categories and is often cited by Consumers Reports as a “great value.” I am doubtful about the strategy to introduce Kenmore appliances in Kmart stores unless there are some knowledgeable sales associates who can answer customer questions and “make the sale.” I have seldom found that to be the case at a Kmart.
Introducing a brand worthy of memory and quality may kill it as mentioned; I’m in full agreement with Warren on this one.
The answer may not be the brands sold at either Kmart or Sears but these two ‘brands’ themselves. It may be time to dissolve both into a completely new banner, decide what that will be and then introduce brands as appropriate. There are all kinds of openings in the shopping experience to fill. These two combined have a great opportunity, under a new name and a new approach. The have in-mall and stand-alone to work with to fill all kinds of openings in consumer need.
Falling short of doing something completely new, they will simply continue the fall. I am not sure, however, that either has both the merchandising and marketing skill to pull it off.