Sears: Leading Retailer, Brand or Both?

A recent article about Sears in the WSJ ("Sears Scrambles Online for a Lifeline") got me thinking about all their recent initiatives in the online channel like opening of Sears.com to other merchants and building community with Mysears.com and Facebook. But perhaps it’s also time to better leverage the brand as many analysts have suggested. The name Sears still invokes a lot of historical branding good-will with consumers. I know it does with me as I’m a pretty big Craftsman tool and Kenmore appliance customer. When I mentioned I was doing a blog on Sears, the first thing a (younger) co-worker said to me was "it’s an old person’s brand." So I decided to start right there: Does Sears audience skew to an older demographic and therefore make the re-branding of Sears in the online space more difficult?

As the chart above shows, 22% of Sears’ customers are over 55 years old. This is within one point of the Internet average, Home Depot and Lowes, so clearly age is not a major difference.

Still, I wanted to understand a little more to see if the 7th largest online retail site (according Internet Retailer Magazine) has more strength in its core assets, which could translate to a positive differentiator from its rivals. I looked specifically at one traditionally successful piece of their business: the Appliance category.

Looking at the appliance category level of traffic on the site begins to paint the picture that Sears has a very strong "2-2" punch. Of the top appliance retailers, they have the 2nd highest domain level site traffic combined with the 2nd highest appliance category penetration. 9% of all shoppers at Sears.com translates to 8.4M shoppers of high dollar value items in November and December of 2009. Lowes.com and HomeDepot.com also make a strong showing with category penetration on their sites, but with fewer overall visitors, their onsite success does not translate to market leadership.

In the end, to little surprise, Sears is number one in the space with 45% of the online appliance shoppers mind share across the big four sites in the category.

But is there more to Sears in the appliance market? Looking at what shoppers are searching for on Sears.com highlights their unique brand position in the category.  3 of the top 30 on-site search terms on Sears, Home Depot and Lowes are for appliances, but on Sears those searches are all branded (i.e. Kenmore washer as opposed to just washer). That speaks volumes as to the mind set of consumers shopping for appliances and the power of the Sears house brand.

It’s obvious that Sears still retains a solid lead on the appliance space today, but I wonder how much time they have left to leverage the powerful assets such as the Kenmore appliances and Craftsman tools before retail rivals take more market share and/or the brands lose their shine. Perhaps it’s time to reverse the model and allow other retailers to sell the successful Sears brands. Forget selling at just Kmart, how many more Kenmore washers could Sears sell through a Best Buy?