Sears has been failing. It is a well known fact. CDA News has reported on the company announcing the closure of multiple stores, including K-Mart locations. But something may have just happened that could keep the Sears brand alive and kicking for years and years to come. That something is Amazon’s Alexa.
On Thursday, the department store chain revealed a new plan to bring their Kenmore-brand of appliances to Amazon’s website. This includes the Kenmore Smart brand, which will have Amazon’s Alexa inside. Following the news, shares were up 19 percent, even reaching 25 percent up at one point, which was good news for the struggling company.
Eddie Lampert, CEO of Sears said that selling Kenmore products through Amazon will expand the availability of the brand in the United States. Their Innovel Solutions Unit and Sears Home Service will benefit from the expansion of customers through Amazon, according to CNBC.
The Alexa enabled Kenmore Smart appliances will allow customers to change room temperatures, preheat an oven, and many other options, just with their voice, from another room in the house, or even outside the home.
Part of the reason for Sears’ downfall was the introduction of Best Buy, Costco, and other major retailers. It was getting hard for Sears to compete, and when long-time competitor J.C. Penney looked to take a larger slice of the market, it was a big blow to Sears. Sales began to slump and debts grew. But it looks like Amazon could be their savior.
Following the Sears/Amazon announcement, shares fell more than 3 percent for Whirlpool, Lowe’s, and Home Depot, three of the competitors that had been beating Sears down for so long.
However, this could also end up being a deathblow for the Sears retail locations. Being able to purchase through Amazon instead of visiting a retail location, may cause a major drop to existing traffic.
While Sears has been forced to close many locations, they have recently opened a new store, unique for their company. Last month the retailer opened a new location that only sells appliances and mattresses. These two categories are the strongest for the company, and they plan on opening more freestanding locations that are dedicated just to these tow categories.
Sears is fighting hard to avoid filing for bankruptcy. Between the agreement with Amazon, the stand alone specific category stores, and receiving a new line of credit in the amount of $200 million shows the company does not want to just fade away into nothingness. Unlike other major retailers that failed, Sears is doing, what appears to be, the right thing. They understand the big box stores are not profitable and are rolling with the punches. This may be easier for Sears than other retailers, because as recently as the 1980s, the company not only ran big box stores, but catalog stores. These catalog stores were just hole in the wall locations, quite a few remote places like Alaska, which allowed for direct shipping of products from the company’s catalog to the location to be picked up by customers. So working on a smaller scale is something the brand is use to.
What do you think about Sears joining forces with Amazon? What do you think about the smaller specific appliance and mattress only stores? Do you think the former retail giant can avoid bankruptcy? Share you thoughts in the comments below.
By Cletus Dillwood
Photo Courtesy Sears Holdings