Sears Strategy Still Missing the Mark

Sears is trying to sell more appliances by adding them to their hardware stores.

Apparel sales remain sluggish and the credit-card unit was sold, so Sears, Roebuck & Co. is moving to shore up its most successful business: home appliances.

The Hoffman Estates, Ill.-based retailer is adding home appliances to its free-standing Sears Hardware stores, which are being renamed Sears Appliance and Hardware. Appliances were placed in 35 of its hardware stores and should be in most of the remaining 103 by year's end, the company said Thursday.

Sears has long been the No. 1 retailer of appliances, boasting almost triple the market share of its next closest competitor. But its share has declined slightly the past two years, while those of Lowe's Cos. and Home Depot Inc. are creeping up with aggressive marketing. Both big-box competitors are adding stores rapidly.

I'm interested in Sears because 20 years ago the company was the prime retailer in America, and everyone thought Sears was "too big" and would "takeover," the way they talk about WalMart now. But Sears is a company struggling for an identity. After trying to be all things to all people (a strategy sure to fail), they sold most of their businesses, including the lucrative credit card business that contributed the most profit to the company. Sears did this to focus on retailing, but as I have pointed out before, they have no way to differentiate themselves as a retailer. They aren't upscale, they aren't stylish like Target, and they can't compete on price. So what is left? They tried brining in more trendy apparel, buying Lands End and all that, but it only made a blip in sales. Now they want to make themselves and appliance retailer? Good luck. It's a tough niche where Sears' market share has been eroding for years. My guess – Sears will be bought by someone else within five years.