Sign of surrender? Sears agrees to sell Kenmore brand on Amazon.com

The news underscores how much Amazon, which dominates e-commerce, has left seemingly invincible traditional retailers in the dust.

Ángel González

 

In what appears to be a major sign of surrender to the reigning champion of e-commerce, ailing Sears, the one-time king of retail, just agreed to sell Kenmore appliances on Amazon.com.

The news underscores the extent to which Amazon, which dominates e-commerce, has left seemingly invincible traditional retailers in the dust.

Sears, founded in the late 19th century as a mail-order catalog, was the Amazon of its day. It provided a huge array of products to remote farming communities and later huge department stores to the rising middle class.

First challenged by Wal-Mart and later by the emergence of online shopping, the retailer has retreated into a shadow of its former self, with Kenmore, its private-label line of appliances, remaining one of its few strongholds.

“I’m shocked. I’m shocked,” said Cooper Smith, director of research at L2, a digital brand consultancy. “Sears is largely conceding defeat to Amazon by distributing their appliances” on the site.

In a news release, Sears said that the deal creates the broadest distribution of Kenmore products outside of its physical and online stores.

Sears, Kenmore and Innovel Solutions, a logistics company associated with Sears, will provide “white-glove” delivery and installation of appliances, as well as extended-product protection.

In an email, Howard Riefs, Sears’ director of corporate communications, rejected the characterization of the deal as an abdication. He portrayed it instead as a win-win agreement for both parties.

Selling on Amazon’s platform will help expand sales of the Kenmore brand and Sears Home Services, an appliance repair and home-maintenance provider, as well as Innovel Solutions, the logistics venture. “So this is a mutually beneficial agreement that will facilitate and encourage growth across Sears’ various businesses and assets,” Riefs wrote.

Besides the humiliation of a former rival, Amazon scores two other concrete victories with the agreement.

The deal establishes that Kenmore appliances can be controlled via Alexa, Amazon’s voice-activated digital assistant. That enhances Alexa’s dominance of the home-automation space, giving it an edge over competitors from Google, Apple and Microsoft.

The other victory is that Amazon gets an important brand to give it a stronger position in a sector where it’s had difficulty competing: the appliances market. Smith said that not a lot of people buy refrigerators or washing machines on Amazon — but he also doesn’t expect that to change much with the Sears deal.

The move also seems to sanctify Amazon’s role as the dominant interface between brands and users. Even powerful brands such as Nike, which had for years resisted selling their products on the Seattle giant’s website, have caved in.

Sears shares jumped on news of the deal, the terms of which were not disclosed. They closed at $9.60, up 10.6 percent, on Thursday.

 

Originally published July 20, 2017

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