OLD AMAZON MEETS NEW AMAZON AS SEARS INKS DEAL WITH ONLINE GIANT
Dan Sonners
Over 100 years before Jeff Bezos launched his book site named after the world’s largest river, there was Sears. A direct mail catalog where you could buy anything from watches (Sears’ original venture) to clothes and just about everything in between. Sears brought a wide range of products (at affordable prices), to areas of the country that had few retail options. Sears truly was Amazon before Amazon.
Now, 130 years after Sears launched their first watch catalog, the company is turning to a partnership with Jeff Bezos’ Amazon to regain relevance in a retail marketplace that seems to be claiming a new victim on a weekly basis.
The deal will allow Amazon to sell Sears’ Kenmore brand of home appliances on their site as well allowing Amazon to integrate their Alexa home assistant into Kenmore products.
The arrangement is seen as being mutually beneficial as it will help Sears reinvent itself (as well as expose it’s Kenmore brand to a younger generation of customers) while it allows Amazon to gain traction is another new marketplace, large appliances.
Retail experts either view it as a visionary move on Sears’ part or a concession that will expedite the death of brick and mortar stores. While I don’t know if the deal will be enough to save Sears (which has largely existed on debt financing the last few years), it could prove to be a model that allows brick and mortar stores to co-exist with Amazon in the future.
One of the biggest fool’s errands of the 21'st century has been the online versus offline attribution war, and only recently has retail started to desegregate the two silos. Instead of analyzing where customers make their purchases, we should be paying more attention to the journey of how they got there.
Clearly, there are some products which consumers largely prefer to research and buy online like books that started the Amazon revolution (although even physical bookstores are starting to make a comeback as store owners have started emphasizing the in-store experience that loyal book readers crave).
But how often have you gone into Best Buy to look at a high definition television and then gone home to compare prices online? What if you could look at that television and then find it ranked at the top of Amazon, at a competitive price, with complimentary reviews? That would create a second touch point which would dramatically increase the chance of you buying that television. That’s exactly what Sears is trying to do with Kenmore. They know that people go into their stores to look at large appliances (which most people prefer to see in person before buying) and then go home to compare pricing and reviews. Why not team up with the online retailer that owns SEO and be the first ranked product on their site? Combine that with Kenmore’s reputation (the brand has been around since 1927), and you’ve created an opportunity to sell a lot refrigerators to people that otherwise would have been lost revenue when they walked out of the store.
That’s the myth of retail’s decline. It’s not that people only want to shop online, it’s that Amazon has successfully inserted itself into a critical point of the customer’s journey (low prices and Amazon Prime have only increased their ability to do this). The fact is there are many product categories where the customer journey includes a trip into a physical store. Competitors like Walmart have figured this out as well (If you haven’t noticed, every Walmart television commercial is now branded with Walmart.com).
Where this ends is anyone’s guess. Given how overloaded with debt Sears is, it’s easy to envision a scenario where this is a test run for Amazon buying Sears outright. But other retailers should take notice, either by investing heavily in a personalized omni-channel strategy or leaning into Amazon’s dominance by partnering with the site.
The lessons from the Sears / Amazon experiment should extend well beyond retail though. 80% of Americans now have a super computer (smart phone) in their pocket. “Channel surfing” is more fluid than ever. Any business / organization can benefit not just by looking at which channels customers are using to convert, but by asking how they got there.
Dan Sonners is Director of Non Profit Marketing at Conrad Direct. The viewpoints expressed here are personal opinions. Dan be can emailed with questions or feedback at dsonners@conraddirect.com
