Sears Moves Appliances Online In Effort to Outsell JCPenney

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Sears, Roebuck and Co. plans to offer the widest inventory of household appliances on the Web as it vies for domination of the online home products market, but the nation's No. 2 retailer might have its work cut out as it tries to create an e-commerce presence to rival JCPenney Co. Inc.


Sears, Hoffman Estates, IL, plans to begin marketing a line of 2,000 major appliances in late spring through a Web destination linked to its main site at www.sears.com. More than 4.2 million appliance parts are scheduled to come online in March, and the company will provide delivery, installation and repair scheduling and credit services related to the merchandise.


"Sears is a market leader in the appliance category and in the home category, so we see ourselves in a position of authority on this. Customers already associate Sears with appliances," said spokeswoman Paula Davis, noting that Sears has the further advantage of a ready-made national distribution system.


Still, the breadth of the company's e-commerce capability lags behind JCPenney's www.jcpenney.com site, which offers more categories of merchandise electronically, said Evie Black Dykema, analyst for online retail strategies at Forrester Research.


"It's a step in the right direction, but still Sears will have to go much further to develop a strong e-commerce presence comparable to that of JCPenney," Dykema said.


Though JCPenney, Plano, TX, does not sell large appliances through its site, the company has sold smaller products like microwaves, vacuum cleaners and coffee makers since August 1996. The nation's No. 4 retailer also sells apparel, electronics, sporting goods, toys, jewelry and special clearance items.


E-commerce likely will factor heavily into the future of the two retail war horses. Sears and JCPenney have suffered with the declining popularity of shopping malls, and annual earnings per share have slipped for both companies sequentially since 1995. E-commerce might supplant the companies' catalog channels over coming years as well, Dykema said. Sears' main catalog met its end in January 1993, though the firm continues to publish 17 specialty catalogs.


Revenue from traditional stores and catalogs still dwarf Web sales at Sears and JCPenney, but more and more of the companies' customers are going online, including a growing number of women. And as the swelling ranks of electronic patrons demand greater convenience, both firms seem determined to provide it.


"We have to answer that call," Davis said.


The planned appliance site will not be Sears' first venture into e-commerce. During the holiday season, the company offered more than 2,300 toys and gifts online at www.wishbook.com, and it sells its private line of 3,500 Craftsman tools at www.sears.com/craftsman.


"The online potential for Sears and JCPenney, in terms of its significance, is a few years in the future," said Dykema. "But the fact is that they need to get involved now, because they need to develop that experience online, and they need to integrate both their technical back end and their marketing effort."


Retailers selling through the Net often dispense with inventory warehouses altogether, coordinating distribution with many manufacturers so products go directly from the factory to the end customer. Fulfillment network ASD Systems Inc., Garland, TX, uses such a system in distributing Craftsman and wishbook merchandise, but currently is not slated to handle appliance orders for Sears.


Dykema added that appliances lend themselves well to Web sales and help drive traffic into brick-and-mortar locations. Many consumers often like to comparison shop online before putting down their cash in a traditional store, and the electronic medium is good for quickly and conveniently listing performance specs on machines like dish washers and ovens.


Sears' internal research found that customers who investigated Craftsman products in advance through the Web spent 27 percent more on the tools at traditional stores than consumers who had not browsed online. Typical of many retailers, the company found its customers felt more comfort buying online in 1998 than they had in 1997.


Sears will sell its full assortment of cooking, laundry and refrigeration products through its appliance site, including top brands Maytag, Whirlpool, General Electric, Frigidaire, Amana and Kenmore.
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