Retail Observer

RETAILOBSERVER.COM DECEMBER 2017 48 B reaking up isn't so hard after all… the world's largest appliance manufacturer, Whirlpool, has hedged its bet by pulling its brands from Sears while exercising a price increase to others. Regardless of what you have read in the press, this announcement is telling of both the state of Sears and the state of their relationship with manufacturers. This would have been unheard of 10 years ago. But, the sad truth is that Sears no longer carries the industry weight it once did. In fact, Sears is no longer the number-one outlet in an industry they have dominated for the better part of this century. The Sears decline has been predicted, documented and debated for years. This latest Whirlpool move simply intensifies the focus that retailers need to place on these abandoned consumers. Both big box stores and independents alike have gained share on the back of Sears' rapid decline. This share is not a flash in the pan. If independents are truly fulfilling the shopper's needs and beating our competition in consumer satisfaction, these new patrons have the opportunity to become customers for a lifetime. In this epic time of change, we need to, as Steve Jobs put it "get closer than ever to (our) customers…so close, in fact, that (we) tell them what they need well before they realize it themselves". This goes for customers and vendor partners of ours alike. Their needs, though different, are what we need to capitalize on. And this is how we differentiate our stores in an increasingly competitive marketplace. It is what makes independent retail the most profitable channel for manufacturers. It is something we must leverage. We need to be more strongly united against those that are trying to diminish our margins — ultimately putting us out of business — and more supportive of those that help us improve margins and drive profitability. As an example, with all the talk about Amazon in the consumer electronics space, they really only command a small amount of market share. In televisions, Amazon has a share less than 6% , but I would suggest they represent more than 100% of the margin degradation. We are at a critical juncture in the history of this industry and retail in general. For the past several years, we have seen ever-increasing discounts from national retailers. Sears has been a large factor in this transition. The promotional periods, supported by manufactures, continue to extend in duration. Although the acquisition costs drop during these promos, the margin opportunity evaporates due to aggressive price posturing in the market. Independents cannot survive if all we do is take orders. We need to sell our value to consumers. We need to continue to establish our niche in the market. It is not an easy battle. Our competitors are going the opposite direction every day. Price is the only differentiating factor in their eyes. This business, which is high touch today, if not managed correctly, could become a transactional rela- tionship which leads to a vacuum of profits and consumer satisfaction. Patrick Maloney, Senior VP Appliances Nationwide Marketing Group Patrick Maloney Appliance Trends RO BREAKING UP ISN'T SO HARD AFTER ALL…

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