Sears’ plan to sell its Kenmore home appliances may come with both benefits and challenges to Amazon and sear. Over the last several years, Sears has been a persistent decline in revenue. Sears has been struggling in the last few years and has closed over 200 physical stores. The plan to sell on Amazon is an effective way to tap the online market and sell more of Kenmore home appliances at Amazon with the broader trend of companies looking to sell more online (Reuters, 2017). The deal will benefit Sears since it will expand the distribution reach for the Kenmore products at the time when the company is struggling with its declining sales following the stiff competition from Amazon and Walmart Inc. Sears is trying to enhance its reach like other iconic brands on Amazon, which offers the broadest distribution and adds values on company assets (Reuters, 2017). For instance, the brand will increase value through its link with Amazon Axela digital assistant. Therefore, Sears will be able to reach a broader market and sell its appliances outside its physical stores as well as their websites.
However, selling Kenmore appliances on Amazon will not be enough to save sear from declining sales (CNBC, 2017). Sears deal with Amazon may even impact more of its in-store sales and hit margins. This is because the deal will put sear in a market place that is highly competitive as well as where the fulfillment costs are high, which might be challenging for the company’s margins. Amazon and Sears are bound to face some challenges while selling home appliances online. For instance, Sears has to deal with scheduling, installations, and customers demanding their old appliances to be sold away (CNBC, 2017). Considerably, these are complicated transactions to be completed online, which is the reason why most home appliances are sold on physical stores. Therefore, it may be challenging for Sears to continue to build the customer relationship as well as experiences through the quality of services they offer.
