As Sears seeks to shed assets, Home Services could be a hidden gem

As Sears seeks to shed assets, Home Services could be a hidden gem

Sears Home Services got its start in the 1950s, as more homes were being furnished with life-changing appliances such as refrigerators, vacuums and televisions. Now, more than half a century later, the business is still a valuable piece of Sears Holdings and could gain more clout in an era of homes rigged with smart devices.

As was the case decades ago, consumers still need washing machines repaired and carpets cleaned, and they find comfort in turning to specialists when installing new gadgets. Sears Home Services, which offers maids and handymen, is looking to become the “smart home expert” across the country.

The trend comes at an opportune time for the department store owner, which has been looking for ways to grow as its debts mushroom and sales decline. In search of profit, Sears is pouring resources into its home platform, staffing up and potentially readying the division to be acquired.

More retailers today are adding service components to their businesses — if one can imagine something customers will always have a need for, these services can be largely profitable. (Nordstrom and Saks’ owner Hudson’s Bay have nail salons in their stores, and J.C. Penney has hair stylists, for example.)

“We want to be a trusted advisor of smart devices in the home,” Mitch Bowling, the CEO of Sears Home Services, told CNBC. A former vice president of Comcast‘s Xfinity Home, one of the country’s first smart home services, Bowling just started working for the department store chain about three months ago.

“In the smart home space there is not one provider that has everything — it’s usually a collection of items from different providers (i.e., August Home, Ring and Google) and we want to be a trusted advisor of all that space,” he said. “That goes back to training technicians and getting everyone up to speed … that’s the vision for us.”

In an unlikely matchup, Sears has been getting a little help from Amazon along the way.

Sears’ Kenmore appliances and DieHard car batteries are now being sold on In working with the e-commerce behemoth, Sears has equipped a slew of its products with connected capabilities and voice navigation, via Amazon’s Alexa platform, thereby positioning itself in the smart home category.

CEO Eddie Lampert recently said Sears has been looking for ways to “unlock value” from several of its brands, including Sears Home Services and Sears Auto Services. However, Lampert cautioned at the time that doing so would require “a more stable environment and more cooperative partners.”

The company was successful in selling its iconic tool division, Craftsman, to Stanley Black & Decker for $900 million early last year. A partnership with Amazon has helped Kenmore and DieHard gain more exposure, but Sears said it’s still seeking “additional alternatives” for its holdings like Home Services.

“Home Services is a lucrative business and demand for the segment will only grow over the next 10 or so years as our houses become smarter and increasingly driven by technology,” said Neil Saunders of GlobalData Retail.

“As one of the largest suppliers of appliances, Sears arguably has an advantage here,” Saunders said. “Not only can it build smart technology into its products, but it is also in an ideal position to help monitor and service them when something goes wrong.”

Sears Home Services employs more than 4,000 technicians who make over 6 million service calls annually throughout the U.S., a spokesman told CNBC. And the company plans to hire “a significant number of new technicians” in the first quarter of 2018.

“We’re just getting started,” Tom Park, the president of Sears’ Kenmore, Craftsman and DieHard brands, told CNBC about the Amazon partnership in particular. “Amazon was very cautious to make sure our experience for their customers was top notch … and so we rolled out a couple markets at a time, exceeding customer service metrics, and got that component down.”

“2018 is the year of rolling this out” and marketing Sears’ brands to Amazon’s more millennial customers, Park added. The company is also looking for the “next big thing” in tech, he said. “What is the next Alexa integration that makes sense in the home?”

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