Almost three years after the struggling department store chain revealed it would stop selling consumer electronics, Sears has announced that it will start offering the product category again in one-third of its stores.
At the time Sears called it quits, the category was producing low margins and the store had shifted from traditional assortments to a connected-home approach. Now, president of hardlines for Sears Holdings Dean Schwartz believes it's time for the company to re-enter tech and try again to make a profit, as the initial pullback led to sales declines.
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So why electronics, and why now? According to Kathleen Egan, VP, Wiser, for a retailer to abandon a category and then bring it back, there is clearly something enticing about consumer electronics. And while she says the category may not bring in a ton of profit margins, it will increase badly needed foot traffic.
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"I see this as a correction," she told FierceRetail. "Pulling out of consumer electronics clearly did not alleviate the issues they had around the category and, ultimately, the benefits may have outweighed the downsides, in hindsight. Consumer electronics has changed significantly since Sears was a leader in the space, so an updated pricing and promotional strategy will be required to gain substantial market share in the category."
In order to do it right this time, Egan says that Sears needs to find a way to stand out in the market through potentially one of two ways: product exclusives and bundling products that are often bought together to promote more unique offerings.