Looks like you can add Sears (NASDAQ:$SHLD) to the long list of retailers signing deals with e-commerce giant Amazon (NASDAQ:$AMZN).
The Chicago-based department store chain disclosed plans on Thursday to sell Kenmore-branded appliances on Amazon.com. Also, Sears announced that its Kenmore Smart appliances will join with Amazon’s Alexa platform.
Following the announcement of the deal, shares of Sears’ stock climbed more than 25% at one point in trading before the market’s open.
In a statement, CEO Eddie Lampert said: “The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the U.S.” He added, “At the same time, Sears Home Services and our Innovel Solutions unit will benefit from the relationship as more customers experience their quality services for Kenmore products purchased on Amazon.com.”
When asked about the integration with Amazon’s Alexa platform, Sears said a new “Kenmore Smart” skill for Amazon Alexa will allow customers to control their appliances. For instance, changing the temperature on the air conditioner without having to leave the comfort of your sofa.
With a partnership with Amazon, Sears is hoping to expand its reach and grow the Kenmore name. That said, this transition can be thought of as a double-edged sword as it also gives shoppers yet another reason to avoid heading to a Sears store.
According to Neil Saunders, GlobalData Retail Managing Director, “The move makes sense as it puts Sears’ brand products where customers are shopping and gives them a better chance of selling.” Saunders added, “That said, in the short term it may create even fewer reasons to visit Sears’ shops, which could put further pressure on that side of the business.”
“It also puts Sears into a marketplace which is very price competitive and where fulfillment costs are high; this is something that may be challenging for margins.”
It has been known for a while that Sears is trying to fight the negative headlines and pessimistic outlooks regarding the retailer’s ability to continue. However, if Sears is able to reach new customers online, the deal with Amazon could drive Sears’ profitability.
With this deal, whenever a user visits Amazon.com to search for, say a refrigerator, Sears’ Kenmore will pop up as a top brand.
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