Sears Canada brings sophistication home
Sophistication is a byword for the home furnishings and housewares businesses of Sears Canada. Because it straddles the line between mid-tier operator and department store in its Canadian stores, the company has always had to promote a more upscale image through its merchandising, as compared to Sears stores in the United States, but it has done so while integrating mass-market operations and brands.
While Sears Canada’s downtown city stores are essentially department stores, its suburban stores tend to be more casual in style and appearance. As a result, the company has become adept at merchandising to various environments and consumer groups, making substantial adaptations that suit the circumstances wherever its stores are located.
Among the other things it has done, Sears Canada proved that the Martha Stewart brand could thrive in a more upscale environment than that of discount stores. Three years ago, it took over Canadian distribution of the Martha Stewart Everyday brand from Zellers.
It wasn’t an easy task for Sears Canada to transition the brand from the discount store environment, especially since the changeover occurred while the brand’s namesake was going through her not-sot-distant-past legal difficulties. But Sears forged through, developing lavish displays that captured the quality and value of the line and was able to successfully position and sell the brand. Indeed, it expanded on the brand as it was offered in Canada, adding MSE curtains and merchandising them prominently in the midst of the brand assortment.
The home operation in Canada differs in some critical ways from what U.S. consumers see under the Sears banner. Furniture is the most obvious difference between the two manifestations. Compared to the United States, Sears Canada’s furniture operation is vast, and includes living room, dining room and bedroom furniture with price tags reaching thousands of dollars. And Sears Canada provides financing including installment and deferred billing programs.
Sears Canada uses a variety of tactics in its furniture merchandising and marketing, including elements from the modern mass-market playbook. For the Winter Olympics, Sears Canada rolled out a Roots furniture range as an element of a larger home furnishings package exclusive to the retailer. Roots is a critical Canadian apparel brand that became famous worldwide when the company developed berets for the Canadian and other Olympic teams.
Sears can draw on many resources to develop new ideas in its home business. It operates 49 Home Improvement stores in Canada, 12 of which include installation-oriented Home Central showrooms, and 153 dealer stores—independently owned units that include catalog pickup locations. Additionally, over the past decade, Sears launched off-mall concepts that focus on major appliances and floor coverings. The major appliance stores include a significant mattress business while the floor coverings units include a large window coverings business.
Sears Canada’s floor covering operation developed two Coverings Stores and about 50 Floor-covering Centres across Canada. Covering showroom stores weigh in at a little over 11,000 square feet in size, while the independently owned Centres are about 2,500 square feet. Floor covering operations are integrated into the larger Sears system, as mall-based broadline stores offer limited floor and window coverings and recommend the floor covering units to customers looking for more in terms of product and services than they can handle.
Sears Appliances and Mattresses stores are typically about 12,500 square feet in size. About 65% of floor space in the five units is dedicated to major appliances and approximately 35% to mattresses. As is the case with the floor covering units, Sears Appliances and Mattresses stores provide more customer service than the broadline stores.
Sears Canada continues to see the mattress business as a growth opportunity. Over the past few months, Sears has been reinforcing the leadership position it has established as a mattress seller in the Canadian market, said spokesman VincentPower.
Sears Canada has improved mattress delivery by shrinking the time between order and arrival. Additionally, it now will send mattresses priced at more than $500 to their purchasers free of charge. Internally, Sears has established special educational sessions on how to sell a mattress. “It’s a business that is very important to our overall furniture business,” Power said.
Electronics—a component that Sears considers a part of its home operation—is another business that the company has been expanding as an element to advancing its home operations. It has added a variety of flat-panel televisions, a mix of laptop and desktop computers and iPods to its assortment to make it more competitive with other electronics retailers. The expanded assortment was a pilot program in 2006 and rolled out through all Sears broadline and Sears Mattress and Appliance stores in 2007.
The inclusion of the expanded electronics array in the Sears Home stores is indicative of Sears’ philosophy on electronics. Power noted that rooms today are commonly organized around electronics and that furniture and electronics are increasingly integrated in their functions, such as in home offices and media rooms.
Sears is also integrating electronics in promotions. Trying to keep away from too much reliance on price discounting on mattresses, Sears has developed special gift promotions that tie into—and help spread the word on—the expanded electronics assortment. One example included a dollars-off deal on mattress sets, but also a free 13-inch flat-panel television as a bonus. In August, certain mattress purchasers got a digital camera with their bed.
Of course, storage cabinets and other accessories tie into the electronics operation, but Sears has demonstrated, with its cross promoting of key initiatives, that flexibility and creativity will remain critical in its home goods merchandising.
SEARS CANADA| HEADQUARTERS | Toronto, Canada |
| 2006 SALES1 | $1.35e billion |
| 2006 EARNINGS2 | $252 million |
| STORE COUNT | 373 |