How J.C. Penney could benefit, struggle from Sears’ Amazon partnership

With its partnership to sell Kenmore appliances on Amazon, Sears Holding Corp. hopes to rival other hard good retailers like J.C. Penney Co. Inc. (NYSE: JCP). But both companies stand to fight for more than appliance sales as they go head-to-head over hard goods.

Sears (Nasdaq: SHLD) announced July 20 an agreement to sell its Kenmore line on as the company struggles to bring customers into stores, and as its Canadian arm has gone into default.

The Kenmore name is more than a century old, and one of the country’s most iconic appliance brands. While selling the products on Amazon means Sears loses its exclusivity with Kenmore, the move may help bring much-needed revenue to the department store.

“The launch of Kenmore products on will significantly expand the distribution and availability of the Kenmore brand in the U.S.,” Sears CEO Eddie Lampert said in a prepared statement about the partnership.

Stocks of other appliance retailers stumbled the day of the Sears/Amazon announcement. Home Depot’s shares took a 4.5 percent hit, while Lowe’s Cos. Inc. declined 5.9 percent. Best Buy decreased 4.2 percent.

In comparison, shares of Sears were up 13 percent on the news.

J.C. Penney saw a much smaller impact, with its shares decreasing less than 1 percent. But the announcement has more ramifications for the Plano retailer than its stock price.

In January 2016, J.C. Penney began re-introducing appliances into its brick and mortar stores after a more than 30-year hiatus from the sales category. Since then, the company has introduced the products online and said it plans to roll out appliance showrooms to 600 stores by the end of 2017.

J.C. Penney declined to comment on how its appliance business is faring so far and does not separate appliance sales from overall revenue. In its first quarter 2017 earnings, reported May 12, the company said improvements in several departments, including appliances “ provide us with the confidence to maintain our sales guidance for the full year.”

The company’s second quarter earnings will be reported on Friday before market open.

While J.C. Penney has competed with Sears for appliance dollars since introducing the products, Sears’ Amazon partnership gives the rival company a larger platform to market its goods.

“That deal gives Sears the opportunity to remain somewhat relevant in a space where they have been completely marginalized otherwise,” said Jason Moser, an analyst with Million Dollar Portfolio at The Motley Fool. “This deal keeps Sears somewhat current, at least in the consumer’s eyes, which is a plus.”

To keep up, analysts say J.C. Penney must continue pushing its own e-commerce efforts.

And to differentiate itself, the retailer should continue improving its home department, which has been expanded to include Ashley Furniture; pilots of Empire Flooring and Trane heating, ventilation and air conditioning services; bathroom remodeling; quick-ship and installed blinds; home water solutions; awnings and smart home technology.

It also offers washers, dryers, refrigerators and microwaves to commercial and residential property groups.

“I think they can leverage their strength in home with window treatments and other things to create a back-to-front home design service that includes not only treatments and decor, but appliances and smart home features,” added Ed Fox, associate professor of marketing at the W.R. and Judy Howell director of the J.C. Penney Center for Retail Excellence at Southern Methodist University.

However, pushing appliances may hurt Sears and J.C. Penney in areas that both have been pushing to improve – in-store traffic and comparable sales. Because consumers buy appliances infrequently and usually have them delivered, they have little incentive to visit brick and mortar stores. And offering appliances online further reduces the need for a store visit.

In its first quarter earnings, J.C. Penney saw a 3.5 percent decrease in same-store sales, while Sears, which reported first quarter earnings on May 25, saw a roughly 12 percent dip.

“While they have a high-dollar value don’t bring people in stores frequently,” Fox said. “Now people can get competitive products rather than walking into a store.”

The good news for J.C. Penney is that while it continues to work on appliances other initiatives to return to profitability, analysts are unsure Sears will be able to battle store closures and lagging profits to stay in business.

“It’s becoming apparent that Sears is in what’s becoming a death spiral,” Fox said in January. “J.C. Penney will be around in three to five years, and Sears may very well not.”

That means while J.C. Penney might currently be losing customers now to the Sears/Amazon partnership, it could pick up those clients again in the case of a Sears bankruptcy.

“The core customers for the apparel and home businesses at Sears and J.C. Penney were quite similar,” Steve Dennis, president of retail strategy firm SageBerry Consulting, said earlier this year. “They were pretty price sensitive with fairly constrained incomes.”


Upgrading appliances could save you money

Energy efficient.jpg

Focus on Energy’s Appliance Recycling Program is open to customers of participating Wisconsin utilities.

Participants must be residents of single-family homes or multifamily residences of three or fewer units. Two appliances may be recycled per household, per year.

Focus on Energy has recycled nearly 65,000 refrigerators and freezers since 2012.


When to Get the Best Deals on TVs and Kitchen Appliances

You don’t need to be a data scientist to know that holiday sales are great opportunities for bargain shoppers—but to understand precisely when you can snag the best deals, a little bit of big data goes a long way.

That’s why Consumer Reports teamed up with Gap Intelligence, a market research company that specializes in pricing information, to study a year’s worth of product prices from key retailers. We examined four big-ticket product categories—ranges, dishwashers, refrigerators, and televisions—to help you navigate the sales between Labor Day and the end of the holiday season.

The steep discounts that occur around Black Friday demonstrate the magnitude of price fluctuation that exists during the course of a year. By November, the average price of a refrigerator, for instance, dropped almost $250 off the peak pricing we found in May. For the average price of a range, we found a $178 differential—or a 14 percent discount—between the high point in February and the low point in November.

Sometimes the big-picture data can hide some counterintuitive buying advice. Average TV prices peak as new products launch starting at the end of February, but that’s also one of the best times to get a great deal on the previous year’s hot sets.


Things got particularly interesting when we zoomed in on several high-performing models from our ratings. We found significant price fluctuation on certain models; others—especially at extreme low and high prices—barely budged.

So how can past pricing inform your purchasing decisions this fall? If you’re in the market for one of these products now (as in, your fridge is on the fritz), the data show that keeping an eye on a model’s price over a matter of weeks could save you hundreds of dollars.

In terms of 2017 sales events, Gap expects to see similar trends, especially when it comes to Black Friday. “That promotional period continues to get longer and longer,” says Christine Edwards, Gap’s senior market analyst for home appliances. On Black Friday, entry-level appliances might see a dramatic dip as retailers advertise these offers to entice people through the door.

But if you’re shopping for a midlevel or premium appliance, there’s no need to wait until the day after Thanksgiving. “The retail industry is now referring to November as ‘Black November,’ ” explains Debra Mednick, CR’s director of market trends and analysis. As 2016’s data confirm, if you’re after a new kitchen suite or television—and you can hold off—it pays to wait out Labor Day sales and shop come November.

To calculate the average price in the product categories below and track the price of specific models, we teamed up with Gap Intelligence, a market-data company that tracks pricing and promotional activity for in-store and online products selling in key national, regional, and online-exclusive retailers on a weekly basis. (For each category, we excluded extreme outliers, eliminating TVs costing more than $8,000 and ranges and refrigerators more than $10,000.)

A man walking out of an electronics store after getting the best deal on a TV


“Most TV models are replaced or refreshed every year, and their pricing tends to follow a fairly consistent 12-month curve,” says Deirdre Kennedy, senior analyst for TVs at Gap Intelligence.

Our examination of the average price of a TV, as well as our study of four recommended 2016 models, shows that after new television models were introduced from early March to late May, prices began an immediate and steady decline. When Black Friday promotions began in November, prices dove across the board. We found many sets selling for as little as 50 percent of their original retail price.

Our analysis found another window for snaring a great deal starting a few weeks before the Super Bowl and running through March. During that time, average TV prices rose as new models entered the market, but prices on the preceding year’s TVs hit their low point as retailers worked to clear out old inventory and create shelf space for new arrivals.

Below, we compared the average price of a TV over the course of 2016 to four select models from our television ratings:

• Samsung UN65KS8500 TV
• LG 60UH8500 TV
• Samsung UN55KS8000 TV
• LG 49UH6100 TV

A chart that shows the average price of high-rated TVs for 2016


Belkin WeMo Mini Smart Plug Review: Automate your dumb appliances

Belkin WeMo Mini Smart Plug review

The WeMo Mini Smart Plug lets you control and automate nearly any device in your home. Plug the WeMo Mini into an outlet, then plug a lamp, fan, or coffee maker into it and you’ll have control no matter where you are. The smart plug works with Alexa, Nest, Google Assistant, and IFTTT, which means you can also set up specific automation recipes and issue voice commands to your plugged-in devices.


Few smart home products are easier to setup or more straightforward to use than the WeMo Mini. You plug into an outlet, download and install the WeMo app, and then connect the smart plug to your Wi-Fi network. After labeling each WeMo plug with the name and a photo of the device it controls you can use your phone to either set specific schedules for that device or simply turn it on and off remotely when you want.

Over the course of a week, we tested our WeMo Smart Plug with a variety of floor and desktop lamps, a window fan, a coffee grinder, a hot water kettle, and a sleep machine.


After dealing with an ever-changing landscape of smart home hubs, cloud storage subscriptions, and interoperability issues, the WeMo Mini Smart Plug was a refreshing change of pace. If you have a Wi-Fi network and are capable of plugging something in, you’ll be able to figure out how to use it.

What’s particularly attractive about the WeMo, in addition to the $35 price tag, is its flexibility. The plug can be used in a variety of situations and functions both as remote power switch and as a smart device scheduler. It’s small enough so that you can fit two on top of each other in a standard double socket, and it enjoys broad compatibility with other smart home platforms and voice assistants.

Belkin WeMo Mini Smart Plug review double

The horizontal form factor makes it possible to use a pair of Smart Plugs in the same outlet.


During our week of testing, we used ours to control various lamps in our home using both the WeMo app and Alexa. We also plugged a hot water kettle into the Wi-Fi switch and set up a schedule that yielded perfect 203F degree water for pour over coffee brewing right as we got up in the morning.

All of the scheduling is done via the WeMo app’s rules page. Here you can set up any number of time- or day-based schedules. For instance, with two plugs you can turn a bedside table light on and a sleep machine off at a specific time or when the sun rises. There’s also a handy “away mode” that turns a lamp’s lights on and off at random intervals to make it appear as if you’re home. Because the WeMo works with platforms like Nest, you can also configure the plug to turn on a specific light when your Nest Learning Thermostat recognizes that you’re home.

In all of these scenarios, the smart plug worked almost flawlessly. Occasionally, the app was sluggish or would get hung up, but that seems to be the norm for pretty much every dedicated smart device app these days. Apple households may miss HomeKit compatibility and the ability to use Siri, but given all the other smart platforms that do work with the WeMo, that pining will probably be brief.


Punters put cheap appliances to the test

The viral story of the K-Mart vacuum cleaner that can outperform a Dyson has prompted more face-offs between brand name appliances and some low cost alternatives.

Working mums Heidi and Lauren put a number of appliances to the test for A Current Affair, including kettles, irons, slow cookers and blenders.

They found that for the most part, the cheaper appliances came close to or matched the performance of its more distinguished counterpart – for significantly less of a cost.

Choice Magazine spokesperson Kate Browne said the same results were reflected in her publication’s findings.

Slow cookers feed the whole family.Slow cookers feed the whole family.The battle of the vacuum cleaners has gone viral.



GE Appliances moves to relocate Louisville production line to another U.S. facility

GE Appliances, a Haier company, informed employees and officials from the IUE-CWA Local 83761 it is moving forward with its plan to return to Appliance Park the Supplier Distribution Center operated by Derby Supply Chain Solutions. It’s a company that manages supplier-owned parts for GEA.

Making adequate room for the Derby SDC in Building 2 requires the relocation of Zoneline PTAC (Zoneline) production, resulting in a Transfer of Work (TOW) under the collective bargaining agreement with the IUE-CWA Local 83761, which represents production employees at the Park. Union officials had the opportunity to present GEA with alternatives but General Electric did not find them viable.

General Electric made the decision to relocate the production of Zoneline to another GEA U.S. manufacturing facility. The selection of a new location will be finalized in the coming weeks so that the transfer of work will begin in November.

One-hundred and forty production and maintenance employees in Building 2 will be displaced by this action but will be absorbed into other areas at Appliance Park. No hourly layoffs will result from these actions.

“We have been looking for ways to regain the economic and supply chain advantages of an on-site parts distribution center since Derby moved to Shepherdsville, Kentucky. after Building 6 was destroyed in a fire in 2015,” said Bill Good, vice president of GEA’s supply chain network. “After an in-depth evaluation of all the buildings in Appliance Park, we determined the only feasible location for the SDC is Building 2. This central location next to our largest production operations enables real-time distribution of parts, eliminates production disruptions due to traffic and other transportation-related delays, and allows for rapid transitions to changes in customer orders. That speed and agility is essential for us to meet commitments to customers and be on par with our competitors.”



Whirlpool’s stock falls nearly 7% as the appliance maker says an Amazon-Sears deal isn’t a concern


Whirlpool clothes dryers on sale in San Francisco.

Getty Images
Whirlpool clothes dryers on sale in San Francisco.

Whirlpool’s stock was falling nearly 7 percent Thursday morning a day after the appliance manufacturer delivered earnings and sales for the second quarter that missed Street estimates.

On a call with analysts and investors Thursday morning, the clear elephant in the room was quickly mentioned — Sears recently signing a deal to sell Kenmore appliances on The day Sears announced this partnership, shares of Whirlpool, Home Depot, Lowe’sand other providers of home appliances immediately dropped.

Though Whirlpool makes products for other retailers, it also manufactures Kenmore appliances for Sears. The main question — regarding Sears selling on Amazon — remains how industry pricing will be impacted as a result.

Nameplates like Whirlpool, Kenmore, GE, Panasonic and Maytag are all popular in the home appliance space today. Yet, some brands are doing a better job than others of growing their presence online, where more and more shoppers are inherently ringing up big purchases.

“In the short term, given that we produce Kenmore … there are certainly [no] negative impact on us, if at all, [it could be] neutral to even slightly positive,” Whirlpool COO Marc Bitzer said on Thursday’s earnings conference call. “In the long term, strategically, I think many things have to be seen. … Obviously we need to see how strong the sell-through is on this one.”

Bitzer went on to say he’s looking to see “to what extent [this partnership] can mitigate the inherent Sears decline.”

“We expect that our agreement with Amazon to launch Kenmore products on will significantly expand the reach of the Kenmore brand and drive growth opportunities across three of our divisions – Kenmore, Sears Home Services and Innovel – as well as our Kenmore manufacturing partners,” Sears spokesman Howard Riefs told CNBC in a statement in response to Whirlpool’s comments.

In short, Whirlpool executives aimed to convince investors Thursday that Sears’ new venture on is neither a “good nor bad impact” for the company.

Meantime, analysts continued to probe the company with questions about Amazon as a disruptor in the space.

Whirlpool is unique in that its online presence largely depends on its existing trade partners — Home Depot, Lowe’s and even Sears. Bitzer called the Sears news an “interesting development” and said, for now, Whirlpool-branded products are staying off

“Our position is and always has been [we’ll] be where our consumers want to shop,” Whirlpool CEO Jeff Fettig said. “And we’re doing that today with the trade partners we deal with. … We will make decisions to make sure we are appropriately represented in the value chain.”

In other news, it had already been announced that Fettig will step down as CEO of Whirlpool, effective Oct. 1. Bitzer will succeed Fettig.

On Wednesday, Whirlpool lowered its profit outlook for 2017 on account of the rising costs of raw materials. Currency headwinds and tax bills are also seen as hurting the manufacturer’s financials.

With Thursday’s declines, Whirlpool’s stock has fallen more than 7 percent over the past 12 months. The shares are down about 2.7 percent for the year.


How manufacturers blend products, services on the path to XaaS

Story image for Products from Diginomica

A combination of rising connectivity and more sophisticated automation is transforming traditional businesses as they blend products and services in new ways. In product-led industries such as manufacturing, this trend first manifests itself in the growth of services alongside products. But it doesn’t stop there.

As enterprises progress along this journey, they discover that selling services in a connected world fundamentally changes how they engage with their customers. They are no longer selling discrete products and services, but blending both together to satisfy a customer need. Welcome to the world of XaaS — everything as-a-service.

We promised some real-world examples in our opener to this series, A CxO’s practical guide to surviving the XaaS revolution. Here we’ll explore what several leading manufacturers have discovered as they’ve set off down this path, which business academics often call servitization. Professor Tim Baines, an expert in the field from Aston Business School, says that many businesses begin by adding services around existing products:

Quite often it means moving first towards what we call intermediate services, which is prepare, overhaul, condition monitoring, help-desk, a bit of training on the side, those type of things.

Ultimately, it moves into these more advanced services, much more of the outcome-type contracts. They’re delivering the outcome, delivering the process, delivering the performance.

Changing the relationship

Organizations that are already delivering ancillary services can use today’s more agile, collaborative technology platforms to make those offerings more engaging. Hewlett Packard Enterprise, the $50 billion revenue IT giant, retains a significant services capability despite spinning off its consulting and outsourcing business in April this year.

Adam Jones, Advanced Planning & Innovation Lead within HPE’s technology services organization, explains how new technology and different expectations are changing the service organization’s relationship with customers:

We’re seeing our customers wanting to be more proactively, pre-emptively notified of what’s going on. They want to be socially connected to resolve issues and indeed to solicit feedback on best approaches and also want us to understand their social profile and align our engagement with their needs.

In manufacturing, the ability to add sensors and Internet connections to products helps improve existing field service and customer service offerings, as well as add new outcomes-based services. One example is elevator and escalator maker Kone, which already derives around 45% of its $10 billion in annual revenues from its services business.

Proactive service culture

Kone has used technology to connect its 20,000 field service technicians, along with agents in its customer service call centers, at the same time as adding sensors to products in the field. Company CIO Antti Koskelin says this has opened the doors to a more proactive, predictive service culture:

If we’re able to get a better view of what kinds of requests customers will make, what their service needs are going to be and what types of issues they might face with their equipment, then we’re able to react better. And if a service technician arrives at a customer site with more information about the customer, its equipment and its contract with us, then they’ll do a better job.

But it goes further than that. We need to be very good at providing the services that customers say they need, certainly, but our goal is to provide the services that they haven’t recognized themselves yet and point it out to them.

New ways of working

In the mass consumer market, home and kitchen appliance maker Bosch is also shifting from one-off sales to a more connected, engaged customer relationship. It has pursued an Internet of Things (IoT) strategy to make its products connected, as a result of which it has to fundamentally change how it thinks about customers. This has meant learning new ways of working that are unfamiliar to product companies, says Stefan Ferber, VP of Engineering at Bosch Software Innovations:

The company has moved quite a lot over the past few years and with that we have learned what it means not only to be a producer, but also you serve the customer, you have a continuous relationship with your B2B and B2C customer. These are all things that are not so common to producers in that space.

The customer relationship is quite different, because when the product is connected, it means staying in touch with the customer. In the old product sales model, the manufacturer only heard from the customer if they had a problem, he explains:

The story starts when the customer for the first time is opening a box with your product in there. Then you build up a new connection, a new relationship with your customer. From there the real product story starts.

For traditional companies ‘success’ meant the customer got their product, had no problem, job done. If someone is calling, you had a problem. This mindset of course takes some time to change, you need different sales people, you need a different marketing approach, you need a different call centre approach.

Not just adding services to products

These insights from enterprises that have embarked on this journey demonstrate how much more of a transformation it is than merely adding services to the product set. The combination of connected technology and continuous service delivery opens up a new type of customer relationship.

In the next post in this series we’ll look at other aspects of that new relationship, including the move to subscription and pay-as-you-go business models, and a more customer-centric service design ethos. Meanwhile, please give us your observations and reactions in the comments below or on social media using the #XaaS hashtag on Twitter or mentioning us on LinkedIn.



UK government suddenly realises smart meters should link to appliances

UK government suddenly realises smart meters should link to appliances

THE UK GOVERNMENT has announced that it wants to use smart technology in the home to make households “at one” with the National Grid.

The Department of Business, Energy and Industrial Strategy has been working with OFGEM, the energy regulator, to come up with a plan whereby your fridge could be told to cool its boots for ten minutes if there was a local power surge, or excess power generated by roof solar panels was sold back to the National Grid.

The announcement was laced with much thrills and excite about improved battery technology, meaning being able to store excess power for a rainy day, even when electricity and rain don’t mix anyway, dumbass.

As part of this, a £246m “Faraday Challenge” was launched to help teams come up with new ways of improving battery storage.

Here’s the problem, brainiacs. Big flagship policies like this are all very well, but you already sailed the ship. The disastrous rollout of smart meters has already begun and not only is the aim of 2020 for completion unlikely to be met, a whole bunch of them will have to be refitted at a later date because they don’t meet the common standard.

And getting things to talk to each other isn’t as easy as you’d expect at the best of times. Smart home devices are all using competing standards and most of them aren’t ruddy compatible as it is.

Meanwhile, smart meters, which would be the interface between the National Grid and your home, run on a mixture of SIM cards (WHY? SERIOUSLY? WHY?) and Zigbee. Now, Zigbee is a common standard. Problem is, the National Grid standard requires it to be made incompatible with other Zigbee devices for security reasons.

Imagine if we could just hook our meters into our SmartThings, or Homey or WeMo rigs from the outset? But nope. Nothing doing. There are devices like Smappee which hook around the meter and take a reading of the electrical “signature” which is designed to do the same job, but that works on a completely different standard. Yes. Another one.

So whoopee-do to the government for recognising the potential for energy management using the smart home. Really. Well Done. Brilliant.

Trouble is, as with most of these things, it’s been announced by people who have no idea what it means in the real world and have already pre-borked it. Sigh. µ


3 home tech ideas for your tiny space

So, you got that tiny house. Or that compact one-bedroom apartment for which you endured a frightening co-op board interview. Or you and your partner moved into a studio that is really not meant to accommodate two people. Congrats! You are now Living Small.

There are innumerable ways you could make the most of this: Modular, multi-use furniture is one big way (especially when it doubles as storage); another is to trick out your new tiny abode with home tech.

“‘Home tech? how’s that going to help?’” you say. Well, we’ll tell you. While there’s no shortage of smart home gadgetry out there to help with problems you don’t have (we’re looking at you, smart fridges), there are also a few ways to use smart home products to get the most out of your space. Here are a few products we think will help ease you into the tiny living lifestyle.

Smart plugs are your friend

For even the most home tech averse among us, the allure of the smart plug is hard to deny. Sticking any of these Wi-Fi-enabled plugs into your existing outlets turns the outlet into a smart one that can be controlled with your mobile device via an app associated with the smart plug.

Our historic home-loving columnist is a recent convert—and who wouldn’t be, when on a hot day you can turn your air conditioner on from your phone on the way home from work? You can also, of course, use smart plugs for just about anything—from lamps to fans to just about anything else you plug into an outlet. For those of us who live in compact places, this means you can work with what you’ve got: no need to buy new, smarter things for your tiny space.

There are lots of options on the market and, unlike other things in the home tech world, they come at a reasonable price. Belkin and TP-Link each sell popular options you can find on Amazon.

Sony’s Life Space UX short throw projector and LED bulb speaker

Sony’s ultra-short-throw projector can turn a surface a mere 22 inches away into a screen for watching your favorite shows and movies.

Entertaining can be a challenge in a home of any size, but Sony has recently released a couple of products that could make that easier for the space starved.

The company’s Life Space UX series includes an ultra-short-throw projector (at a spendy $789), which turns any flat surface into a screen. Life Space UX also includes a lightbulb (at just shy of $240) that is both a color-changing illumination source and a Bluetooth speaker. The latter sounds gimmicky, but this editor has seen it in action (at both its unveiling at MoMA Design Store in New York and in a friend’s apartment). It’s actually quite nice, with solid sound quality. If you’re truly starved for space, combining an essential function with a non-essential—but delightful and quality-of-life improving—one is pretty smart.

Consider buying a smart home hub

Google Home.
 Courtesy of Google

The Amazon Echo has done a lot to popularize the idea of the home tech hub, a gadget that acts as command central for your Smart Things devices and responds to voice prompts.

Not long after the Echo debuted, gobbling up marketshare, Google entered the fray with the Google Home—and it was soon followed by the Apple HomePod, which purports to have better audio quality when compared to its competitors.

A smart home hub of any kind is going to help you. With voice commands you can toggle smart lights on and off, and listen to music and the latest news. It will serve up weather information, and more, in a rather compact unit that won’t take up a ton of counter space. For a guide to the what’s what of home tech hubs, you can read more here.