The Software Side of Sears

Can you really profit selling dishwashers online?

In its day, the Sears, Roebuck & Co. Catalog represented one of the most advanced retailing tools ever conceived. Through the phonebook-size publication, residents of rural America could order everything from cowboy hats to prefabricated houses, while expecting fair prices and reliable delivery.

Sears still publishes catalogs today, but the cutting edge is, a sophisticated online operation that has achieved remarkable popularity while moving steadily toward profitability.

Sharing the assets and management of the retailers brick-and-mortar operation, broke into the ranks of the top 10 online retail sites this year, surpassing Dell Computer and Ticketmaster in unique visitors, according to Jupiter Media Metrix. Against its traditional competitors — J.C. Penney, Kmarts, Target and Wal-Mart Stores — Sears has managed to achieve first place in three of the first seven months of the year, according to Jupiter. Wal-Mart also managed three first-place rankings, while Target came out on top once. had 3 million unique visitors in July, compared with 20.5 million who went to online retail powerhouse

While other retailers have struggled to deal with the complexities of apparel sales, Sears bypassed that market after research indicated trouble with returned merchandise and low profit potential. Instead, the Hoffman Heights, Ill., retail giant is defending its turf by selling major appliances, home, garden and recreational equipment, among other products.

While most retailers might see the idea of selling a dishwasher online as a no-win proposition due to high transportation costs, Sears saw online sales as a way to defend its leadership in a major market while taking advantage of a well-established service and delivery system. In keeping with its conservative, profit-oriented approach, Sears conducted exhaustive research before plunging into washers and dryers.

"We now have over 2,200 appliances online," says Dennis Honan, Sears head of online retailing. "When we launched, we didnt just think about buying an appliance online, we thought about how we can make the experience better."

The depth of information on appliances is designed to help shoppers pick a product, even if they plan to buy it in a store, Honan says. Sales clerks often see shoppers carrying printouts from the site, he says. In addition to selling its own Kenmore appliances, Sears offers the other major brands, providing pricing, detailed comparisons and multiple images of the products.

"Major appliances is a Sears strength," says Sears spokeswoman Ann Woolman. "We have 38 percent of the market. If you put the No. 2 through [No.] 15 retailers together, thats our market share."

Seven months after its online appliance launch in April 1999, became an online hardware store as well. After beginning with its trademark Craftsman brand, the site now offers 120 brands of tools. Transferring Sears lead in lawn tractor sales to the Web seemed a natural progression. Less prominently, operates a parts site with 4 million components on sale.