Following a successful pilot program, J C Penney plans to return to appliance sales now that the housing market has strengthened and the economic recovery has seen consumer habits shifting.
Appliance sales to return to half of J C Penney stores
J C Penney began selling appliances at its “first-line stores in 1963 but fell away from them in the early 80s and focused on apparel, jewelry and soft home goods. While the retailer has sold appliances online, that was more a reselling operation than becoming an appliance retailer.
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Major appliance sales were up 4% last year from 2014, bringing total sales to nearly 40 billion for last year.
“When we looked at data on what customers would buy from us if we carried them, appliances were at the top of the list,” said David Plummer, a senior vice president who oversees J C Penney’s home business.
Unlike J C Penney, Sears for decades along with a few other department stores were the go to for appliance sales. In 2005, department stores were selling about 23% of major home appliances but owing to a willingness to shop online, the rise of Home Deport and others, a bit after a decade later department stores are only accounting for about 14% of appliance sales.
Trouble may lie in sales staff
Home Depot, Lowe’s and others, not surprisingly, saw their sales numbers go the opposite direction with home and garden stores selling 34% of appliances in the United States last year.
“There are plenty of malls where J C Penney and Sears are the two flagships, and Sears is currently the only option for appliances, so if J C Penney can come in with a good value proposition, they can take some of that market,” said Ryan Tuttle, a research analyst with market research firm Euromonitor International. (His sales numbers were also used for this article.)
Tuttle sees a major hurdle for J C Penney in getting its floor staff up to speed as Home Depot employees are selling major appliances regularly and their knowledge will certainly be superior in this area.
Samsung, L.G. Electronics, G.E. Appliances and Hotpoint will make up the lion’s share of appliance sold by J.C Penney in the almost 500 stores that will cut furniture and mattress floor space to make room for appliances.
The company is looking to set aside 2,000 to nearly 5,000 square feet for the selected stores and will do so with less productive floor space.
“Some of the home space we have is pretty unproductive, and this is helping force that conversation,” Plummer said.
“By combining our soft home and window coverings merchandise with the industry’s leading brands for appliances, furniture and flooring, J C Penney will become a destination for home design and redecorating, allowing us to weatherproof our business during seasonal periods of the year,” CEO Marvin Ellison said in a statement.