From Forbes on April 26, 2016:
With speculation about the future of Sears Holdings running rampant among analysts and amid news of additional store closures, one has to wonder which retailers might step up with shoppers should a Sears shutdown become a reality. Earlier in the year, I detailed the highs and lows for Sears, according to insights from Prosper’s consumer survey of more than 6,000 U.S. adults 18+. One positive that remained for Sears was its first place position in appliances; however, while Sears currently leads in this category, the once dominant department store’s share is undoubtedly slipping with shoppers. With some of retail’s biggest boxes, including Home Depot and Best Buy, vying for the appliance crown, recent analysis reveals that Lowe’s appears to be best positioned to succeed Sears’ reign.
According to Prosper’s shopper preference share for appliances (resulting from a quarterly unaided, write-in question posed to consumers), Sears and Lowe’s are the dominant players in this category, with 20.9% and 14.3% share respectively, while Best Buy (10.9%) and Home Depot (9.1%) jockey for third and fourth positions. Walmart is a distant fifth (6.7%). A closer look at our consumer trends, though, shows that the gap between Sears and Lowe’s has been steadily decreasing in the latter’s favor, narrowing to a single digit point spread over the past year.
Compared to their respective five year averages, Lowe’s, Home Depot, and Best Buy are currently well-positioned with shoppers overall, while Sears and Walmart are facing declines. Our insights indicate that Gen X and Boomers have an affinity for Lowe’s in particular, while the Millennial generation has been slower to warm up to the home improvement giant (which currently ranks fourth among these younger consumers, ahead of Home Depot, but behind Sears, Walmart, and Best Buy). That said, though, Lowe’s is gaining ground among Millennial shoppers; in March, nearly one in ten (9.2%) indicated they would shop there first for appliances, a 20% gain over the five year average. The caveat for Lowe’s, however, is that Best Buy and Home Depot are also strengthening their positions with these young shoppers as Sears and Walmart are fading (see chart below).
So why is Lowe’s poised to be the Sears appliance successor over its big box rivals? Besides an already strong second place ranking among consumers in general, shoppers seem to view the retailer in a more favorable light than its competitors according to the Net Promoter Score®* metric of loyalty and retailer affinity. Among appliance shoppers overall, Lowe’s currently maintains the highest Score of the top five retailers, a rating that is more than doublecompetitor Home Depot and nearly quadruple that of Best Buy. Interestingly, Sears maintains the second highest NPS® among shoppers – well, the old dog is still top dog in this category – while Walmart is plagued with a negative Score. The NPS discrepancy becomes even more apparent among Millennial shoppers. Among this very vocal /social / sharing generation (on the precipice of becoming the next wave of big spenders), Lowe’s was the only appliance retailer in the top five to receive a strong NPS; Sears barely broke even, while Home Depot and Best Buy suffered negative Scores – that kind of impression among shoppers isn’t likely to foster long-term loyalty.
Pam Goodfellow is Principal Analyst/Consumer Insights Director for Prosper Insights & Analytics™ and editor of the monthly Consumer Snapshot.
*Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld