Earlier this week Mooresville, NC based home improvement retailer Lowe’s announced that Sears once iconic private brand Craftsman is now available for purchase online and in stores. Black & Decker acquired Craftsman in a convoluted arrangement from Sears last year. Craftsman is also available at numerous stores throughout the country including Sears, Kmart, Amazon, Ace Hardware, Lowe’s-owned Orchard Supply, Costco, Blains Farm & Fleet and Atwoods.
Craftsman accounted for the most significant share of the hand tools and accessories market by dollar share as of September 2016, with about 26.6%, and accounted for about 8.3% of portable power tool sales, according to Stevenson TraQline. But its share in both categories declined nearly 6% over the prior four years, shrinking alongside Sears’ sales.
In May 2017 brand insights company YouGov reported that Craftsman was showing particularly troubling signs. Only ten years ago, Craftsman was named “America’s Most Trusted Brand,” well-known for its lifetime warranties, sold in Sears stores. Fast forward to present: Craftsman not only is the new property of Stanley Black & Decker, but also displayed the most substantial decline in quality perception and purchase consideration in the category. Craftsman’s Quality score dropped six points, from 61 to 55 since January 2014.
The announcement adds the fading tool brand to the Lowes private brand product mix – where it stands precisely in the same competitive set as their own private brand, Kobalt. In 2012, San Francisco based branding agency Landor released its annual Breakaway Brands report. The study, which was published by Forbes, is designed to measure sustained growth in brand strength over a three-year period and includes a who’s who of the world’s greatest brands including Facebook, Keurig, Skype, Amazon.com, YouTube, Netflix, and Apple. The 2012 list included a list of three “Brands to Watch:” Kobalt, Foster Farms and Norton. The brands in this list exhibited significant upward momentum, but did not make it into the top 10.
The initial Craftsman collection at Lowe’s features full mechanics tool sets starting at $69.98, tool storage chests and drawer cabinets starting at $29.99, and garage organization separates starting at $79.99, along with other products. Later this year, and in time for the holidays, a broad offering of Craftsman products will phase into stores including individual mechanics and hand tools, power tools and select outdoor power equipment.
In the press release Michael P. McDermott, Lowe’s chief customer officer was optimistic about the move, saying, “We are honored to be the new go-to destination of the iconic Craftsman brand and offer some of the highest quality tools, storage and outdoor power equipment in the industry. Lowe’s and Craftsman have histories that span generations and are rooted in excellent customer service. Together we are making it easier than ever for customers to access the best tools and expert guidance they need to confidently tackle any home improvement project.”
Two questions remain:
- Will the move give zombie retailer Sears a bit more time?
As a part of the brand acquisition Stanley will pay Sears a percentage of its new sales of Craftsman products for 15 years, and during that time, Sears will be able to continue selling Craftsman products royalty-free.
- Will the addition of Craftsman at Lowe’s help them grow market share and profitability? Or is Craftsman an unfortunate distraction which will draw valuable resources away from the Lowe’s private brand portfolio and its potential to create real differentiation and generate significant margin.