What opportunity does JCPenney see in appliances?

The news this week that JCPenney is adding 100 appliance showrooms to its stores raised some eyebrows in the retail industry.

JCPenney was once a major player in major domestic appliances. But it ceded the space in the 1980s to rival Sears and home-improvement retailers like Lowe’s and Home Depot. But now, just slightly more than a year after testing the appliance waters with a three-state pilot program, JCPenney is diving into the deep end. The additional 100 showrooms will bring JCPenney’s total of such operations to 600.

What gives?

Others have pointed out that JCPenney likely sees an opportunity in Sears’ ongoing struggles. And certainly the arrival of new CEO Marvin Ellison is a factor. Ellison is a veteran of Home Depot.

But a look at Checkout TrackingSM data suggests that JCPenney might just be positioning these new showrooms as showrooms for consumers who buy appliances online.

Because such sales are soaring.

  • In 2016 consumers spent $4.0 billion on major home appliance online purchases, a 38 percent increase from 2015 sales
  • Refrigerators, the largest category at 30 percent of industry sales, gained 40 percent compared to 2015 results.
  • Ovens were the fastest growing category of the year with a 69 percent increase.

“While consumers are seeking out the best deals on sizable purchases, like major home appliances, and shopping online offers an added level of convenience, many still want to go to a physical store to see and test the product – marketers who maximize both of these channels will capture the consumer,” according to Joe Derochowski, executive director and home industry analyst at NPD.

For more on online appliance sales, read the numbers in this press release.

To see what the data says about the order in which consumers buy appliances, check out this blog post on the significance of buying a new kitchen range.

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