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One Chart That Shows How Amazon Is Simplifying Sears' Appliance Purchase, Installation Process

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One Chart That Shows How Amazon Is Simplifying Sears' Appliance Purchase, Installation Process
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At first glance, Amazon.com, Inc. (NASDAQ: AMZN) and Sears Holdings Corp (NASDAQ: SHLD) may seem like an odd couple.

But one analyst recently took a closer look at how the two retailers are teaming up to make appliance shopping a breeze.

The Analyst

BMO Capital Markets analyst Wayne Hood has an Outperform rating and $1,200 price target for Amazon.

The Thesis

Most Sears investors would probably blame Amazon in large part for Sears’ death spiral in recent years.

Back in July, Sears may have finally adopted the old adage “if you can’t beat ‘em, join 'em.” Sears announced it would be teaming with Amazon to sell its Kenmore appliances, which include those enabled for Amazon’s Alexa, on Amazon.com.

BMO outlines the process in the image below.


 

A specific Amazon landing page now exists for Kenmore products, which includes helpful videos educating Amazon shoppers about ways to make appliance shopping quick and easy. A few clicks can purchase an appliance the same way any other product is typically purchased on Amazon. After that, buyers can schedule a delivery time, and Amazon will deliver and install the new appliance and even haul away old ones.

In addition to helping promote Alexa-connected homes, Hood said the new partnership helps get Amazon’s appliance business closer to the gold standard set by Lowe’s Companies, Inc. (NYSE: LOW) and Home Depot Inc (NYSE: HD).

“The Kenmore landing page is a marked improvement for consumers looking to purchase appliances on Amazon, and it could give the brand a much needed shot in the arm,” Hood said. (See Hood's track record here.) 

Hood said that, since Amazon and Wal-Mart Stores Inc (NYSE: WMT)’s Jet.com are both still reliant on third-party appliance sellers, they are not yet able to undercut the prices at Home Depot or Lowe’s.

Price Action

Stangely enough, Amazon and Sears shares have been nearly perfect mirror images in 2017. Amazon stock is now up 56 percent year-to-date, while Sears is down another 56.6 percent.

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Photo courtesy of Sears.

Latest Ratings for AMZN

DateFirmActionFromTo
Oct 2018JefferiesMaintainsBuyBuy
Oct 2018Bank of AmericaMaintainsBuyBuy
Oct 2018BarclaysMaintainsOverweightOverweight

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