Sears crafts Web push that could hit $100 mil

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Sears, Roebuck & Co. is putting its money into e-commerce.

The retailer will leverage $100 million in total marketing behind sears.com in a play to bring younger, more Web-savvy consumers into its fold. The push kicks off with a $7 million TV campaign breaking this week.

"Sears is now a dot-com player," said Joe Charno, VP-relationship marketing at sears.com. "We are focused on our internal mission toSears.com became the definitive online source for the home."

The TV spot, from OgilvyOne Worldwide, Chicago, breaks Nov. 4. It shows a 1950s-era family peering at new appliances in a Sears department-store window. The scene then moves to a modern family viewing a computer monitor displaying the sears.com Web site.

PRINT STARTED IN OCTOBER

Commercials will run on national cable TV networks, including CNN, E!, HGTV and TBS. A print component of the campaign started in October issues of Better Homes & Gardens, Home, Martha Stewart Living and This Old House. Banner ads will run on online sites ivillage.com, lycos.com and realtor.com.

Interestingly, the first lines spotlighted in the new online push are among Sears' oldest and most trusted. The first campaign touts appliances; a later holiday effort--also budgeted at $7 million--will showcase Sears' revamped tool lineup, both online and in-store. Its Craftsman brand tools have been available online since November 1997.

MORE TOOL BRANDS, SECTIONS

Under pressure from home-improvement chains Home Depot and Lowe's, Sears has reformulated its tool offerings with more national brands besides Craftsman in the mix, and also has created new Tool Territory sections, both in its stores and online. Tool Territory has been testing in Hartford, Conn., and Virginia Beach, Va.

Next year, Sears will set up a Parts Direct and Wish Book section online.

Sears hopes the Web site push "will attract a new demographic" to the retailer, Mr. Charno said.

HIGHER-INCOME POTENTIAL

Its current customer base is mainly "middle American" females, he said, but the online site has the potential to bring in higher-income shoppers.

As it rolls out additional selling areas for its site, Sears.com will step up marketing.

"We expect to have a budget [for e-commerce] three or four times [the current $14 million] for next year," Mr. Charno said.

That could mean $40 million to $60 million in media, although Mr. Charno was quick to caution that no budget has received final approval. Even so, that's only a small slice of Sears' total $1 billion-plus marketing arsenal.

Although OgilvyOne's Chicago office has been working on the site and developing the advertising, OgilvyOne's New York is doing comparable work for rival Wal-Mart Stores.

"I do not view it as [a conflict] right now," said Mr. Charno.

MAJOR OVERHAUL

The online push is part of a broader initiative. Sears executives, moving to improve the stores' performance, have begun a major marketing overhaul, focusing on specific sale events and a push for a value message through its new tagline, "The good life at a great price. Guaranteed."

As part of its reassessment, Sears will weed out $1 billion in underperforming product lines, "in order to refocus our company on the categories were we can lead," Sears Chairman-CEO Ar-thur Martinez told analysts earlier this year.

It's also considering making its stores less like the department stores of old and more like its discount competitors of today by providing customers with shopping carts and more checkout counters.

Kurt Barnard, president of Barnard's Retail Trend Report, said Sears' online effort is just one of the elements pushing its next turnaround, which he believes has already begun.

'SLICING THE SALAMI'

"They are slicing the salami at both ends," he said, referring to both online and brick-and-mortar sales.

Mr. Barnard also said Sears' new hard-selling tack has "cost [competitors] business" in the back-to-school season.

That sunny appraisal is not universally shared. The retailer suffered a setback last week when it was dropped from the Dow Jones Industrial Average.

Copyright November 1999, Crain Communications Inc.

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