Contractors, Carrier, And Sears

May 24, 2003
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The ink has long dried on the agreement between retail giant Sears and HVAC cornerstone Carrier Corp., whereby Carrier-brand equipment is sold by Sears and installed and serviced by Sears subcontractors (The News, Sept. 30, 2002). More than eight months later, what are dealers thinking and feeling?

While it’s true that some are still dealing with strong emotional reactions, many more have found reasons to rejoice — especially those who market their own company as their brand, and those with very intimate knowledge of how Sears goes to market in the HVAC world. This article will represent their points of view.

Dealer Feels Confident

Steve Saunders is president and CEO of Tempo Air, Dallas. The company is a Carrier Distinguished Dealer.

“The advantage [Sears] has is marketing,” Saunders said. “Their biggest disadvantage is, HVAC isn’t their thing.

“I don’t see them as a huge competitor,” he said, with or without Carrier products.

The benefits of having Carrier in the Sears fold is that Sears spends so much on advertising, from which all Carrier dealers may benefit because it “raises the brand awareness of Carrier products. If it is successful, the opportunities will increase for those who remain closely aligned with the brand.”

However, contractors should not become so closely aligned with any one manufacturer’s brand that they lose sight of their own brand: their company, and what it has to offer customers that makes it distinct from competitors. “It’s time to build your own brand,” Saunders said.

He acknowledged that “The Sears stuff has got people nervous, anxious, and scared.” Part of it is due to the perceived difficulty of dealing with change. “Change is wonderful,” Saunders quipped. “You go first.”

He also reinforced the importance of a contractor aligning his company with a good manufacturer. “You’ve got to pick someone [manufacturer] to support you,” Saunders said. “It’s the product, delivery, and reliability.” In his opinion, “Carrier does a good job.”

Former Sears Sub

Rich Dykstra Sr. is president of DM Dykstra & Co., Crestwood, Ill. This Distinguished Dealer has been a Carrier dealer since 1983.

When Dykstra first heard that the manufacturer would be marketing the Carrier line through Sears, “I thought it was great,” he said. “The added exposure has acted as I thought it would. People are calling after they see the Sears circular in the Sunday paper and say, ‘I saw your ad.’ I say, ‘OK.’” He doesn’t explain that it actually wasn’t a Dykstra ad, of course.

Dykstra noted that the exposure for the brand he sells (Carrier) is tremendous. He doesn’t feel threatened by Sears. In fact, he says his pricing is sometimes more competitive than the Sears pricing.

In every way, “I look at the Sears thing as an opportunity,” he said.

Carrier’s Feedback

Halsey Cook, president of Carrier North America Residential, simply stated, “The relationship is tracking just as it should.” The manufacturer did it to develop different channels to the market.

The intent was not to become estranged from the company’s dedicated dealers, he reaffirmed. “We didn’t do this to lose business,” Cook said in a recent News interview. “We are absolutely committed to our dealer-contractor community.” Moreover, it “will not take over our traditional distribution,” he pointed out.

“A number of people were concerned that we were giving up on our contractors,” he said, “but this is beneficial to all associations with the brand.

“A lot of the nervousness has died down,” he continued. “There were very few instances where people said they lost jobs to Sears — none have come to me personally.” One instance was presented at the ACCA convention, he said, and it was immediately addressed.

As far as Sears’ advertising of the brand, the plans are impressive. Cook said the retailer will generate “some 1.3 billion impressions” through advertising per year. “These can’t help but have a benefit for our dealers.”

At first, he said, the manufacturer received letters from people who were shocked and concerned with the reactions from dealers. Now people are seeing the benefits. With time, he said, the company expects less-emotional reactions.

In some respects, “It has created an opportunity for us to talk with our dealers,” Cook said. Make that, Cook turned it into an opportunity by taking contractors’ questions at ACCA and elsewhere, and communicating via phone and e-mail. Cook called it “healthy feedback” that could have ramifications for the future — putting contractors in touch with the manufacturer directly, more frequently.

Over time, “We will certainly evolve to more dealer-focused forums,” Cook said. Again he emphasized that this is not intended to bypass traditional distribution. “We’ve set up so many opportunities for communications,” he said. “We will talk to them.” To do so, Cook said that the starting point is to get in touch with your Carrier rep or distributor.

“Anything that our Carrier dealers tell us, we take to heart,” he said. “There’s room enough in the market for our mutual success.”

Sidebar: Sears HVAC Timeline

Early 1930s
ICP and its predecessor companies (i.e., Heil-Quaker Corp., Inter-City Products) have an OEM relationship with Sears.

1957
Heil and Quaker merge to form Heil-Quaker, owned by Sears.

1964
Sears sells part of its stock (including Heil-Quaker) to Whirlpool Corp. Heil becomes an OEM supplier of Kenmore A/C systems. Sears continues to hold an ownership interest in Heil.

1978
Sears sells its remaining interest in Heil-Quaker to Whirlpool.

1986
Inter-City Gas Corporation (ICG) acquires Heil-Quaker Corp. Over the next 10 years, ICG goes through several ownership changes, eventually emerging independently as International Comfort Products Corp. (ICP).

1999
Carrier Corp. acquires ICP.

2002
Carrier and Sears sign a three-year agreement under which Sears may market, sell, install, and service Carrier-brand equipment; ICP announces that it will continue to be the exclusive OEM of Kenmore-brand residential central heating-cooling equipment for Sears.

Publication date: 05/26/2003

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