Image Credit: Mike Mozart (Flickr @jeepersmedia)

Last week, Sears and Amazon announced a partnership that will bring the Kenmore brand of appliances to Amazon.com. The deal, which also brings Amazon’s smart home voice assistant Alexa to the Kenmore lineup of smart appliances, marks the first time in Kenmore’s hundred plus years the iconic appliance brand will sold through a non-Sears channel.

The reaction to this deal was mixed. Wall Street loved the idea of Kenmore tapping into Amazon’s retail savvy and Alexa platform, while others saw the deal as something of a white flag for Sears.

The reality is this deal has many net positives – and a few downsides – for both. Let’s break it down for each side:

Sears/Kenmore

Sears’ struggles over the past few years are no secret, and with more stores closing every year, it’s no surprise that Kenmore’s market share has also been shrinking. By virtue of its up-to-now exclusivity with Sears, the appliance brand has simply been in less storefronts every year, which has meant less opportunity to capture the consumer dollar..

Sears stores 2010-2016. Source: Business Insider

The Kenmore brand has also lost some luster over the past decade, as Gen-Xers and Millennials have looked at new entrants into the appliance market such as Samsung and LG. The brand is, in many ways,  mom and dad’s (or grandma and grandpa’s) appliance brand, so the addition of Alexa smarts could give the brand a well-needed upgrade.

The deal also allows Sears to keep its most popular remaining brand. Last year, the company sold the Craftsman brand to Black & Decker, which gave the company a liquidity lifeline, but also meant it was beginning to cut into bone as it struggled to turn itself around.

Long term, however, the deal still doesn’t seem to change the long-term trajectory for Sears. The company’s existing retail format is expensive and outdated and this does nothing to change that. If anything, it could mean less sales of Kenmore appliances in Sears storefronts as more are sold online through Amazon, which could accelerate store closures long term.

Amazon

The deal for Amazon is almost (but not entirely) net-positive. Not only do they get a semi-exclusive distribution deal as the Kenmore brand’s only non-Sears sales channel, but it also likely locks the Alexa platform in as Kenmore’s primary voice interface.

Long term, it also makes Amazon a bigger player in white goods and appliances. While it’s unclear if Amazon would launch their own brand of appliances – my gut tells me they probably wouldn’t – you can never rule anything out with Amazon.

The biggest downside for Amazon? How this deal could benefit other voice assistant and smart home platforms.

Think about it: For other Amazon appliance partners, the deal probably is a bit of an annoyance. After making much of their CES this year about Alexa integration, Whirlpool probably can’t help but be a little annoyed with this deal. This deal will reinforce the reality that while an Amazon Alexa integration is necessary, it would be wise to not put all your eggs in the Alexa basket.

The deal could also have an upside for Google and Apple. While many appliance companies have already done Nest integrations and have been working on Google Assistant integration, this deal will likely push them to push down on the gas pedal. For Apple, who has been moving fairly slowly with HomeKit and Siri integration, this could serve as an opportunity to evangelize their platforms in the face of growing dominance of Alexa’s voice assistant in the smart home.

If you want to hear the head of Kenmore innovation, Chris McGugan, talk about this deal, make sure to not to miss the Smart Kitchen Summit. Just use the discount code SPOON to get 25% off of tickets.