Categories: Founder's Blog


Sam Bayer


Diagnosing Sears’ decline

Two articles about Sears crossed my desk a couple of weeks ago.   One of them, entitled “Sears Aims to Shake Up it’s Dated Image” was a happy story about how Sears is investing in merchandising their products to attract a younger audience…with hopes of arresting their revenue slide of recent years.  The other was a more sobering (and familiar) story entitled “Sears Learns That Merged-Channel Is All About Visibility.  And if Systems are Flawed, You Don’t Want That Stuff Visible“.

Two articles, same week, two entirely different views of how to arrest the corporate decline.  The first perspective believes that it’s all about merchandising.  The second stresses real time (and accurate) information as the key to customer services and, ultimately, profits. (Guess which I’m a fan of :-)  see my Kimono posts).

Now I know it’s really not an “either/or” situation here.  If you don’t carry the right products, present them the right way, make sure they’re in inventory, and if you don’t make it easy to find, buy and deliver them, then you don’t have a sustainable business.  You need to be right on both counts.  But if you’re in a turn around situation, which do you focus on first?  Systems that improve visibility and transactional efficiencies or merchandising that brings people in the stores but that you can’t execute on?

Which of these scenarios feels like they will have a bigger impact on the business?

From the “Sears Aims to Shake Up It’s Dated Image” article:

“…Sears is experimenting with a sleek, sophisticated look at a handful of stores, including at Woodfield Mall. Hot sellers like treadmills and the Kardashian Kollection, which used to be lost among the merchandise, have dedicated areas; the Kardashian clothes, for example, are placed at the entrance from the mall. Sales associates also are front and center, mingling with shoppers and offering to show them additional selections on iPads.

Mannequins are displayed with skateboards and bicycles. Likewise, items such as bras and panties that have always been shown separately are displayed together as coordinated outfits, much as a reader would see in a women’s magazine. Cashier stations are smaller and nestled into the prime real estate. The redesign is more akin to a modern boutique, sparser in what is displayed so that the customer isn’t overwhelmed…”

From the “…You Don’t Want That Stuff Visible” article:

“This sad tale started with a customer this month trying to buy a camera from Sears and opting to use in-store pickup. The system initially accepted the order, but then cancelled it because the item was no longer available. The customer then gave up on the store and asked to have the camera delivered.

In this instance, that didn’t help, but it did illustrate another system hole. The Web system issued a confirmation of shipment and it gave an expected delivery date.

The customer’s credit card was charged, but the item never arrived. Customer service then said it needed seven business days to research the status. Really? …

…The point is that 10 days after the order failed to arrive, Sears couldn’t even tell the customer whether the package had been shipped. This is all about visibility within the retailer. A Sears case manager was depending on a human reply from a warehouse manager to determine whether the order had been filled. Where’s the automation? And if the automation to support it is not in place, merged-channel is impossible. Or at least it shouldn’t be permitted.”

The good news here is that at least the Chairman of Sears Holdings has the right vision about what should happen, even if his operating staff are a long way off from delivering on it.  This is an excerpt from the Chairman’s May 17th, 2012 Letter to Stockholders:

“We have made great strides driven by significant investments in building the tools and processes to become a truly integrated retailer.  More and more of our members and customers are moving seamlessly between stores, online and mobile for their shopping and research needs.  We intend to make it easier and easier to shop across our Sears Holdings formats and channels so that it becomes second nature.  Just like learning a new skill where people start with curiosity, move to deliberate practice and ultimately move to doing it instinctively (like driving a car or hitting a golf ball), how people shop today is changing and it isn’t just the younger generation that is benefitting from iPads, Facebook, and online retail.  As the shopping and marketing tools become ubiquitous, easier to use and more integrated into our society, everybody’s lives are being impacted by them, young and old alike.  We intend for Sears Holdings to be one of the companies that best serves our members and customers across these platforms and helps them make the transformation seamlessly.”

Mr. Chairman, it isn’t “just the younger generation that is benefitting from iPads, Facebook, and online retail” indeed!  In fact, as our business can attest, it isn’t just the Business to Consumer channel that is being affected by these new expectations.  Business to Business eCommerce is now joining the parade in a big way.
That’s a good thing :-).
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