Fears for Sears: Lessons from a Dying Brand
Ah, Christmas! It’s a magical time of year for family, tradition and gift-giving! And with an estimated $465.5 Billion spent (in November & December) on holiday gifts this past year, Christmas also serves as a significant barometer for the economy and the success of retail companies everywhere. Although sales were predicted to increase over 2% from 2010, not every store experienced growth. One retail outlet in particular…
While listening to the radio this morning, I heard this statement,
“There’s no reason to go to Sears.”
That’s not exactly the kind of statement any retailer wants to hear, right? Especially when it comes from retail analyst Brian Sozzi, who also commented that “It (Sears) offers a depressing shopping experience and uncompetitive prices.” OUCH! This is what Sozzi and many others are pointing to as the reason why Sears Holdings Corp announced today its decision to close anywhere from 100-120 stores this year.
It’s strange don’t you think? Here’s a company with roots that go back to 1888, built upon a reputation for offering quality products, competitive prices and priding itself on consumer satisfaction. Sears grew as a direct result of their willingness to innovate and adapt to mail order catalog sales. Yet some might conclude that it’s impossible for a company to last over a century and still see growth!
But what about Macy’s? Here’s a store which dates itself back to 1850, yet I’m sure at least a few of the boxes or bags under your Christmas tree were purchased from this retail giant!
So what can we learn from all of this?
Lesson #1 Don’t Forget to Take Care of the Goose
I’m sure all of us remember “The Goose that Laid the Golden Egg?” It’s a classic story about a poor husband and wife that find themselves owning a goose that lays a golden egg each day. They figure that there must be a stockpile of gold inside of the goose, so they decide to kill it and open it up in order to retrieve all the gold at once. Unfortunately, they end up discovering that there was no gold inside of their goose. This action completely cut them off from their daily gold supply.
What does this have to do with the 120-stores-less Sears?
Simple, Sears forgot to take care of the Goose! Unknown to most was the desire of Sears’ leadership to operate more as a hedge fund than a retailer. This focus diverted a substantial amount of funds that would have gone into things like renovation and advertising, but instead were placed into non-retail investments. Slowly but surely, this golden goose began to starve as it was being neglected.
There really is no such thing as a “sure thing” is there? Creating a business and brand is not like cooking with a crock pot where you can “set it and forget it.” It requires continual vision, objectives and supervision – which actually goes for anything in life. Anything of value in life requires that we do NOT take it for granted and give it the proper care it deserves. I thought I’d make a list of a few other things that can benefit from this principal: Health, relationships, our top clients, retirement accounts, gardens…and of course your Businesses!!
Lesson #2 Name your Goose
Correct me if I’m wrong, but I don’t remember the goose having a name in this bed time story. I’ve just always known the goose to be called “The Goose that laid the golden eggs.” The point I’m trying to make here is that both this goose and Sears did not have an identity. Sure the goose laid eggs of gold, but who was this goose? Apparently there was no connection, who knows, he (or she) might have lived longer if it was named – just a thought.
The same goes for Sears. Who is Sears? What makes them stand out? When I think of Walmart I think of a wide variety of products at extremely low prices. When I think of Target I think of quality clothing, toys, electronics and even food. But what do I think of when I hear Sears? Hmm.. I think of tires and screwdrivers. Not exactly the kind of place I want to browse around, in fact I can’t even remember the last time I’ve been into a Sears.
Now here’s the thing, I’m sure I’m wrong. I’m sure Sears has a lot more than tires and screwdrivers to offer, but how would I know? Why waste my time on a store that has not taken the time, money and vision to give me a clear picture of their identity? I and millions of others don’t have time to waste on a No Identity retail store.
The same goes for you and your goose (aka your business). Do you have an identity? If I were to survey 10 of your past clients/customers would there be a common theme to way they would describe your position in the market place?
Lesson #3: Remember the Customer Experience
Sears also neglected to improve upon the Customer Experience. In fact, while Macy’s spent $505 million to improve it’s stores & those of Bloomingdale’s last year, Sears only spent $441 million, despite having more than three times as many stores. Analyst Gary Balter was even quoted as saying, “Sears is effectively asking customers to pay for a poorer shopping environment.”
Ironically, the numbers are showing a dramatic increase in online shopping this year. It was estimated that 90% of consumers used the Internet is some way to research, review or purchase gifts this holiday season. 58% of Smart Phone users admitted to visiting “offline” retail stores to survey products before finding better deals online. Did Sears give people a reason to visit their store this year? I guess not!
Even if your business is 100% virtual, the experience you deliver for your customer needs to be nothing short of remarkable. How can you make doing business with you more fun, enjoyable, effortless and exciting?
That’s all I’ve got to say on my end, but I’d love to hear your feedback about what lessons you think we learn from this as well as why you personally think the Sears brand lacks identity…or does it? Let’s get a conversation going.