As of this writing stock prices at Amazon sit at $1003 each. A far cry from 1997’s $1.74. Meanwhile in the the US, Sears Roebuck’s shares have dropped from $192 in 2002 to today’s $6.47.
In its heyday, Sears was Amazon. The company got its start in the late 19th century as a mail order catalogue and through innovation, ever-increasing access to cheaper manufactured goods and what was then seen as cutting-edge promotions, the company grew much so that by the early 1900’s it would dominate the mail order business. Swap out a catalogue for a website, mail order for e-commerce, cheap manufacturing for well, cheap manufacturing and promotions for again, promotions (and up-selling algorhythms) and you have the Amazon of the first half of the 20th century.
By the mid 1920’s Sears had expanded into brick and mortar stores that attracted customers particularly home owners, in droves. Sears dominated Christmas its catalogue acting as a treasure map for kids no matter if the final purchase was made via mail-order or at the store. Parents did the back-to-school shopping in stores, couples called Sears the go-to for bulletproof Kenmore appliances and men wandered weekend aisles to load up on lifetime guaranteed Craftsman Tools. Again mirroring online shopping, the Sears catalogue acted as an easy at-home guide to almost any retail or online…make that, mail-order purchase. Today Google might even refer to what Sears customers started doing with their catalogues starting in 1921 as the consideration phase of a buyer’s journey.
Think about Amazon’s venture into bricks and mortar with Whole Foods and you could say that history is repeating itself. But for Sears, that is of small consolation. Today Sears Canada announced over 2900 layoffs and 59 store closures.
Failure is probably as instructive as success. As Sears stock plummets and Sears Canada seeks protection from creditors we can spot at least one or two of the decisions that may have set the doomsday clock on this once venerated brand as far back as the 1980’s.
Sears and its mall-anchoring department store brethren have missed the fact that today, more than at any time, you can’t be everything unless you are best at everything.
Interestingly, Sears is best at something. If you were handed the keys to Sears today, I’d recommend that you get out of the mass retail business right now and go into to the Kenmore and Craftsman business. Better yet, get a time machine and go back and do it 5 years ago. These are the jewels in the brand’s crown and for good reason; each represents a somewhat unassailable competitive point of difference. Sears is best-in-class at consumer level appliances and tools. Kenmore Appliances are still known as the name for a definitively durable product in the mid-level market. Kenmore has a niche. Craftsman tools, with their lifetime warranty, one that requires no date or proof of purchase, come with an inherent assurance that they are the best tools on the market for the weekend DIY warrior.
Being great at one thing on a retail level does not translate into being great at everything else but in the heyday of the department store that didn’t seem to matter much. But Sears always had a problem, let’s call it a negative brand halo. Kenmore appliances and Craftsman tools make strange bedfellows with any kind of fashion, fashion being a perennial department store mainstay. For the simple fact that Dad liked going to Sears for new wrenches, the stores could never be seen as a place where, to borrow a fashion icon from the era where all this started to go sideways, Madonna could be conceived of to buy a pointy bra. Sears didn’t seem to get it, and created its own house clothing lines, shoes and home décor with the same house-brand enthusiasm that applied to Craftsman and Kenmore. Only in this case, it was hard to land on any kind of point of difference except price – and price only served to prove the point that anything that wasn’t an appliance or a tool at Sears was crap. Embarrassing crap with an unfortunate halo that splattered itself on good and bad house brands in equal proportion.
Certainly the stores sold brands that were not of the house variety but failed to attract any outside halo brands. This comes at no surprise given that any self-respecting fashion brand would quake in its Gucci at the notion of associating itself with what Sears was putting on the floor in women’s, children’s, men’s and (shriek!) teen wear.
Sears became so aggressively uncool that when on break, staff would remove any evidence of being employed by that lonely place at the end of the mall. When that happens, start writing the epitaph.
There are few, if any department stores left in North America that are thriving and in a year where retailers are closing stores at a rate that is faster than any year of the great depression, Sears can be forgiven for sinking with a dropping tide. It’s just that, with its two venerated house brands and its pioneering innovations of yesteryear, we won’t miss it, until we do.