Sears: The Next Retail Dodo Bird

Hello!


I'd like to thank ALL of you for the excellent feedback and the great conversation about my BMW post from last week.  Truly a good learning experience!  As you were prepping for your weekend, Sears made announcement late Friday about its Craftsman brand which it, and Chairman Eddie Lampert, hoped you wouldn't notice.  It was one of seemingly innocuous but rather ominous announcements last week:

1. 13 KMart stores and 8 Sears stores will be closing their doors this year; and
2. The DieHard brand was licensed to Schumacher Electric Corporation which will allow Schumacher to sell battery chargers among other items to retailers in the US and beyond; and
3. The Craftsman brand of products will be sold at Ace Hardware stores, first tools in a limited number of stores and then the entire line (lawnmowers, etc.) across the Ace store family; and
4. Sears Auto Centers will now be a franchisee business.

The reason why I'm writing about this is that I have a bit of a lapsed affinity to Sears, first as a shopper but then later as a business partner.  Many Gen Xers like myself remember the obligatory weekly or bi monthly trip to Sears: Dad would go straight to hardware while Mom would take us kids over to the apparel.  Of course we'd go to Sears for whatever we needed because that was a) part of the new immigrant experience and the place new immigrants got their first "charge" accounts and b) what everyone else did, too.  If we were lucky/well behaved, the trip to Sears included a stop at the candy section for some gummy fish or chocolate covered malted milk balls.  Many other people can remember the Christmas catalog and also how they purchased their Craftsman home kit via mail order.


It's been many years since Sears has been at the top of its game.  Kohl's and the big box stores have overthrown the monarch because customer needs have changed and, frankly, Sears dropped the ball long ago.  Hubris was maybe its first crime along with a smidge of "Emperor's New Clothes" but for a time, there was an appetite to fight however fainthearted and however poorly executed.  Sears purchased Lands' End for a mighty sum, created a Lands' End store within a store and also purchased the Structure brand from Limited.  It tested new concepts (Grand and Essentials) after it accepted a "merger" (but really a takeover) with KMart, also ailing, as a strength in numbers play against Costco/Target/WalMart.  Speaking of the merger, it retained the Sears name in the parent corporation because its brand equity was greater than KMart.  Sadly, none of these activities have helped.  A post mortem as to why would fill a bunch of other posts.


Mother Sears' (my affectionate term) proprietary brands like Craftsman and DieHard (Kenmore and Toughskins) were reasons customers were happy to make a trip to Sears just like customers select WalMart's Great Value, Costco's Kirkland/Kirkland Signature and Target's Mossimo, etc.  The brands were part of the allure and draw into the store and they fed Mother Sears' brand equity.  You could step in wanting to buy Craftsman but may step out with a tool and something else.  Sears was the only place you could purchase those items which made a stop there de rigeur on the weekends.

In other words, Sears was as ubiquitous as Costco, Target and WalMart now and, like those stores, was part of the fabric of everyday life: the ultimate one stop shopping destination for the growing American family.  It wasn't due to lack of choice: one certainly could have shopped at other stores: Ward's (now defunct), Penney's, etc.  It was the #1 choice because Sears represented value for dollars spent and customer service.  Customers felt smart when they shopped at Sears and, sometimes more importantly, they felt secure.  There was comfort in knowing that Sears would answer questions or accept a return no matter how old the original purchase was.  I can't begin to tell you how many times I heard in focus groups about someone buying a Craftsman tool second hand and then going straight to Sears to exchange it for a new one.  Rather unethical but oddly, it engendered loyalty and many repeat shopping trips for Craftsman, Kenmore and other Sears branded products.  Sears had the ultimate of halo effects.

All of these recent moves remind me of Dylan Thomas' famous poem that begged us to not "go gentle into that good night" from high school English.  The worst fears of many have been confirmed: that Sears is going gently into that good night.  There is now no good reason to shop at Sears because its brands which made it a shopping destination have been diluted.  It has told WalMart and Target that they have won.  There is now no hope of me cross shopping (hardlines to softlines and vice versa) because I can go to Ace for a Craftsman hammer instead.  Kenmore is likely next of its other brands to be monetized in as many ways as possible because the brick and mortar essence of Mother Sears is a lost cause.  It's conceivable that leases will no longer be renewed resulting in more store closures and when commercial real estate turns around, owned properties may be sold to the highest bidder.

Sears' likely extinction is the reality of capitalism (and a nasty recession) but Sears only has itself to blame.  It "is what it is" but it doesn't stop it from being rather bittersweet especially for those of us whose backs were clothed and whose houses were built thanks to Mother Sears.

Send me your thoughts...

Best,

Parissa Behnia

parissa321@gmail.com

www.linkedin.com/in/behnia