On Monday, October 15, Sears filed for Chapter 11 Bankruptcy protection, announced the shuttering of more than 140 stores and fired its CEO. None of these actions came as a surprise to anyone who has followed Sears recently. There will be many who attribute Sears’ woes to Amazon and other online etailers. That’s not the reason for Sears’ current predicament. In fact, Sears was Amazon before the Internet was even a pipe dream.
Sears is arguably one of the most innovative companies in retail history. As the Retail Doctor Bob Phibbs points out in a recent blog post, in the 1920s, Sears opened a new store on average every other business day. When a journalist asked President Franklin D. Roosevelt if he could send one book to the Soviet Union, his response was, “The Sears Catalog.”
Sears revolutionized retail, direct mail, merchandising, customer flow and store design due to corporate culture of innovation flowing through every fiber of the company’s DNA. Did you know that Sears introduced the Discover Card to help offer credit to catalog shoppers? Do you realize that when Sears started Allstate it was the first time consumers had the ability to buy insurance through direct-mail? Acquiring Dean Whitter and Coldwell Banker and combining those services along with Allstate gave Sears the ability to provide a wide range of services under one roof.
Sears had no equal when it came to training its sales professionals. Starting in the 1940s, Sears taught their sales professionals to always first promote the best in category. For example, if a customer wanted to purchase the least expensive Kenmore washing machine, Sears associates were taught to direct that customer to the most expensive Kenmore model and explain how much more functionality and benefits that the top-of-the-line offered. If the customer did not bite, the sales professional would then move to the next model down and explain what benefits would not be available at this price point and so on.
Customers could order merchandise through the catalog and pick up in store. Sound familiar? That was happening in the 1960s. In the 1980s, Sears used its own employees in ad campaigns to promote its new line of beauty products. That campaign was another first-to-market innovation.
What happened? Sears stopped innovating in the 1980s. For many BKBG members and their parents and grandparents, Sears was a staple. They knew that they could go to Sears and get what they needed at a fair price from a knowledgeable and helpful sales professional. Sears lost its’ focus. It forgot about what made it successful, resulting in many of its customers gravitating to Target, Walmart and Amazon.
Here are the lessons that Sears teaches:
Don't ever forget who your customers are and what they need. Sears offered to a wide swath of Americans the ability to acquire products that made their lives more fulfilling. Their sales professionals realized their primary role was to help customers obtain the good things life had to offer. At your next sales meeting, brainstorm with your team on approaches you can take to talk to your customer about how the products and services and end results of what you do improves their lives and provides access to the best things life has to offer.
Technology is a tool but not a complete solution. Sears tried equipping sales associates at 450 Sears and Kmart stores with iPads to help bridge the gap between online and in store sales, but technology and omni-channel purchasing opportunities are not substitutes for knowledgeable, friendly and professional sales associates.
Invest in your brand. Have you been to a Sears lately? If you have, most likely you were depressed when you left. Sears spent on average a paltry 91 cents per square foot in capital expenditures per store. Contrast that figure with Best Buy’s investment of $15.36 per square foot in the same time period. What impression does your showroom offer to someone who walks in the door for the first time?
Your marketing must reflect reality. Sears’ marketing was top shelf. It had its own YouTube channel that provided helpful information. However, when marketing drove customers to stores, a different portrait was painted. Consumers found too few sales professionals whose knowledge was not the best, too many discounts and too much merchandise that was out of stock.
The future of Sears remains tentative at best. You can take the lessons from Sears and make sure you don’t suffer a similar fate. Focus on your customers’ needs. Make sure your showroom and marketing reflect that brand that you want to project. Train your sale professionals to understand their role is to make their lives of their customers better.