One of the great unanswered questions of American business...how could they miss? Someone invented moving pictures, porn struck immediately...the Wright brothers flew their junkie little kite, in no time, people were dropping bombs...the internet came along and Sears did...nothing...too busy laughing at Montgomery Wards, I guess.
AHC: Save Sears
- Thread starter Johnrankins
- Start date
An earlier POD would help but I didn't want to make it too easy and enable people to use too much 20/20 hindsight. Even the best companies will make mistakes.
1. True, complacency is almost always a problem with long established companies and that was certainly true of Sears.
2. Certainly stay away from Kmart. Merging two declining companies together just makes one giant declining company. It did nothing for Sears and just added to its debt. Even at the time I wondered why would they even think of merging with Kmart?
3. Yes, it should have gotten onto the internet sooner and made everything it sold available for purchase on it. Although Site-to-Store is a good model that is 20/20 hindsight. Maybe after Walmart established it and it looked like it was going to work.
4. Definitely, a store that looks like it comes out of 1955 is going to do well only with older customers. You can't expect a new generation of customers to go to a store that looks like where there parents and grandparents shop and eventually the old generation die off.
Lampart was certainly an anchor for Sears. Him not buying the company is a great help.
1) Yeah, Lampert was definitely an anchor. I don';t know if there are other companies he could run well but retail stores are clearly not it.
2) More importantly product lines. If something is no longer profitable for you get rid of it. I doubt clothes were a big money maker for Sears. Assuming that was true don't sell clothing.
3)Yep, Walmart already had that market. They couldn't dream of competing in the Walmart niche.
4) Assuming that they were really selling them in Sears in the first place. If Sears weren't competitive in electronics than dumping them wasn't a bad idea. You can't be competitive in everything.
5) An old and established company beating Amazon to the punch is unrealistic. Even so it should have went on the internet sooner and in a big way.
Carl,
The internet didn't go live until 1991, so in '88 it was still a DARPA idea.
Sears problem was they created a niche for the mid-to-upscale, beating the likes of Macy’s, Kaufmann’s and JC Penny, and Americans (and Canadians for that matter) were largely headed for discounters. Their house brands were good (Kenmore, Craftsman, Die Hard) but their every-day was nondescript. If women can get housewares with Martha Stewart's name on them, and clothes with Jacqueline Smith or Kathy Ireland from Kmart, what do I need a Sears for?
Women's apparel is a huge money maker. It's meant to be profitable even at a sale price. Sears had little to nothing to draw women into its stores. And Brand Loyalty can go extinct in a generation.
When Walmart became the number one store in America, they passed both Kmart and Sears. The previous year, Sears was number 1, Kmart was number 2 and Wally World was number 3. The next year, Walmart was number 1, Kmart was number 2 and Sears was number 3. And Kmart at the time was gunning for Sears, they were bringing in things like furniture and office equipment to compete with Sears. Walmart was gunning for Kmart the entire time; they knew exactly who to beat.
Walmart passed Kmart in women's apparel sales when they had several hundred fewer stores than Kmart. Sam Walton was no dummy; one of the ways he did this was he laid out his stores with the women's apparel between the entrance and the Crafts department. Who does crafts? Women, and Sam forced them to walk through his apparel to get to their hobby. At the time, Kmart was trying to get away from Crafts, and reducing the SKUs ("skews" - Stock Keeping Units) in the department. And besides, it was over by domestics, not apparel. Sears had little to no crafts items to speak of.
As for Amazon, let's not forget that company HEMORRHAGED cash for several years. See:
https://www.theatlas.com/charts/BJjuqbWLz
It took Amazon YEARS to turn a profit. So I don’t see jumping on the internet retailer bandwagon early as saving the company. But I will say one thing that Amazon did while they were losing money like the Federal Government; they got people familiar with ordering stuff from Amazon, so maybe an early presence would similarly help Sears later.
And Sears did not merge with Kmart; they were purchased for 11b dollars. Kmart changed the name of the combined company to “Sears Holdings” and moved their headquarters from Troy, MI to Chicago. In my opinion this was the Pennsylvania Railroad and New York Central all over again; the PennCentral combined all of their weaknesses and none of their strengths. So too Kmart and Sears.
When I was in retail in the ‘90s, studies showed people treated Walmart like a convenience store, shopping there over 5 times a week on average. Target was a destination store, shopped barely over two times a week. Kmart was in between, nearly 3 times a week. Sears was (and is) a destination store; people don’t go to Sears for convenience, they go to Sears to GO TO SEARS.
Another problem for Sears is their stores are largely tied to malls, and malls are, have been for years, dying in America.
I thought their small hardware/appliance stores were an excellent concept, but as opposed to Dollar General, which is going everywhere Walmart is NOT, they still located in retail heavy spaces, plazas mostly but it did get the company name away from malls. I don’t know if they were profitable or not, but they should have been.
I don’t know if there is a recipe to save Sears, even now. They need increased traffic, which means increased sales, and I don’t know how you do that with stores tied to dying malls, and discounter retailers everywhere. Maybe going to stand alone stores in the 1980s would have helped, but brick and mortar isn’t exactly the shining path forward. And now that they’ve shed their house brands, I don’t know what draw they have left.
Lampert supposedly wants both companies to do more online business, but as a consequence, he was not spending any money on the stores themselves. Many are in disrepair.
And online retailers need to be thorough. I recently bought a fridge from a local appliance store. Good price, and I was able to see and measure the thing to make sure it would fit the space. I was also recently looking to replace a Craftsman staple gun. Two of them were on Sears’ website, no measurements nor guidance on which gun used which size staples. So I did not make a purchase. Maybe I’ll go to Lowe’s and find a match someday. But a lack of detail cost Sears a sale.
The bottom line for Sears is capital goes where it’s treated best. To Tonrich’s point, Sears customers thought their capital wasn’t being treated best at Sears.
My thoughts,
The internet didn't go live until 1991, so in '88 it was still a DARPA idea.
Sears problem was they created a niche for the mid-to-upscale, beating the likes of Macy’s, Kaufmann’s and JC Penny, and Americans (and Canadians for that matter) were largely headed for discounters. Their house brands were good (Kenmore, Craftsman, Die Hard) but their every-day was nondescript. If women can get housewares with Martha Stewart's name on them, and clothes with Jacqueline Smith or Kathy Ireland from Kmart, what do I need a Sears for?
Women's apparel is a huge money maker. It's meant to be profitable even at a sale price. Sears had little to nothing to draw women into its stores. And Brand Loyalty can go extinct in a generation.
When Walmart became the number one store in America, they passed both Kmart and Sears. The previous year, Sears was number 1, Kmart was number 2 and Wally World was number 3. The next year, Walmart was number 1, Kmart was number 2 and Sears was number 3. And Kmart at the time was gunning for Sears, they were bringing in things like furniture and office equipment to compete with Sears. Walmart was gunning for Kmart the entire time; they knew exactly who to beat.
Walmart passed Kmart in women's apparel sales when they had several hundred fewer stores than Kmart. Sam Walton was no dummy; one of the ways he did this was he laid out his stores with the women's apparel between the entrance and the Crafts department. Who does crafts? Women, and Sam forced them to walk through his apparel to get to their hobby. At the time, Kmart was trying to get away from Crafts, and reducing the SKUs ("skews" - Stock Keeping Units) in the department. And besides, it was over by domestics, not apparel. Sears had little to no crafts items to speak of.
As for Amazon, let's not forget that company HEMORRHAGED cash for several years. See:
https://www.theatlas.com/charts/BJjuqbWLz
It took Amazon YEARS to turn a profit. So I don’t see jumping on the internet retailer bandwagon early as saving the company. But I will say one thing that Amazon did while they were losing money like the Federal Government; they got people familiar with ordering stuff from Amazon, so maybe an early presence would similarly help Sears later.
And Sears did not merge with Kmart; they were purchased for 11b dollars. Kmart changed the name of the combined company to “Sears Holdings” and moved their headquarters from Troy, MI to Chicago. In my opinion this was the Pennsylvania Railroad and New York Central all over again; the PennCentral combined all of their weaknesses and none of their strengths. So too Kmart and Sears.
When I was in retail in the ‘90s, studies showed people treated Walmart like a convenience store, shopping there over 5 times a week on average. Target was a destination store, shopped barely over two times a week. Kmart was in between, nearly 3 times a week. Sears was (and is) a destination store; people don’t go to Sears for convenience, they go to Sears to GO TO SEARS.
Another problem for Sears is their stores are largely tied to malls, and malls are, have been for years, dying in America.
I thought their small hardware/appliance stores were an excellent concept, but as opposed to Dollar General, which is going everywhere Walmart is NOT, they still located in retail heavy spaces, plazas mostly but it did get the company name away from malls. I don’t know if they were profitable or not, but they should have been.
I don’t know if there is a recipe to save Sears, even now. They need increased traffic, which means increased sales, and I don’t know how you do that with stores tied to dying malls, and discounter retailers everywhere. Maybe going to stand alone stores in the 1980s would have helped, but brick and mortar isn’t exactly the shining path forward. And now that they’ve shed their house brands, I don’t know what draw they have left.
Lampert supposedly wants both companies to do more online business, but as a consequence, he was not spending any money on the stores themselves. Many are in disrepair.
And online retailers need to be thorough. I recently bought a fridge from a local appliance store. Good price, and I was able to see and measure the thing to make sure it would fit the space. I was also recently looking to replace a Craftsman staple gun. Two of them were on Sears’ website, no measurements nor guidance on which gun used which size staples. So I did not make a purchase. Maybe I’ll go to Lowe’s and find a match someday. But a lack of detail cost Sears a sale.
The bottom line for Sears is capital goes where it’s treated best. To Tonrich’s point, Sears customers thought their capital wasn’t being treated best at Sears.
My thoughts,
I agree about it being too late to save Sears now, it should be liquidated. It is better for everyone IMO. The debtors get paid off and the employees look for jobs now when there are jobs to be had rather than in a recession when they have to compete with everyone.
Bottom line I think Sears needed to update their decor and they needed to focus in on their core business which was tools, appliances and auto repair. Maybe add construction material such as lumber and auto parts Dump anything that isn't selling.
I worked in Sears for two weeks selling mattresses. The store was fine and they are the best performing store in the mid Atlantic(Bel Air MD). However there was some areas that were imploding aka electronics. Another Sears near me (White Marsh MD) stopped selling electronics altogether. Don't go in the Sears in York Pennsylvania. Extremely small and outdated. The Lancaster one is nicer.
Yeah, electronics is simply not its niche. It needed focus which is something Lampart seems to be bad at.
That seems to be the ultimate answer. Sears was Amazon before the Internet but for whatever reason they decided to totally abandon the delivery business model at the exact moment that it came roaring back to life.
They don't even need to beat anybody to it, Sears just needs to jump on the bandwagon. They have all the business and infrastructure to start serious home deliveries of virtually everything well before Amazon.
exactly, Amazon didn't kill Sears. Sears killed themselves and Amazon simply filled the gaping hole Sears left in a market that Americans have been shown to want for over a century.
In the mid 1990s have Sears start selling on line. They already have the delivery system in place , it wouldn't be to difficult.
A could become Amazon before Amazon was even an idea.
A lot of people seem to agree with me.
A could become Amazon before Amazon was even an idea.
A lot of people seem to agree with me.
And as online sales become more and more popular they can transition the stores into showrooms and distribution centers for their products.
That takes near 20/20 hindsight, It would be doing what almost no other big company was doing. In the '90s the big drivers on the internet was porn and theft.
But, they were doing it, or at least, they had built their rep on a version, the catalog store. Selling on the net doesn't take 20/20 vision, maybe only 20/40, to be viable. They missed the boat...it wasn't camouflaged or hiding, they just plain missed it!
Catalogs were mailed to regular customers' homes, ordering was on the phone. Others could go to nearest store and access catalog and order there. Delivery was by Post Office to home or order made it's way to nearest Sears store for pickup. Pretty straight forward. Whole process facilitated by Sears absolute returnability guarantee, which was a big deal in those days.
I knew about that but that had zip to do with the internet. The Sears Catalogs came out what? 1920 or so? To change from that model to the internet was far from obvious in the 1990s . It certainly had a lot of experience in mail deliveries , which would have helped, but it wasn't obvious yet. A lot of dot com companies went belly up during the 90s so it probably looked like not being the way to go.
The biggest problem Sears has right now is that there is no real reason to buy from Sears. The biggest mistake Lampert made (And he made a LOT of them!) was selling Craftsmen Tools and Kenmore.. What reason was there to buy from Sears after that?
Richard Sears first catalog was jewelry and watches in 1888. The Sears, Roebuck and Co catalog debuted 1893-94.
http://www.searsarchives.com/catalogs/history.htm
Early catalogs included kits for houses. The last time they offered automobiles was 1953-54, I think, a version of the Kaiser Model J....
The market was actually predicted in 1962 just watch an episode of The Jetsons.
They already have the delivery service going to a computer-based service would have actually made sense just for the cost of labor it would have saved.
I have a Sears catalog from 1907. They have basically everything that isn't perishable. Some of the language is hilarious. A teddy bear is a "Sensible and excellent toy". There are also cocaine teething drops for babies, that work in minutes.