6 Retail Lessons From The Collapse Of Sears

by | Oct 22, 2018

According to an article by USA Today, published in June of this year, Sears stores across the nation are in a state of decay, the parking lots virtually empty. The retailer’s struggles could worsen still before it reaches the point that many analysts predict will be its destiny: going out of business.

How does a company that was once “America’s most famous retailer” continue to lose ground so acutely?

With Sears stores closing across the country, here are 6 retail lessons you can apply to your store so that you don’t make the same mistakes.

1. Don’t Forget to Focus on the Customer

In an article by The Retail Doctor, Bob Phibbs commented, “The foundation of [the Sears] culture was built on customers’ aspirations and their desire at having the good things in life. Their salespeople were there to help them achieve it.”

“Focusing on the customer makes a company more resilient.”

Source: Jeff Bezos via Ameyo

Sadly, the sentiment didn’t last. Over the years, the number of employees per Sears location was halved. Registers were moved closer to the doors, and employees were instructed NOT to leave their posts. Needless to say, customer service went out the doors—right along with the shoppers.

One of the valuable retail lessons store owners can learn comes from human resource specialist, Robert Half, who wisely said, “When the customer comes first, the customer will last.”

2. Technology Should Enhance Customer Service, Not Replace It

In an effort to improve the customer experience, Sears implemented the social shopping site, Shop Your Way, to encourage people to shop with them. Additionally, they placed iPads in nearly 450 Sears and Kmart stores to aid associates in bridging online and offline.

That’s all fine and good. But while technology is a great tool for enhancing customer service, it’s no substitute for knowledgeable, friendly store associates who have the capacity to humanize and personalize shopping experiences.

There’s no question that technology has upgraded the in-store experience, closing the gap between traditional and online shopping. But technology won’t save retail stores on its own. One of the important retail lessons is well-trained, customer-oriented employees are still necessary for providing today’s shopper with an enjoyable and meaningful in-store experience.

3. The Physical Condition of Retail Stores Matters

Way back when Sears built their Glendale, California store from the inside out in 1935, it was a groundbreaking approach that had the shopping experience at its core. It featured all of the best elements a store could offer, including a floor layout that allowed for customer flow, and strategic space for merchandise lines and width of aisles. They were constantly innovating and improving.

But that was then. Here’s what Stacey Widlitz, president of SW Retail Advisors, has to say about the current state of Sears stores:.

“If you go into any Sears, physically they look like 1982. So as a customer you’re thinking, ‘This is not a place I’m coming back to.’”

Source: USA Today

While Sears stores have fallen into disrepair, competitors like Best Buy, have invested hundreds of millions of dollars into store upgrades and critical information technology systems. Today, the electronics retailer is a vibrant physical retailer immersed in the digital age.

“A clean store with a beautiful appearance will lead to greater sales solely based off of a great first impression. When customers enter a disheveled, gross and unorganized store, their first impression equates to, ‘I’m not spending my money here!'”

Source: Big Basket Co.

Another one of the important retail lessons is that the appearance of your store can directly affect the customer’s overall experience. Stores should be neat, tidy and updated to attract more customers and drive in-store sales.

4. Clever Marketing Doesn’t Make it True

Sears had a savvy marketing team create an altered reality of the brand in it’s “Softer Side of Sears” commercials, as well as this funny holiday commercial. Surprisingly, they even have a decent YouTube channel that has some good information.

What the brand doesn’t seem to understand, though, is that no amount of good marketing can compensate for too few employees in the store or more discounts, with too many out-of-stock products. Their feel-good commercials, with promises of all the great items customers can expect to find at the store, don’t really match what shoppers actually encounter when they get there.

This misrepresentation leads to feelings of betrayal for new and existing customers who will likely to go somewhere else for the same products or services, resulting in decreased business in the future.

5. Stock Shelves With Products Customers Want

The Retail Doctor cites a recent shopping trip to Sears where the shelves were stocked with boomboxes that played CDs and speakers that would only connect to iPhone 4s.

“When the market for items you once sold moves, your buying needs to not only change, but you must get out of that market.” 

Source: The Retail Doctor

Retailers need to keep a consistent supply of products that solve customer problems and meet their needs. That means they must know who their customers are and keep up with trending products they’ll actually want. When retailers fail to recognize customer desires, they run the risk of stocking goods that simply sit on the shelves.

6. Don’t Ignore Existing Customers

Sears was once known for the Diehard, Craftsman and Kenmore brands it carried, catering mostly to men who were shopping for home-building products.

But the brand made a major shift in the 1980’s with the “Softer Side of Sears” campaign, attempting to change up their customer base and attract more women. It didn’t really seem to fit the strong association Sears had with appliances and tools, and women continued to shop at other retailers for their apparel needs.

“It is always better – and far less expensive – to go after more of the people who already resonate with your brand rather than try to go after an entirely new one,” advises The Retail Doctor.

Retailers need to make sure they’re not neglecting existing customers who already contribute revenue to their business!

Conclusion For Finding Retail Lessons

“Sears wasn’t always a zombie retailer,” says The Retail Doctor. “They had the distribution network, vendor relations, brick and mortar stores, catalogs, relationships with vendors and most of all, a sweet space in the hearts of their loyal customers.”

Where once the foundation of the Sears culture was built upon the aspirations of their customers and how to help them acquire the good things in life through their store’s products and services, today the retailer is headed for what some analysts feel is an inevitable demise.

The six tips above will help retailers steer clear of the struggles Sears is experiencing and ensure that their businesses stay relevant and in demand for years to come.

For more tips and retail lessons on growing your retail business, visit Rain Retail Software.