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RIP Sears

There is a group on Facebook for people who grew up in Jackson, MI. The posts are mostly, “Who remembers …?” so that former Jacksonians can reminisce about days long past. A recent post was about Toy House. A couple hundred people waxed nostalgic about visiting the original store in the 50’s and 60’s.

Several people mentioned the Catalog Sale, something my grandfather started early on.

The Catalog Sale was a two-weekend sale, once in October, once in November, where people brought in their catalogs and we matched the catalog price on any toy we had in stock. Our goal was to keep the sales in town.

The Sears Catalog

The most common catalog was the Sears Christmas Wishbook.

We ended the Catalog Sale in the early 1980’s when it turned out our prices were usually sharper than the catalogs at that time. The event was no longer a draw. By 1993 even Sears had stopped producing their catalog.

Times change. Retail shifts. Today Sears has filed bankruptcy.

Sears was Amazon before Amazon with their mail-order catalog business that allowed you to buy almost anything you could imagine from the comfort of your own home.

Sears was Walmart before Walmart when they dominated the retail landscape in the 1940’s and 50’s by offering a wide variety of merchandise at low prices. By 1969 Sears was the largest retailer in America with a larger market share of categories like home appliances than any retailer has ever had since. Four years later they completed construction on the tallest building in the world.

Sears also was a pioneer in retail, with legendary sales training, teaching their sales staff how to upsell and not sell from their own pocketbook. They were taught how to sell on features and benefits. They had their own credit card (which eventually became the Discover Card). They had their own insurance agency (which became AllState). 

Today they filed bankruptcy.

The easy blame is going to be Amazon and Walmart. Amazon out-Searsed Sears in the mail-order business. Walmart out-Searsed Sears in the commodity goods business.

Yet when was the last time you truly thought of Sears as a convenience-based place to buy goods? They dropped their catalog back in 1992, two years before Amazon launched.

And with well-known economy brands like Kenmore, Craftsman, and Diehard, tons of cash, and superior vendor relationships, Sears was well-positioned to destroy Walmart in the race to the bottom. Yet they dropped faster than a greased baton at the blind relays. 

So what happened?

The answer is quite simple. Sears got away from their competitive advantages and Core Values. Convenience and Commodity Brands were only two of them. The one I believe they truly missed was their sales training.

When was the last time you were blown away by the customer service at Sears?

Toys R Us got away from their Core Values in 1992 when Walmart surpassed them in total toy sales. Sears did the same thing over the years as they gave up the advantages that brought them to the table.

There are several (contradictory?) lessons in all of this.

  • Retail is always changing.
  • New competitors will try to beat you at your own game.
  • Stick to what you do best.
  • Don’t give up your advantages.
  • Adapt or die.
  • Stay true to your Values.

We’ll explore these concepts over the next few days and try to learn from their mistakes.

-Phil Wrzesinski
www.PhilsForum.com

PS It is never a good day when a legacy retailer such as Sears files bankruptcy. If we don’t learn from their mistakes, though, then we’re likely to make the same ones ourselves. As I’ve always said, Retail is not Rocket Science. Rocket Science is actually math for which you can solve all the variables. Retail has variables and equations that never fully resolve. The lessons, though, are fascinating.

4 comments

  1. We built our home in 2005. I bought every appliance at Sears because the salesman there was so awesome – all but two items are different brands because he told me “Not every brand is the best at making each item you want to buy. Buy the best item, not the brand.”
    We lived quite a way from their store, yet they delivered it all for free and with a discount on the product for buying it all there.
    Compare that to the experience I had at the local “Sears” appliance store in our town. We went and priced the same items there and then they wanted to charge us $50 PER ITEM to deliver it. Apparently they are some kind of franchisee….if this is how all the franchises operated, I can see why they have issues with public perception of “service.” Later, this store got in trouble with corporate for skimming something or another…not sure what all happened…
    Still, sad to see this once great chain go down. Not surprised…just sad.

    • Phil Wrzesinski says:

      Donna, you bring up an interesting question whether franchises received the same training resources as company-owned stores. Also, the big risk with franchises is the ethics and abilities of the franchise owner. A good owner can take a franchise to levels even greater than the company. A bad one, however …

  2. Sears was our family’s life. When I was small in Des Moines, my Dad worked for the trucking company that delivered their goods from nylons to appliances and furniture. When my family moved to California and my mother had to go to work, it was Sears that she worked for. She worked in the baby clothes department for years. Then she transferred to the Catalog Dept and for many years took orders. When I got married my mother-in-law happened to be a cashier for Sears. In the 70’s I needed a part time job and went to work for the local Sears store. My mother’s work in Sears earned many shares of Sears stock. I had even some of my own when I graduated from college and went on to another job. When mom died, Dad inherited her stock which paid a comfortable dividend each quarter. After my Dad’s death, my brother let me take the stock and I received the dividend until it was decided that dividends wouldn’t be paid any more. The saddest thing was when the holder of Kmart bought Sears and decided in the transition that Kmart shares would be changed to one-to -one but Sears stock was only going to be exchanged 2 Sears for one Kmart. Not long after that the quarterly dividends were dropped for Sears retires. It has been sad to watch the demise of Sears. There came a time a few years back I sold what stock I had (the value was decreasing even then) and shared the amount left with my brother. That was the end of our story. We went from being a faithful Sears customer, with a love of the catalog and home goods and tools to one that hardly darkened the doors of the store.

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