Has Time Run Out for Sears? (Craig Douglass On Consumers)

Time is a funny thing. A lot can happen … over time. Take for instance a certain watch seller, a purveyor of timepieces.

The year was 1886. R.W. Sears, Richard to acquaintances, decided to purchase from a Chicago jewelry store a recent shipment of apparently unwanted gold watches. He sold them. All of them. And, over time, bought and sold many more with the assistance of a local watchmaker, Alvah C. Roebuck. Out of this seeming happenstance, Sears, Roebuck & Co. was born.

You know the gist of the story: Sears, Roebuck went on to create one of the largest mail-order catalog businesses in the world (the 535-page catalog was once referred to as the “Consumer’s Bible”), eventually operated over 3,500 bricks-and-mortar department stores, and umbrellaed such well-known brands as Allstate, Kenmore, Penske, Discover Card, Craftsman, Dean Witter, Cheryl Tiegs and DieHard.

DieHard, indeed. In March, Sears Holdings executive leadership warned the markets that “… substantial doubt exists related to the company’s ability to continue as a going concern.” As one of the first publicly traded department stores in the country, Sears has lost over $10 billion over the past six years, erasing 84 percent of its market value. Sears Holdings includes Kmart.

You’re probably thinking, “What happened?” Followed by, “It must be Amazon!” Before jumping to that conclusion, it may be helpful to point out, as a recent online post from Investopedia did, that Sears named in its 2015 annual report Wal-Mart, Target, Kohl’s, J.C. Penney, Macy’s, Home Depot, Lowe’s, Best Buy and Amazon as its main competitors. A pretty heady group of challengers.

While Amazon continues to shake up the retail business category by introducing, educating and delivering a new way of shopping, providing a self-empowering experience to consumers, the above-mentioned competitors of Sears are adapting, adjusting. In fact, Wal-Mart alone reported a whopping 63 percent increase in first-quarter online sales. Evolution.

Let’s take an elementary view of the Sears problem.

As we recall, the last time Sears faced a major shift in business, it was in an attempt to broaden its appeal to a wider array of consumers. Rather than be known simply as an old-line catalog company, or the home of tires, tools and appliances (great appliances, I might add), Sears introduced and promoted a full line of name-brand and store-brand clothing. Remember “The Softer Side of Sears?” That was in the early 1990s. And was initially successful. “The Many Sides of Sears” followed that campaign. Uh-oh! Identity crisis?

It seems to us that the changing direction of Sears, not being known for doing a few things well but wanting to do all things well, perhaps caused it to lose its niche. Its brand identity. Maybe even its humility. Knowing where a product or service fits in relationship to consumer wants and needs, what they expect of it, can keep a brand humble. Consumers pigeonhole brands, and want them to perform in their particular space. “Where did you get that shirt?” she asked. “Same place I bought my tires,” he admitted. That doesn’t work in a traditional department store model.

Through mere observation, Sears may have not recognized what business it was in from the very beginning. The catalog business. Mail ordered. Delivered to your door. Sound familiar?

We’re sure there is an answer to this question: Why didn’t Sears become the first, or more successful, Amazon? The power of the Sears brand very well could have adopted and commanded the online sales model, returning to its roots and offering the broadest inventory of every product under the sun — online, and delivered directly to you. Just like it was done in 1888 with the first Sears catalog. The specific target audience then was the farmer.

It can’t be that simple. But remember, Kodak invented the digital camera and chose, for some reason, to stick with film.

Sears, in time, will be all but history. The real estate has value, but the business may be kaput. The Sears brand, however, could be of some use to someone, somewhere. Look for a smart marketer to pick up the brand one day soon. Perhaps specialize it. Or transform its remaining retail locations as an extension of a new online enterprise. Oh, someone else is already doing that? Damn you, Amazon!

Craig Douglass is an advertising agency owner, and marketing and research consultant. He is president of Craig Douglass Communications Inc. of Little Rock. Email him at Craig@CraigDouglass.com.