Off-roading In A Minivan - How SEARS Got Stuck In The Mud

There's a rising sentiment these days - brick and mortar retailers are on life support. Slowly being strangled by the likes of Amazon and other online mega-retailers.

How could they not be?

With such low overhead costs, it's impossible for traditional stores to compete on price. Let alone the convenience of any time shopping and free shipping.

SEARS is the latest casualty in the battle.

Back in May, the company announced plans to close 60 stores (with another 40 on the chopping block). That's in addition to the hundreds they'd already shuttered in the last few years.

The news last week was even worse - teetering on the edge of bankruptcy.

Makes you wonder if there's any hope for the beleaguered retailer.

Maybe. Maybe not.

Yet, if nothing else, SEARS' downfall provides a great lesson in brand positioning for an ever-changing economy.

THE SEARS OF YESTERDAY

Growing up included many family visits to SEARS. My dad loved Craftsman tools. Not only for the price but the lifetime guarantee as well.

I remember him breaking a few ratchets working on our vehicles (without worry). Knowing he could take 'em back and get new ones in exchange - no questions asked.

As for me and my brother - we loved jumping on the shiny new riding mowers and doing our best NASCAR impressions.

And my mom. Well, I think she just enjoyed roaming the aisles and having a few moments to herself. Taking a trip to SEARS was an experience the whole family could enjoy.

A little something for everyone.

MAKING A HARD-RIGHT TURN

Fast forward a couple decades later and things have changed. Last time I stepped foot into a SEARS, the landscape was decidedly different.

Rack upon rack of clothes, housewares, and handbags.

A paltry section of sporting goods and kids' toys.

Exercise equipment and outdoor furniture.

And the crown jewel..A FULLY-STOCKED NURSERY DEPARTMENT. Teeming with half-dead flowers, plants, and ornamental trees.

What a sight.

But, I paused to ask myself, "Who goes to SEARS to buy flowers?"

Nobody.

I came to see Craftsman lawn mowers. Kenmore appliances. And to grab a new cordless drill. Yet, those were the items in smallest supply.

LOSING FOCUS

Hard to believe, but SEARS was once the country's largest retailer. A major employer with nearly 355,000 workers on the payroll.

Nowadays, Walmart and Target have gobbled up the majority of their market share. Employees are leaving in droves and personnel numbers have dwindled to less than 89,000.

With no relief in sight.

So, what happened to "The Everything Store?" How did they fall so far so fast?

While there were many questionable decisions from the top, two stand out more than others. One of which is losing focus.

In every business, there are a core group of products or services that define you.

For SEARS, that cornerstone was their Craftsman tools and Kenmore appliances. Prized for value and reliability, they were household names for generations.

But as times got tough, the company lost their way. Instead of infusing more life into their bread and butter products, SEARS did the opposite.

Choosing to open mega stores with garden centers, aisles of cheap electronics, and eclectic arrays of housewares and nick-knacks.

The company took a gamble - assuming they knew better what their customers wanted than the shoppers themselves did. But that's not how it works.

In business, it's normal to venture out and see if you can expand your reach. But NEVER AT THE EXPENSE OF SACRIFICING YOUR CORE OFFER.

Years ago, my friend John Corcoran gave me a simple piece of business advice that stuck with me - "Double down on what's working (and ignore the rest)."

SEARS tried to compete with Home Depot, Best Buy, and other specialty retailers who had already cornered these market niches. Throwing money into a fight they had no chance of winning.

Decades ago, surviving as an "everything under one roof" brand was possible. But not anymore. Unless your name is Amazon or Walmart.

Nowadays, specialization is how you play the game. Picking one or two things you do best and going "all in" on them.

For example, perhaps you're great at sales but you hate writing content.

Solution: don't write content.

Find someone who excels in this area and hire them to do it. The same applies to marketing, design, or any other business service. The best (and easiest) way to grow your brand is by doubling down on your strengths.

And outsourcing everything else.

UNDERSTANDING (AND RESPONDING) TO THE MARKET

If there's another area where SEARS ran off track, it had to be their marketing strategy.

Which is ironic. For in the early days, they were one of the most innovative in their field. Sending mail-order catalogs to rural customers - giving product access only city-dwellers had previously enjoyed.

The books became so ingrained in American culture, SEARS catalogs were used as propaganda pieces (by both sides) in several world wars.

SEARS marketing strategy was years ahead of its time and provided the catalyst for unprecedented growth. Yet, as the saying goes, all good things must come to an end.

Internet shopping emerged in 1994 and by 1995 e-commerce giant Amazon had already set up shop. At first, businesses and consumers alike were tepid about internet transactions. But in just a few short years, online storefronts were the new standard.

But SEARS never got the memo.

Dabbling a bit in e-commerce, the mega-retailer never took it seriously. Instead, choosing to prop up and expand their retail locations (which no one was visiting in the first place).

Even worse, SEARS expanded into markets completely unrelated to the brand - real estate, stock brokerage firms, and consumer credit cards. Once again moving further away from their core offerings and ignoring marketplace trends.

By the time they realized the importance of the web, it was too late. Their window of opportunity was gone - along with their revenues.

In business, keeping your finger on the market pulse is vital. You must recognize shifts in consumer behavior and respond quickly. Whether it be expanding your online storefront, upgrading your services, or improving your content.

Remaining nimble is paramount in business.

SEARS wasn't.

CONCLUSION

When the economy tanked in the late 2000s, companies deemed "too big to fail" got handouts from the government. A decade prior, SEARS would have fallen into that same category.

Their story underlines the importance of knowing your value in the marketplace. Figuring out who it is that you serve and in what capacity. And never losing sight of the core elements that define your brand.

At the same time, responding quickly to customer demand and the competitive landscape. However, without cannibalizing what's already working. For this is the only way to remain viable (and profitable) in our digital economy.

Doing anything less is like off-roading in a minivan. You might be OK for a while - but sooner or later - you're gonna get stuck.

What do you think SEARS could have done differently to right the ship? Leave a comment and let us know.