In fact, as the New York Times notes, the turnaround plan appears to be the same one Sears has been trying for years – close loss-making stores, sell off real estate and borrow more money from the company’s chairman, Edward S. Lampert.
What is missing from the plan, though, is vision.
As Alan Treadgold, a retail expert at PA Consulting told the Times, “You exit the stores that are not viable. You manage the debt. But it still leaves the fundamental question: What is the purpose of Sears?”
It’s all too easy to blame Amazon as the killer of Sears, as many observers are doing. And, while it’s true Amazon has revolutionised the retail space and redrawn customers’ expectations, it’s not the whole story behind Sears’ demise, as Digiday.com reports.
A string of dud management decisions helped, too; but mostly it was inaction in the face of a rapidly evolving retail sector, a lack of investment, and a focus on cost-cutting rather than improving revenue that were key reasons for the brand’s downfall.
In 2005, Sears had 2% of all US retail sales. It now accounts for less than 0.3%, according to the research firm Customer Growth Partners.
Steven Dennis, the CEO of retail consultancy SageBerry and former VP of corporate strategy at Sears, said that while other retailers like Walmart, Amazon and Target invested heavily in exclusive merchandise and private-label brands, Sears was writing off assets.
Failure to leverage the company’s online potential was another grave error, especially for a former catalogue company, which put Sears in a strong position to formulate data-driven strategies.
“The reality is that it never focused enough on the evolving needs of the modern customer,” Mary Beth Keelty, CMO at the agency PMX told Digiday.
“Companies that focus relentlessly on the customer are the ones that are thriving today. As opposed to taking a step back to assess the strategic changes that needed to happen around how to engage their existing and targeted customer base, the brand ultimately chose to make operational and financial modifications.”
Sourced from the New York Times, Digiday; additional content by WARC staff