Monday, April 30, 2012

Can Sears Survive?

A recent Crain's Chicago Business headline is a stark reminder that no marketing success lasts forever. "Sears -- Where America Shopped" uses the past tense because so many people have turned to other stores and online retailers rather than buying from Sears or Kmart or their sites.

Sears catalogs were once direct-mail powerhouses, reaching into millions of U.S. households with much-needed merchandise variety and reasonable prices. Sears was a proven anchor in shopping centers coast to coast, and its credit card was in wallets all over America. Those glory days are gone.

In an effort to cut costs, Sears has begun closing dozens of "underperforming" stores, leaving places like Anderson, Indiana and Jackson, Mississippi after decades in business. This is understandable, given the difficulty of turning these stores around while the economy isn't yet strong AND the intense competition from discounters and specialty stores with profit-sapping price wars on some popular items.

Now Sears is trying to license the core brands for which it is so well known: Craftsman, DieHard, and Kenmore. If this happens, it's likely that the essence of those brands will be diluted. Will consumers still know what the brands stand for? Will they believe that licensed products have the same quality as the original brands? Will the brands keep a quality halo over Sears itself once they begin appearing on non-Sears products?

To raise money, Sears is also said to be trying to sell its Lands' End unit, which might mean the end of Lands' End boutiques inside Sears stores. Meanwhile, a new Scrubology boutique (above) is gaining ground within Sears stores. Will it help Sears attract a new generation of shoppers--before the retailer has to close hundreds more stores?

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