Sears Offers More Than Discounts
Retailers are battling it out to see who
can be perceived as offering the biggest bargains, but Sears has decided
that while it needs to talk value, it simply isn’t going to win by trying
to out-discount the discounters.
Instead, the struggling department store
chain has chosen to promote unique initiatives, such as its layaway program
and a guarantee that its kids clothing will not wear out before the
child grows out of the duds. The latter program, known as Kidvantage, offers
to replace clothing free of charge should it become too holey or otherwise unwearable while
still fitting the child for whom it was purchased.
According to
an AdAge.com article, both the layaway program and Kidvantage give
Sears the means to eliminate "barriers
to shopping" while "differentiating itself from rivals at the
same time."
"We’ve
already put a stake in the ground when it comes to offering a wide assortment
of great brand names that are affordable," Craig Israel, senior VP-president
of Sears Apparel, told Ad Age. "No matter how reasonably priced
an item is, though, it has to stand up to the rigors of active kids or
there’s no cost savings for parents. It’s a program we see resonating more
and more with our customers during these difficult economic times."
Discussion Questions: What do you think of
Sears’ attempts to differentiate with its layaway and Kidvantage programs?
Are these initiatives that can be co-opted by others and used perhaps
more successfully than by Sears?
The KidVantage program sounds novel at first; however, your average generous return policy (ala Walmart) accomplishes pretty much the same thing. Another example of advantagewashing!
I just find it incredible that with all the smart people out there, and the brilliant consultants available, Sears hasn’t tapped into someone who can help bring them out of the retail wilderness. More than a single program, Sears needs a whole new brand identity strategy; and to stick with it more than a year.
Focusing on value makes sense to consumers, but are they still listening? It may be a good idea that is too late.
I so completely agree with Max Goldberg above! I cannot top that, Max! I am Radically Clear!
A little like GM and Chrysler: too little too late, enjoy Target and Walmart’s dust.
I am very pleased Sears has finally realized they cannot compete on price and must explore avenues to differentiation. And in this case, they appear to have recycled previously perceived and outmoded ideas here. I recall in my younger years my parents and their friends flocking to stores to layaway items on a frequent basis.
In the case of the Kidvantage program, guaranteeing the clothes will last at least as long as the kid can wear them is actually a good idea. My wife has had numerous occasions of returning items to both Walmart and Target because of poor quality. (To be fair there are other retailers that make my personal list here too, but Walmart and Target seem to be the main characters in the discussion.)
If any of you reading this can recall the guarantee the Craftsman brand has on their tools, you will notice this is a page taken from their playbook and repackaged for softlines.
I notice several have stated their dislike for Sears and wonder why it exists at all. The department store is still alive and well in many communities in the country. It has just evolved into various forms.
Look at Kohl’s, JCPenney, and others. They are still referred to as department stores, they just don’t fit the previous known definition. Sears happens to fit the traditional definition and is one of the last remaining chains of its kind around.
I would prefer to not have any other retailers go under, especially one the size of Sears-Kmart/SHC. They are in my backyard and if they did go under it would wreak havoc with thousands jobs lost in my area alone.
Then the effects upon the commercial real estate market, with over 2,000 properties opening up overnight, will be felt across the country in an explosive manner. This would inevitably guarantee Walmart and Target all of the discount business.
Remember economics 101. When all the competition is eliminated, those who remain have no incentive to show the lowest price or even a value at all. Why spend the money if you don’t need to?
I would ask my colleagues commenting upon this area to please be careful about what you wish for–you may just get it.
It’s amazing how quick everyone is to bash Sears–Kidvantage is a program the company implemented about 20 years ago. It’s not new. They designed it to be a loyalty program built on the back of a long-standing kids (as well as Craftsman tools, Diehard batteries, etc.) product guarantee. By dusting off and polishing existing programs like Kidvantage and layaway, Sears is trying to a.) create greater confidence in the brand and the purchase and b.) drive traffic into their stores. I actually applaud these efforts and believe the company should leverage the “guarantee” across all their categories. Make it something they can own–Lands’ End has an unconditional one; Craftsman has a lifetime one. Sears should codify this, own the space, and use it as a transformative “plunger” back into its store by forcing store ops to comply.
This is lipstick on a pig. These guys are in a death spiral, unable to compete with no coherent strategy. We are nearing the end of costs to reduce, so what do they do next?
My takeaway from this is not about Sears. It’s that retailers must do everything they can to redefine their value proposition in terms other than just price. The consumer denominates value in many ways. Sears’ approach represent strategies that are relevant to larger retailers. For smaller retailers, their strength is in the one-on-one relationships they are able to build with their customers. They have never been able to compete solely on price, relying instead on specialized assortments, quality and service. Overarching this value proposition is the opportunity to forge even closer relationships they have with their customers.
I would agree that it is a moot point. Any retail manager worth his salt immediately sees the lack of accountability and execution that is evident in Sears’ stores.
The bigger question remains the long term viability of a retailer that burns through cash like no other.
The problem for department stores is that they are fundamentally irrelevant to consumers. They are no longer competitive. You can find more unique product, better assortments, better store design, better prices, better service…better everything…someplace else. They are being out-retailed every day.
It’s not that these new programs from Sears aren’t good. And, some of the brightest retailers I know work at department stores. Sad to say that for most department stores, their time has passed.
Why exactly does Sears still exist? Anyone know? Great legacy brand lost in the wilderness. Sears used to equal appliances. The “golden spike” referred in this article used to be the “golden spike” through their entry level washers and dryers. While they’d advertise it, the salesman who just sold it and not upsold was usually let go. They used to know how to sell, now it is reaching for straws with “kidvantage” and layaway. Attention on Aisle 5! “Broken Brands Desperate For Help With Blinders On”
Ah, another opportunity for the panelists to blast Sears. It really doesn’t matter which strategy Sears follows, they will not get a larger share of consumer spending until they fix a number of basic problems in the stores. From assortment to customer service, Sears has trouble competing with Wal-Mart, Target and Penney, and unfortunately, that does not look like it is going to change.
It does sound like Sears is reaching deep to tap into a lingering legacy of those who remember when Sears stood for solid value and well-made products. In these trying times, people want someone to trust; if Sears delivers on their promise AND continues to execute well–there may be some hope. It’s a logical starting point, but the question remains: Is this for real or is it another promo of the month?
First of all, even the poorest made children’s clothing will probably outlast Sears versus the other way around. This is probably more about the press release to keep the Cramerites happy. Think about it, a kid tears a hole in his over-priced pants and his busy mommy is going to drive out of her way to some remote indoor 1970s mall just to get a couple of dollars back?
What difficult economic times? It’s always difficult for poorly-run retailers. If someone is not doing well financially, I doubt they will fork out the extra dollar to buy over-priced products at Sears. Most likely they will go to Walmart and if they are really having difficulties, then Goodwill. This industry will continue to blast Sears as long as they keep coming up with these amateurish ideas.
Sears knows that competing solely on price is a losing proposition. Differentiating through unique programs targeting their shoppers is their best hope for survival. The layaway and Kidvantage programs fit the bill. Some of the other unique concepts they are testing may also pan out.
Smoke and mirrors. And even Kmart has layaway.
I’ve said it before and I’ll say it again: Sears’ latest competitive moves are attempts to paper over the reality of their tired-looking stores and assortments. Layaway by itself isn’t a bad idea, and it differentiates Sears from its more upscale competitors like JCPenney and Kohl’s–both of whom have more compelling merchandise stories to tell. But it’s no substitute for fixing the fundamental problems with the business while the company continues its endless search for a new (and newly empowered) CEO.
As to the KidsAdvantage program: What retailer with any sense would prevent a customer from returning shoddy goods for credit? And why would Sears even want to draw attention to the fact that its kids’ clothing might not stand up to normal wear and tear?
For those who take issue with “tired” Sears stores, please remember that the Facilities Department is not the Marketing Department. Given what they’ve got to work with, I think the Sears Marketing Department is doing a heck of a job. Marketing is a cheaper and more immediate investment of limited funding than are store remodels, so where to spend the money? No-brainer.