Sunset for Sears?

The fabled retail brand of Sears is in trouble. Now owned by hedge fund executive Edward Lampert, the company has recently announced its latest attempt--of many--at a turnaround, along with the departure of its CEO. His plan is to reorganize the 121-year-old retailer into business units with "broad authority to shape their own future."

I'm not sure what that means, but to me, it looks like big trouble if their big-name brands, such as Kenmore and Craftsman, can cut deals with other retailers. It could spell the end of the Sears brand as we've known it for all these years. It looks to me like Sears has never pursued the only obvious strategy available to them. Somewhere along the line they forgot what made Sears famous.

No, it wasn't the catalog. That was the correct answer several generations ago. In modern times, Sears was one of the few retailers, if not the only retailer, that built real brands.

People went to Sears to buy Kenmore appliances, Craftsman tools, DieHard batteries, Weatherbeater paint, and Roadhandler tires. Once there, they bought other stuff, like Levi's jeans or Sony TVs. But it was those brands, sold only at Sears, that made the difference.

In recent years, though, there hasn't been much in the way of brand-building coming out of Sears.

Quite the contrary: "Brand Central" talked about offering everybody's brands (wrong strategy). And the "Soft Side" featured no brands (again, wrong strategy).

It would appear that Sears has not learned one of marketing's basic lessons: Never forget what made you famous.

Since there has been a hiatus in brand-building at Sears, it seems obvious that what's needed is to revisit each brand and figure out how to revitalize and strengthen it.

They should take advantage of Kenmore's leadership, and position it as the No. 1 family of appliances in the end. They should do the same for Craftsman, which is America's favorite brand of tools, by far. Perhaps it's time for a next generation of DieHard battery that dies a little harder. Could their paints use some sprucing up?

If they do a good job with their brands, more people will go to Sears. And if designers improve the store's layout, people might spend more time buying other things.

While they're at it, maybe they should invest in a new brand or two. Interestingly, they sort of did that when they bought the "Land's End" clothing line--though being a catalog brand does cause some confusion. They certainly could launch a specialty truck tire in their automotive department.

What I wouldn't do is spend a lot of money on the "Sears" brand. That's just the place you go to find those "sold only at Sears" brands. If you allow these brands to be sold elsewhere, you've lost the differentiating strategy for Sears.

With that kind of a "back-to-the-future" strategy, their obvious position for the store would be, "Home of America's favorite brands."

One other problem Mr. Lampert faces is what to do with Kmart. That also calls for an obvious solution: Abandon its Kmart brand and convert the stores to Sears. With the likes of Wal-Mart, Target, and J. C. Penney as competitors, Kmart's future will never be bright. Maybe Martha Stewart's brand would do better in a revamped Sears store than a struggling Kmart.

Turning around one troubled brand is tough. Turning around two in the same category is impossible.

What do you think of Sears' strategy? Comment below.

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Comments

[FRWebb]

Sears has indeed been neglecting its brands. I now know many consumers who now avoid Kenmore because of the poor responsiveness of the Sears repair service. It seems that a strong brand requires not just excellent products (which reviews indicate the Kenmore and Craftsman lines have) but also customer care initiatives that match and extend initial product strength.

[Tommy]

Personally I have never understood what has gone wrong with Sears. I mean I do get the markets (or products they sell) they're in have fragmented and Sears isn't anywhere close to hip for younger folks, but I still love the darn store.

As a life-long Sears shopper and an ad guy I don't think it would be that hard for them to put a "hipper" face on their brand. I mean from my conversations with folks it seems most think it is a "discount" store selling off/cheap brands.

That isn't the case. Your suggestion to position them as the "Home of America's favorite brands" is spot on, cause that is exactly what I'd tell them if I was in a focus group.

Of course that is not a good place for them to be.

[Blair McCaw]

It is a bit ironic that while the rest of the retail world is finally coming around to understanding the power of their own brands that Sears lost sight of the valuable brand assets they had so wonderfully built.

Today, retailers from Target to Macy's to Home Depot are licensing brands to catapult them into the exclusive brand world without taking the time to build the brands. When done right, licensing works beautifully and can be a very cost effective way to create exclusive brands-- but its no substitute for building brands "the old fashioned way".

[Martin Jelsema]

Last week, I, too, blogged about the fate of Sears. www.signaturestrategies.com/brand_managment/helping-to-salvage-the-sears-brand/#more-102

My take was that several of the sub-brands - Kenmore and Craftsman especially, could be spun out as separate chains to at least salvage those endearing lines.

I also pointed out that, in my estimation, Sears downfall occurred when they ventured into insurance, real estate and mortgages. They lost focus while pursuing the growth at any cost strategy. Too bad they were never able to correct course.

I believe it's a major and sometimes futile effort to re-brand. There are just too many people with long memories and associations that it's difficult and very expensive to change perceptions. Much better to salvage what you can and begin from scratch.

Martin