a strategic evaluation of:
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Kate McNichol & Ryan Pina
September 27, 2016 Executive Summary…
❖ Brand History In 1886, Richard W. Sears began his search for a way to support his primary income. He began selling watches to locals. This venture proved to be so lucrative, he eventually moved to Chicago and partnered with watch repairman Alvah C. Roebuck. Eventually, they started a catalog to sell watches and jewelry, which eventually became the iconic Sears catalog most people are familiar with. The catalog sold everything from clothing, to food, to even homes that could be assembled on-site, either by a crew, or as a do it yourself project. By 1970, Sears built its own headquarters in downtown Chicago, and was the largest retailer in the country until 1992, when it was surpassed by Walmart.
❖ Advertising History In the 1980s, Sears began to focus on patriotism and value as brand attributes for its consumers. Sears’ slogans included “There’s more for your life at Sears” and “Come see the (softer, newer, playful, etc.) side of Sears” as they began to publicly reinvent themselves in the early 1990s. Recently, Sears went to rebranding itself as the go-to “back-to-school” destination. They launched a microsite ArriveLounge.com, partnering with pop-star Selena Gomez to reach an adolescent audience. The brand appears to be losing its voice, and will need to find a cohesive messaging strategy.
❖ The Challenges Sears has been struggling to find itself. The brand has had inconsistent messages over the years that has caught up with them. Consumers have begun to associate the Sears brand with the brands that they sell in their stores, rather than the company as a whole. With competition like Target, Walmart, and Kohl's taking the lead both online, and at their brick and mortar establishments, Sears has been struggling to remain competitive.
❖ The Competition Sears has six major competitors: Walmart, Target, J.C. Penney, Kohl's, Best Buy and Amazon.com. Sears’ competitors have been taking advantage of Sears’ shrinking market share. The company's decline in domestic sales has resulted in a lack of growth within the retail segment. Meanwhile, its competitors have had a positive growth and share-of-voice consistently, year-over-year. With the digital space, comes a major opportunity for growth, which, when executed correctly, can bring people back into the stores.
❖ Product Offerings Sears offers thousands of products, from clothing, home décor, appliances, automotive products & maintenance, health & beauty products, sporting goods, toys, etc. This gives Sears a unique position in the department store landscape because they simply have a larger offering than most of their competitors combined. With some strategic repositioning,
Sears has the opportunity to come back as the go-to American one-stop-shop. sears ❖ Current Position As competitors dominate the consumer market with low prices, free shipping, and high quality products, Sears has struggled to remain top-of-mind and continues to lose share-of-wallet among their consumer base. Due to a sporadic messaging strategy and unclear target audience, Sears is simply firing on all cylinders, with no specific goal, other than to stop the bleeding. If the brand continues at this rate, it will no doubt be out of business within just a few short years.
❖ The Target We’ve identified an opportunity for Sears to capitalize on the growing home improvement market by targeting what we have called the “milestone” customer. These consumers are first-time home buyers, newlyweds, soon-to-be-parents, and recent empty nesters, whose needs align with the product offerings of Sears.
❖ Our Position Sears stands by its principles of hard-work, a “do-it-yourself” attitude, and the American dream. We want Sears to remain the brand you choose when you look for high-quality goods and services, coupled with a friendly and professional staff.
❖ Our Strategy We want Sears to be considered a branch of your extended family. By focusing on the foundation of family, we’ve created a strategy centered on celebrating milestones. We’ve developed a few concepts to bring our home to yours, including: an augmented reality app to assist with do-it-yourself projects, and specialists known as ‘Home Experts’ to ease the shopping experience.
❖ For Employees At Sears, while we are working to engage your family, we would be at a loss to not engage ours. To empower our employees, we to present three new initiatives: The first is ‘Kudos Points’, a rewards-based incentive program that recognizes our employees who exemplify our family values within the community. The second is a partnership with Habitat for Humanity, that will allow employees to take our concept of “home” and bring it to those who need it most. The last initiative focuses on hiring veterans. These dedicated and passionate individuals have proven themselves in serving our country, and we want to provide them an environment in which to flourish, when they return home.
❖ Creative Execution In order to create an immersive experience and drive the concept of ‘welcome home’, we’ve created a myriad of creative executions. Print and digital banners will attract customers with their vibrant colors and simple messages that reinforce the concept of home. Radio and television spots will maximize reach while providing additional support for the ‘welcome
home’ message. sears brand history
The Sears story begins in 1886, when a young Richard W. Sears, looking for a supplement to his primary income source as a railroad station agent, starts selling a surplus inventory of watches to locals. This would prove to be so successful, that within just a year, he would leave his railroad job, and move his efforts from the small Minnesota town of North Redwood, to the bustling city Chicago, Illinois. There, he makes his first hire, a watch repairman named Alvah C. Roebuck.
The following year, the pair produce a mail-order catalog for watches and jewelry, that would eventually balloon into the behemoth Sears Catalog we know today. The catalog expanded as Sears, Roebuck, and Co. (as it was then called) realized its potential to sell goods to rural customers, who may otherwise not have access to such items locally. The catalog contained everything from clothing and food, to automobiles, and eventually, even entire homes that could be assembled on site, either on one’s own, or by a crew employed by the company itself.
In 1925, backed by the success of its mail-order catalogue business, the company opened its first retail location in Chicago’s west side. At the height of its retail dominance, Sears would own and operate as many as 2,063 retail locations including mall-based stores (and often, adjacent Auto Centers), hardware, outlet, tire, and battery stores.
Long before the days of shopping malls, and giant big box retailers like Walmart and Target, large department stores such as Sears and Macy’s were where Americans went to shop for goods. While other major department store brands tended to focus on stocking the latest styles, Sears focused on practicality. The company tended to set up in working class neighborhoods and provided ample parking for its customers.
By the 1930s, Sears began creating large windowless, air- sears conditioned spaces, in which customers could could shop in comfort. By the 1950s, the mail-order business would become overshadowed by the tremendous growth of its retail operations, as access to stores became more convenient. Throughout the 1960s and 70s, Sears would begin placing locations in suburban shopping centers, with many becoming “anchor” stores. With the rise in popularity of the automobile, Sears became a destination of convenience. No longer would you have to travel to several different stores on a single shopping trip. Sears was the everyman’s store, and the everywoman’s store. It was a one-stop shop for everything from top-line electronics such as color televisions, and radios, to clothing, to furniture, and even tools.
Sears was an innovator in the retail industry. The brand pioneered the Discover Card, as a way to purchase goods on credit, allowing consumers to enjoy their purchases immediately, and pay them off later. Sears championed the appliance industry, with its stylish and well-built Kenmore brand appliances. Boomers were the fastest growing generation ever at the time, requiring larger homes for larger families. Many of these homes were built using Sears’ own Craftsman tools, which had established itself as a leader in quality since the late 1920s.
In the early 1970s, Sears built its headquarters in downtown Chicago—a 108 story architectural marvel, that suggested not only its dominance over the Chicago skyline, but also the retail industry at large. From the time it was completed in 1973 until 1998, it was the tallest building in the world.
In fact, Sears was the largest retailer in the country, until it was surpassed by Walmart in 1992. This is quite impressive considering its competition at one time consisted of Macy’s, Woolworth’s, Filene’s, Lord & Taylor, J.C. Penney, and many more. Of course, the department store of today has evolved several times over from the days of Sears’ dominance. Many have failed, as we have said goodbye to brands of yesterday such as Ames, Ann & Hope, Calgon, Lechemere, Service Merchandise, Zayre, and others.
Today, Sears faces steep competition, particularly from discount department stores, and ranks as the fifth largest department store brand in America, behind Walmart, Target, Best Buy, and Home Depot. Will Sears emerge sears as the innovative brand who consistently reinvented themselves and kept shoppers coming back, or will they go quietly into the night, the way of other once large retail giants before them? advertising history
Beginning in the 1980s, Sears began focusing on the the brand attributes that it felt would resonate best with consumers: patriotism and value. Their advertising showcased beautiful models sporting fine goods, like fur coats and wool hats, strutting their way down a red carpet. The juxtaposition of luxurious coats and terms like “value” and “discount” did very little for the brand’s position.
The next iteration of Sears branding revolved around the slogan, “There’s more for your life at Sears.” This highlighted the one- stop-shopping experience of the physical Sears real-estate. This moonlighted earlier attempts to portray Sears as a place of convenience. We’re introduced to the idea of shopping as an entire family. No longer is it just about jackets or tires or microwaves, but instead about the Sears event holistically. Ideas and stories started to come alive in the advertising.
Some of these ideas include:
❖ Taking your son with you to get a tune-up, because you can both catch the ball-game in the electronics section while you wait.
❖ Going to Sears with your family might mean a boring stroll through the appliance section with mom, the automotive section with dad, or the sporting goods section with your brother, but your patience and best behavior could score you a new bike!
❖ Sears knows everything you want, and has everything you need.
In the early 1990s, Sears begins to publicly reinvent itself, with the “Come see the ______side of Sears” campaign. The fourth word is often changed out with terms like softer, newer, playful, etc. We continue to see traces of the family aspect, but we also begin to see this transition to the timelessness of Sears. One ad in particular follows the life of a young girl, and her journey to wifehood, with Sears representing a consistent role in that sears journey.
Sears’ advertising became more friendly, and familiar, and the Sears story became more enticing. Recent advertising efforts from Sears appear to be running amok, falling somewhere between serial blunders, and random acts of creativity. Even some consistent efforts such as their “You won’t run into the top ten appliance brands just anywhere” campaign, fails to capture the tradition and sentiment of what the Sears brand was build and founded. While comical and clever, it gives the brand very little traction.
Just a few years ago, Sears, facing a ten year decline in “back- to-school” market share, decided to try something a bit more bold. Sears was not resonating with the 8-12 year old market, often being perceived as “outdated” and “old fashioned”. Sears took it upon itself to set up a confession booth where kids in this age group could anonymous voice their opinions about the first day of school, and some of the challenges they faced.
Sears gained excellent insight, finding that many kids in that age group have a lot of anxiety about how they’re going to dress, and fit in. They launched a microsite called ArriveLounge.com, where teens could pair their favorite style of music with their attire. They partnered with pop star Selena Gomez to promote
the campaign. sears the challenges
In addition to lower-cost competitive alternatives such as Walmart and Target fighting over the market share that Sears once called its own, the brand seems to be struggling to find an identity for itself. Sears inconsistent messaging over the years seems to have caught up to them. What is Sears? What do they stand for?
Where America shops forThere’s Value. more for your life at Sears. Your money’s worthYou and Can a whole Count lot on more. Me.Come see the _____ sideThe of goodSears. life at a great price. Guaranteed.Sears, where else? ? Good life. GreatWhere price. it begins.Life. Well spent.Shop your way.
1980 1990 2000 2010 2020 A Sampling of Sears Slogans (1980-Present)
Is Sears a noun or a verb? Can it be both? What would it take? If you were to ask most people what they typically associate with Sears, you’ll likely hear some of the brand names that are sold in Sears stores. Kenmore. Craftsman. Die Hard.
These represent the nouns. These are the “things” associated with Sears–or the what. People can get things anywhere. In fact, they can even get Kenmore and Craftsman items anywhere, because Sears authorized those brands to be sold in K-Mart locations amongst other retailers in 2010.
The verb is the how and the why. What are the reasons to go to Sears, over other retailers? Consumers need to be motivated by more than just a “what”. After a while, the what becomes the
“So what?”. This does not nurture brand loyalty. sears
What can Sears provide that no one else can? What makes them unique? Let’s look at the competition. the competition Price
Quality
Retail Sales 2015: The retail space is both, highly competitive and volatile. Many brands are fighting for market share, and there are several ❖ Walmart factors that contribute advantageously, or otherwise. $343.6 Billion ❖ Target Compared to direct competitors, Sears ranked 16th and 18th in $72.6 Billion 2014 and 2015 respectively on the National Retail Federation’s ❖ Amazon Top 100 Retailers List. The problem lies not with its ranking on $49.4 Billion the list, but rather with the lack of growth. Between 2012 and ❖ Best Buy 2014, the company saw a decline in domestic sales of -13.4% $36.0 Billion and -11.8%. ❖ Sears $25.8 Billion Meanwhile, the competition is seeing growth in their domestic ❖ Kohl’s sales numbers across the board. These numbers, while small, $19.0 Billion imply that Sears market share is shrinking, while its competitors ❖ JC Penney are taking advantage. $12.2 Billion The kinds of products that Sears offers are continually found at
other retails, with potentially lower prices. There is also a sears significant increase in competition from the digital space, with many items available through online retailers such as Amazon.com. product offerings