That Time Data Integration Software Helped Turn Around the Sears Auto Center Business

ANALYST INSIGHT

Published: September 2016 Report Number: A0261

Analyst: Toph Whitmore, Principal Analyst Share This Report

What You Need To Know

When it comes to storied brands, “Sears” is about as old-school as you AT A GLANCE can get. Catalogs, retail, Toughskins, and for a while, a name on the world’s tallest building. But that’s the past. The present? A Business Challenges still-dominant retail giant with extensive North American retail and In 2014, Sears Auto Center faced declining sales and margins. At the service reach. same time, they had useful operations data, but it was Sears Auto Center is the company’s automotive service division, and inconsistent, difficult to analyze, and open to misinterpretation. operates some 650 service centers around the United States. Sears auto technicians will change your oil, fix your broken taillight, rotate your Solution tires, even replace your DieHard® battery. Establishing a “single source of truth” through data integration Brian Kaner is the president of the Sears Auto Center division. Two software; in this case, Domo. years ago, he had to confront some sobering realities: sales and margins Benefits were down, and continuing to decline. • Turning around a business suffering from double-digit declines to single-digit growth Revenue Drop? Marketing's the Answer! (Maybe in the few months since full Not.) rollout • Improved ability to spot My management-consultant-stained brain hears “retail” and I jump operational bottlenecks, impulsively to the “marketing-will-save-you” recommendation. (I limitations, and gaps recently noted marketing value delivery as a key success metric for • Better customer targeting with the same data data-commercialization initiatives.) I envision a cool marketing-focused • More transparency throughout data solution, with web clickstreams integrated with point-of-sale the business to share best touches and regional campaign results and local AdWords spend practices, identify understaffed locations, and determine where and … sorry. Got carried away. Breathe, marketer, breathe … employees needed more or better training Perhaps Sears Auto Center could have invested more in marketing to try to right the ship, or at least make it list a little less. But that wouldn’t have addressed the underlying fundamental business challenges. Kaner and team astutely recognized that the core of the problem wasn’t the marketing or lack thereof … it was the data. Specifically, the way the org used (and wasn’t using) it.

ANALYST INSIGHT

Sears Auto Center’s operations performance – particularly at the regional retail level – was difficult to analyze, let alone shepherd. Different management layers had different reports, and even shared data was open to misinterpretation. In a competitive business environment, static monthly reporting was simply not dynamic enough to enable Sears Auto Center to respond to in-market regional trends. When a location’s business is struggling, it’s tough to fix things when you can’t agree on what the data tells you.

Domo and the Quest for the "Single Source of Truth"

In an effort to reduce all the guessing, Kaner teamed with Joe Richards, who had come over from the Stanley/Black & Decker organization. Their initial objective was straightforward: Establish the vaunted (and oft-quoted-by-data-technology-marketers) “single source of truth” for Sears Auto Center.

In this example, Sears Auto Center’s digital transformation hinged on two simple, relatively universal goals. (I hope these don’t become clichés, because they’re so damn important.) First, get to a point where you (and everyone in the org) can trust data, and second, be able to act on it immediately. (The marketer in me wants to say “act proactively.” Let it go, marketer, let it go.)

Speaking of clichés, this is the part where I quote (or misquote, and undoubtedly misattribute) Peter Drucker, or maybe Lord Kelvin, or possibly Albert Einstein: You can’t improve upon what you can’t measure. For Sears Auto Center, the problem wasn’t that the data wasn’t there. It was that the data was everywhere. In pieces. It was nearly impossible for anyone to trust performance metrics when it was so difficult to reconcile disparities in expectations, analysis, and interpretation.

Kaner and Richards turned to Domo, a technology to which Richards had been introduced when he worked in the Sears home appliance division. Over the course of a few months, and working with Domo consultants, they prototyped and then deployed a data-integration solution that pulled from existing systems, including HR, POS, financial, even online.

Kaner and Richards wisely focused Sears Auto Center’s operational reinvention on productivity. Their Domo deployment highlighted operational bottlenecks, limitations, and gaps they had suspected but until then had not been able to address with any certainty. They looked at cycle times, employee productivity, even retail product mix data. That new scrutiny brought a new level of transparency to the entire business, all the way from regional retail service techs to upper corporate management. Technicians with low-turn times could be coached. Best practices at one location could more easily be deployed at others. Kaner and Richards and team could also identify understaffed locations (with overwork signaled by overly-high employee productivity metrics) and add techs to reduce stockout-cost risks.

So where are they now? Marketing! (Finally.) Now that they have a better grip on operational performance (in particular, capacity for new business), the Sears Auto Center team leaders have adroitly pivoted marketing to be more tailored to regional service- and product-demand mix. For example, data sourced via Domo from POS and CRM systems enables regional managers to target customers with enviable specificity: “Six months’ ago, your tread depth was 3/32nds, and we have a two-for-one sale on your tires this weekend.”

ANALYST INSIGHT

Finding Proof in the Pudding

If this were a case study about data-integration technology, this is where I’d write about how great the ROI was, how flawlessly the implementation progressed, and how Kaner and Richards are now sitting on a beach sipping umbrella drinks. (It was, it did, and I don’t know about the beach.)

But this isn’t a case study. It’s an object lesson in turning around a struggling business. It’s about establishing an operational model that emphasizes transparency, efficiency, accountability, control, and continuous improvement at all levels. Kaner and Richards and team recognized that unifying data could make operations more efficient. Automotive service isn’t the highest-margin business, and for Sears Auto Center, keeping auto techs busy, optimizing cycle times, and recognizing opportunities for upsell were paramount to success. The entire business operation was measurable. (Say it with me, millennials: It’s like a SaaS business, only in the real world!) Implementing Domo meant that the data could be interpreted accurately across the organization.

In just the few months since full rollout to the retail service level, Kaner and Richards have seen a business that had been suffering double-digit declines grow by single digits. That’s a pretty dramatic turnaround. Imagine what they’ll accomplish when they crank up the marketing even more. (Let it go, marketer. Let it go.)

Toph Whitmore

Principal Analyst, Big Data and Analytics

Toph Whitmore is a Blue Hill Research principal analyst covering the Big Data, analytics, marketing automation, and business operations technology spaces. His research interests include technology adoption criteria, data-driven decision-making in the enterprise, customer-journey analytics, and enterprise data-integration models. Before joining Blue Hill Research, Toph spent four years providing management consulting services to Microsoft, delivering strategic project management leadership. More recently, he served as a marketing executive with cloud infrastructure and Big Data software CONNECT ON SOCIAL MEDIA technology firms. A former journalist, Toph's writing has appeared in GigaOM, DevOps Angle, and The @TophW47 Huffington Post, among other media. Toph resides in North Vancouver, British Columbia, Canada, linkedin.com/in/tophwhitmore where he is active in the local tech startup community as an angel investor and corporate bluehillresearch.com/author/toph-whitmore advisor.

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