The Sears Bankruptcy and a Flawed Customer Experience: Interview with a Brand Strategist

The jarring bankruptcy last week of America’s most iconic retailer, Sears, succeeded a long, slow burn in which the holding company used financial engineering schemes and draconian cost-cutting to stay afloat for over a decade.

But the true demise of the 132 year-old brand is down to something much more elemental: neglecting the customer experience and failing to capitalize on its brand legacy.

Broken escalators, empty displays and wan lighting at its outlets showed its lack of commitment to creating a great shopping experience for its customers, while its marketing made no attempt to dispel the long-held perception that Sears was a place where you went to buy power tools or a refrigerator, not up-to-the-minute fashions or a swanky home theater, brand strategist Ali Craig said in an interview with CCW Digital.

“Sears wasn’t known for modern-day things like clothes and makeup, and that’s because they didn’t educate their consumer.”

Founded in 1893, Sears performed all the functions of Amazon long before the Internet: You could order anything from cast-iron pans to clothing and even prefab houses through its mail order catalog, and it would ship the items to you no matter where you lived. Its showrooms filled with glistening appliances became the stalwart of newly suburbanized America, and eventually, the anchor outlet at nearly every shopping center where it had a presence.

But when the tables turned and the legacy retailer found itself competing for market share against Amazon, Sears forgot about two things: who it was, and who its customers were.

A “meat-and-potatoes, good ol’ America kind of brand,” Sears “had this great history that they didn’t use to their advantage,” said Craig, host of the reality TV show, Fix My Brand, in which struggling small businesses undergo a “branding makeover’ under her tutelage.

Failure to capitalize on nostalgia marketing

Lots of brands leverage our thirst for nostalgia: think Buzzfeed’s relatable listicles like “You Know You’re a 90’s Kid When…,” Dannon reuniting the cast of Full House to sell Greek yogurt, and Old Navy featuring newly reunited boyband the Backstreet Boys in a recent TV ad. “There’s a reason why pumpkin spice is still a trend fourteen years later,” said Craig. “It’s because it reminds us of the holidays and our heritage and our longing for those days.”

Sears could have reminded its customers about Christmastime in the 80s and 90s, when kids would spend hours poring over the toy catalog. Or how its novel home delivery service brought mass-produced items to rural homesteads and small towns across the country for the first time, where people were accustomed to making their own clothing and furniture. Sears’ massive parking lots also served as a training ground for numerous first-time drivers.

Getting hip too little, too late

Another fatal mistake, according to Craig, was a failure to market to the whole family. Target’s recent ads show beaming, multigenerational, multiracial families, sending the implicit message: we cater to everyone. Instead, Sears slashed advertising spending by 29 percent this year as its losses peaked at $125,000 a month.

“They really tried too little too late when it comes to getting hip,” added Craig.

Sears signed with the Kardashians in 2011 to retail their Kardashian Kollection clothing line of runway-inspired apparel, hoping to draw a wider, younger audience. “It was so late in the game by then I’m surprised the Kardashians even signed with them,” said Craig. After abysmal sales, particularly at its rural outlets, the Kardashians pulled the plug in 2017.

Furthermore, poor inventory control inconvenienced the customer when items were not in stock. When Craig visited a Sears outlet last year in search of a refrigerator, she was told that her order would arrive in seven business days.

“I ended up going to Lowes,” she admits. “In our instant gratification society today, we’re upset if we can’t have [items] installed the next day or so, if not the same day.”

But inventory was only a small part of Sears’ retail experience failures. Specialized home appliance stores like Best Buy and Lowes became known for exceptional after-sales care, while more generalized department stores like Target and Home Depot emphasized a pleasant in-store experience with better lighting, design and visual merchandising. Sears, by contrast, came off as quintessentially utilitarian.

“Shopping at Sears wasn’t a fun experience; it was very pragmatic,” said Craig. “If you look at the stores that make it today, they create an experience for the consumer, which is the whole beauty of what a retail space does.”

Misinterpreting customer needs

Instead of investing in the retail experience, Sears Holdings CEO Eddie Lampert poured investments into its e-commerce site in a bid to compete with Amazon, failing to realize that as a retail space Sears was uniquely positioned to deliver a differentiated customer experience. A visit to Sears used to be an anticipated occasion for the whole family: an excursion into town for a daylong shopping trip.

“Sears could still have brought that mindset into today’s modern marketplace, that this is a very conscious experience that people are looking forward to.” But Sears’ financial troubles started long before Amazon: a red flag that its problems were rooted in its brand and shopping experience, and not the rise of e-commerce.

Forgetting that the modern consumer is educated about data protection and conscious about guarding their personal information, Sears aggressively pushed a customer loyalty program called Shop Your Way, which rewarded customers for shopping at affiliated outlets like Burger King, Under Armour and Uber with points that could be redeemed for Sears merchandise.

“When all these value programs came out, the consumer in the beginning thought it was really valuable,” says Craig. “But then the consumer got smart - which they eventually do.” An implicit goal of the loyalty program was to collect shoppers’ personal data to sell to other companies, a practice companies are relying on less and less after the passage of GDPR data protection laws.

Brand identity

Focused solely on survival, Sears lost all sense of brand identity, said Craig. When JC Penney rebranded as JCP in 2012, the goal was to model its outlets after Apple stores while offering everyday low prices. Its ads reeked of liberal activism, featuring interracial and homosexual couples in a clear bid to appeal to a younger demographic.

“That does not go over well with meemaw in Idaho,” joked Craig. “JC Penney was never a liberal-marketed brand.” Sears was likely “scared to death” by the backlash that ensued and curtailed any rebranding ambitions it might have had.

“You have to focus on what your core personality is,” said Craig. “Just like with a human personality, you can’t go from being a very meek, mild-mannered person to literally the next day deciding to become a rebel and get tattooed.”

Despite the bankruptcy, 700 Sears stores remain open (down from 1000 in February), but the holding company plans to shutter at least 142 unprofitable stores by the end of the year.