Why is Sears dying?
Sears is on the verge of declaring bankruptcy. All department stores have faced increased competition from Amazon.com, but Sears is out of cash and about to fail. Why?
Because the CEO, Eddie Lampert, is a guy with nutty ideas who treated Sears like a dotcom, conveniently forgetting that it has physical stores that need maintaining.
Lampert, a former Wall Street prodigy, took control of Sears more than a decade ago and became its CEO in 2013. But he's rarely seen in the office[.] ... [T]he retailer, famous for selling everything from shoes to vacuum cleaners to whole houses, is facing its biggest crisis ever. It's closing hundreds of stores. Others are in shambles, with leaking ceilings and broken escalators. In some, employees hang bedsheets to shield shoppers from sections that stand empty.
Before Sears and Kmart, Lampert had no experience in retail. The big plan he hoped would transform Sears was a rewards program called Shop Your Way, which the company introduced in 2009.
Through the program, frequent buyers accumulate points for their Sears and Kmart purchases and turn them into coupons and discounts. One primary goal of Shop Your Way was to acquire customers' personal information and sell it to other companies, according to a former executive who worked on the program.
Because of the program, Kmart cashiers went from scanning 18 items a minute to just five, according to a former assistant manager at one store who left in 2012 after 12 years with the company. Some frustrated customers abandon their shopping carts, forcing employees to return all the goods back to shelves.
At the same time Lampert was pushing Shop Your Way and posting on the site, employees started complaining that Sears had stopped investing in its physical stores.
"He refuses to put a dime in updating stores," one former vice president said. "You walk in and you are embarrassed as an employee when the ceilings are leaking and the floors are cracked."
This describes my local Sears to a T, complete with the leaking ceilings. One detail they forgot to add was the lack of staff. In my Sears, there is often only one cash register open...for two floors of the store. So if you want to buy something upstairs, you have to walk down the non-functioning escalator and join the line that wraps around the blue jeans displays as if you were buying bread in Moscow in the 1980s.
Sears is often my first choice to shop because of the prices. But shopping there is always an unpleasant experience because there is zero help, and one has to take the endurance test at the cashiers. The only thing Sears really has of value left is real estate – the valuable leases it has at some of its locations.
Questions for discussion:
1) Will you miss Sears when it is gone?
2) What do you think will replace it?
The incredibly shrinking store! Eventually, a Sears or Kmart will be able to fit snugly inside a 7-11.
Fresh off the pallet! Just like Costco! And the "mystery bleeding linoleum" gives Sears that "haunted house" look that appeals to young people!
And by emptying rooms of merchandise, Sears gives you that genuine "Venezuelan shopping experience" that customers line up for.
Ed Straker is the senior writer at NewsMachete.com.