By Dr. Robert K. Passikoff
You know the saying “Nothing is more dangerous than an idea when it’s the only one you have.” Well, maybe it’s a little more dangerous when you have two! Sears does. Have two ideas, we mean. See what you think. They come courtesy of, and with great sincerity, from Ed Lampert, Sears Chairman and CEO:
Idea #1: Change Sears brand image. Sell Stella McCartney clothing, Jimmy Choo shoes, Chanel bags, and Rolex Watches on the Marketplace, a third-party vendor section of their website.
Idea #2: Position the company to compete with Amazon and eBay.
If you think that there’s some kind of strategic brand dissonance going on, you’re probably not alone. What number on a list of places you’d consider buying, say, a $35,000.00 Rolex, or a $2,000.00 pair of Alaia heels, or a Zac Posen or Chanel bag, would Sears be? In the top-3? Top-10? Higher? Much higher?
A just-because-we-were-curious experiment (Full Disclosure: this was over cocktails) among some friends at Per Se in New York City, one of the top-rated and most-expensive restaurants in the city, where people who can actually get a reservation could buy pretty much any luxury brand Mr. Lampert could conceive, were asked where they’d shop for a list of 5 luxury items, and nobody listed Sears. Nobody. When we raised the name “Sears” as a possibility, we got strange looks from our dinner companions, and the bartender cut us off. Nah, only kidding about the bartender. But not the strange looks. Which at the very least proves that the value of an idea has nothing whatsoever to do with the sincerity of the man who expounds it.
For the research purists among you, we will readily admit that this was a qualitative sample, although we’re pretty confident in our targeting. And yes, Mr. Lampert really intends to sell the luxe stuff online at Marketplace, which is currently the 3rd largest online vendor by number of visits, but that, of course, takes into account items other than $600 Pour Victorie boots, and still lags significantly behind Amazon and eBay.
Sears, well known for tools and appliances never did very well with their “Softer Side” commercials, a soft strategy they tried to make inroads into higher-end, better designed fashion sales. And then had to move back to hard sell. So moving very upscale, even on a one-removed basis? Well, we’ll leave that to you to decide. But for a more generalizable POV we looked at the 2013 Customer Loyalty Engagement Index, Sears ranks #6 of seven brands we track in the Department Store category, but it also ranks 6th in the rational loyalty and engagement driver, “Range of Merchandise” (where Christian Louboutin shoes would be located), and the emotional engagement driver, “Shopping Experience” (the operative word being “shopping”), two critical values when it comes to another category – Luxury Goods. Although in fairness, women seem to get pretty emotional about the Louboutin brand, so even more emotional engagement is going to be necessary to make this idea work.
And yes, every brand everywhere is looking to find ways to provide exposure to their brands in what’s turned into a 21st century mediascape. There are a lot of platforms out there – more everyday, in fact. But if the past few years have taught us anything about the digital world and e-commerce it’s that it’s easy to be out there, and it’s easy to target, but it’s not so easy to engage. Just because you build it, doesn’t mean consumers are going to come. Or, more importantly emotionally engage with the brand and buy.
So Sears – like many others companies – is trying out e-commerce strategies, but most-recently reported revenues have declined 9% with a $279 million loss, and same-store sales down about 3% this Quarter. Sears is trying to create a more upscale clicks-and-mortar brand personality via this integration. But long-term survival, it would seem is predicted to come from the stores and not the site. So perhaps Mr. Lampert should re-think this Sears Marketplace = Luxury Brands idea.
Is this a half-baked idea for the Sears brand? You know the joke about a half-baked idea? It’s only OK as long as it’s in an oven. But come to think about it, Sears does apparently have a pretty large inventory of unsold Kenmores to put it in!