Sears announced what has become an epitaph to the once great department store – another quarterly loss. For the third quarter, Sears lost $218 million which is more than $91 million than it lost in 3Q last year. Clearly, Sears is hemorrhaging and it needs to do something or it too will go the way of Circuit City – and it must do something quickly.
Sears blames poor appliance and home improvement sales for the loss. It is even making the unprecedented move of remaining open on Thanksgiving in a frantic effort to bolster 4Q revenue. It seems to me that, if it is having problems getting people in the store on a regular day, I doubt many consumers will rush out of their Thanksgiving holiday meals and celebrations to go to Sears. (It actually might work if Sears had a brand whose meaning had permission to be a destination on a holiday.)
Sears executives can blame a poor economy all they want for their increasing losses. They can blame the economy until investors run out of of patience (or cash) and the once-great icon of retail falls, leaving carcasses of retail space and an unemployed workforce in its wake.
It would be naive of me to suggest that the faltering economy is not a contributing factor to the problems at Sears. In fact, the faltering economy is the very thing that magnifies the problems at Sears (and many other companies for that matter), which is its lack of ability to create and sustain preference.
In a good economy, this inability to create and sustain preference is not as acute of an issue as revenues from sales and promotions can often mask the bigger problem. But when the economy is off and people are being more particular about where and how they spend their money, preference is often the difference between survival and failure.
This lack of preference has a snowball effect. I drove by our local Sears on Tuesday and counted five cars in the parking lot. Ever pulled up to a restaurant with no cars in the parking lot? Did you go in and have dinner?
Throughout the last few years, we at Stealing Share have talked to great length about Sears and the problems it faces. We believe we have a strategy that can give it exactly what it is missing – preference and a reason to go to the store. This does not involve changing Sears’ advertising agency or hiring a social media expert to create a silly viral video or Facebook page. It involves two things: 1. A willingness to change. 2. A real desire to win.
By continuing to do what Sears has always done will only bring it to the same place – a continuation of hemorrhaging cash. Open yourself up to change, and embrace the opportunity the market is giving you and, not only will you survive the down economy, you will flourish.