A Quart of Paint
If you’re a homeowner, you know that you can never complete your project list. All you can do is try to keep it from getting longer. At our house, outside projects are my job and in the Northwest, that means get them done in the summer.
In the spirit of shortening the list, I stopped by a Sears yesterday to pick up a quart of exterior primer paint for one such job.
And found that Sears no longer sells paint. HOW IS THAT POSSIBLE!?
When we first moved up here from the Los Angeles area north of 20 years ago (Yes, I do appreciate the irony of my having found my way into action sports by moving from SoCal to Seattle), there was a chain of home stores called Ernst. It was obvious they were struggling, but when they started to carry furniture and all kinds of other stuff basically, in my view, desperately putting on the floor whatever they thought might possibly sell, I knew they were toast. Shortly thereafter, they were out of business.
It’s no secret Sears has been struggling. But when I saw they were no longer carrying paint I said, “Okay, that’s it.”
Tactically, I’m sure their carefully conducted analysis showed that paint was a money loser for Sears. So they got out of it.
But it’s way more than a financial decision. It’s a decision about who their customers are and what they expect from Sears. Truth is, I mostly go to Home Depot and Lowes now because I know that whatever I want for home repair, maintenance, or remodeling they are likely to have it. But Sears was convenient, and I had a residual affinity for it as a home store. But somehow their not having paint flipped a switch in my fontal lobe and what was clearly a delusion on my part is gone.
Sears used to be the place where you could get everything. If not in the stores then through the catalog. For certain items, it could be the only choice for people in parts of the country, and they were happy with Sears even if it took weeks to get the product. It’s way easier to be a retailer when your customers have no choices and love you anyway.
Sears has a hangover from the party it threw while selling almost everything to everybody. Now, why would you choose Sears? It sells hardware, home improvement, clothing, shoes, appliances, electronics, towels and bedding and probably some categories I’m forgetting. Oh yeah- auto repair. Is it your first choice for any of those? Can you think of anybody else that tries to compete in all those categories? To make it worse, we can all think of places with better selection, prices, and/or service in any of those categories.
Sears competes with everybody. Which is impossible and maybe means they are not very relevant as a competitor. I’d also note that the chains I consider the closest overall competitors to Sears (Walmart, Fred Meyers, Target, etc.) are also carrying food; the one thing Sears seems to have stayed away from.
Sears is a hodge podge of unrelated categories no longer connected by a defined consumer need and I don’t think they do any of the categories particularly well. It’s a bad place to be. And, as we all know, it’s made worse by an economy where sales increases are harder to come by.
I’m not writing about Sears because I’m worried about them leaping into the youth culture business (though, hell, everybody else has). They are a poster child for two business conditions. The first is owning a market niche (a damnably big one in Sear’s case) and having the market evolve away from you. Markets, of course, always change, so you have to expect that. I also expect you aren’t going to be able to predict how they change.
The second, said before but worth saying again, is that when you try to be meaningful to everybody, you can end up being meaningful to nobody.
It’s certainly an old story to us. Credible, successful brand tries to leap beyond its customer franchise alienating existing customers, never really distinguishing itself with the new target customers, and finding the competition from the whales in the new ocean overwhelming. Or credible, successful, brand just continues to do what it’s always done and ends up screwed as the market changes and it doesn’t.
It has, I think, always been true that you couldn’t just sit in your niche. Neither could you infinitely extend your brand. But cash flow, I’ve said, covers up a host of problems and it was easier to do nothing, or do the wrong thing, in the old economy and get away with it for a while.
In our competitive thinking, we used to be over focused on what our competitors were doing. It was way easier than really figuring out who your customers were and why they were buying from you- that’s hard work. That really didn’t work and certainly doesn’t now.
To over simplify, you probably have to grow, but not too much. “Not too much” is different for every brand or retailer. Every product you decide to carry, every distribution decision you make has to be based on what your customer is doing and what they want from you.
Create a process to help you make those decisions. If you don’t, they will be overwhelming and you’ll find yourself wallowing around like Sears. Don’t stop carrying paint if your customers expect you to have it.
Like you, I analyze when I shop, and although its been a couple of years since I’ve been to Sears, it seems to me that they don’t compete to win by category or by price, but that they service a specific demographic and in Southern California, they seem to be heavily catering to the hispanic community. Sears provides financing with the sears card, and although I don’t have one (anymore) I do remember department store credit being relatively easy to get (easier than a bank card). I don’t have much reason to go to sears these days, as I can get better products and prices on anything I want, but it seems like they are hanging on by utilizing a consumer segmentation strategy of catering to hispanics (at least in So.Cal) and by providing easy credit to thier customers.
Hi RB,
That’s not necessarily a strategy they can count on in a lot of the rest of the country. And hanging on isn’t really a great strategy. Ultimately, their biggest asset may be all the real estate they own. You said it yourself- haven’t been in one in two years, don’t have their credit card, don’t have any reason to go in. That’s pretty much the problem.
Thanks for the comment,
J.
I agree with you both, here. Totally true on both statements. RB is correct in that Sears primary customer in SoCal is Hispanic. They are the working class and that is who Sears has served for the last 20 years. White collar folks wont shop at Sears, which is sad to think. Most don’t realize that Sears still carries product of quality and value. White collars want brand names and specialty appeal which Sears doesn’t maintain and within reason.
Also, yes, Sears (in most cases) owns the land in which it’s stores live. This alone will allow it to live on for years to come.
Unfortunately, Sears hasn’t marketed themselves in a manner that deserves attention by consumers. Hands down, their worst error. They created the home goods/hardware store but fell asleep at the wheel back in 1985.
Mark,
And the morale of the story is don’t fall asleep at the wheel. Try new things. Don’t get so lost in the trees you can’t see the forest. Don’t expect existing trends to continue. Easy to say, hard to do.
J.
Good assessment of Sears, I agree completely agree with your points. It is amazing that 20 years after Sears lost its role a key retailer that they are still operating as a major national chain.
Hi Lloyd,
I perceive they’ve been declining for more than 20 years. Remember their foray into financial services? I’m not sure they are a major national chain. They just have a lot of stores.
J.
So let me expand and spitball a little: I’m not saying Sears is a winner by any means or that it hasn’t squandered its original market position however, targeting specific demographics on on a regional basis across the US (and Canada) and using credit as a tool to justify high prices is a strategy. I haven’t read a Sears a (ever) so I don’t know how its working, but I do think that there is a consumer that needs credit that wants national brands and will shop at sears to get it. It might be different ethnic groups in different regions, but they’ve identified a customer and provide something for them, Segmentation at its finest.
RB,
Interesting idea. Go read a Sears report and tell us.I wonder if that’s enough of a market by itself to the whole basis for Sear’s competitive position. I guess not given the problems they have. Isn’t that kind of the space “rent to own” stores have taken over?
J.
That was supposed to say read a sears 10Q
RB,
I know you meant 10Q.
J.