Ghosts of retail past
What Sears has to tell us about customer experience
While we’ve been hearing about brick-and-mortar stores being on the ropes for a decade, the number of major retailers that closed over the past year doesn’t bode well for the industry. Nobody’s saying the mall is dead. Far from it. Shopping is our national pastime, right after baseball. But much of retail is hanging on by a thread. More brands will disappear this year, while others will innovate out of the big-box store.
Don’t blame the retail apocalypse on Amazon
Shopping continues to be a physical experience, with 90 percent of purchases occurring in brick-and-mortar stores. For all the talk about online shopping, the reality is that it’s still easier to buy pants that fit when you can try them on first.
Then why the demise of Sears? Ironically, Sears started what Amazon is reinventing. More than 100 years ago, the Sears catalogue transformed the shopping experience. Everything from mail-order capes and guns to cars could be bought from home for the first time. The catalogue laid the foundation for Sears’ brick-and-mortar expansion in the same way that Amazon’s shop-from-home site created a launchpad for its recent expansion into physical stores with its acquisition of Whole Foods.
When a plane crashes, it’s often not because of a single failure but rather due to the snowball effect of multiple failures all at once. Sears’ failure was due to a lot of reasons. The burning question though is why so many retailers—Sears, Toys “R” Us, Brookstone, David’s Bridal and Claire’s Boutique, to name a few—went bankrupt in 2018. Put them together, and there’s a different downfall story to tell.
Multichannel alone isn’t enough
Read Sears’ 2011 chairman’s letter, and you’ll notice that a good chunk of it is dedicated to “Building Closer Relationships with Customers.” The vision for the company’s future at that critical juncture was aligned with “becoming an integrated retailer,” “multichannel capabilities” and “the art of being relevant to customers.” At the time, Sears’ strategy to drive customer delight through innovation was compared to Apple’s.
Seven years later, however, Sears is bankrupt. It wasn’t enough to create a membership program, mobile apps, social capabilities and an online marketplace; in the end, Sears failed to build the close customer relationship needed to keep shoppers coming back.
The retail experience
Sears knew it needed to leverage information and technology to create great customer experiences. But anyone who shopped at Sears, Toys “R” Us or Claire’s over the past few years probably left less than delighted. The physical shopping experience at these stores wasn’t much different than it had been the previous decade — and the decade before that. Multichannel retail stopped at the front door, as if the physical shopping experience were somehow separate from the digital. Sears’ attempts to implement a multichannel strategy never quite delivered on its promise.
Transcending the physical–digital divide
The difference between multichannel and omnichannel is more than just semantics. Multichannel means engaging the customer through multiple channels—social, email, online, etc. A retailer may have an online and a physical store—multiple channels by which to sell their stuff—but the customer experience remains siloed in each.
Omnichannel, however, enables customers interact with a retailer through mobile, online and in-store, and all those experiences are unified. Omnichannel creates a holistic retail experience for the customer that’s individualized and consistent. So when the customer goes to your physical location, the in-store experience is seamlessly integrated with the online one.
Consider the case of Walmart: At the same time that Sears was declaring bankruptcy, Walmart was celebrating its strongest performance in a decade due, in large part, to its omnichannel retail model. Automated grocery pick-up, self-driving cars, virtual dressing rooms and digital aisles are all part of the omnichannel formula that will make shopping easier for Walmart’s customers. By pushing the digital envelope and embracing omnichannel, Walmart is staying relevant while expanding its brick-and-mortar presence.
Retail apocalypse redux
No doubt this year we’ll see more long-standing retail brands join Sears on the list of closures. Those companies looking to innovate their way back into relevancy will need to engage their customers differently than they have in the past. The J. Crews, Pier 1’s, and Neiman Marcuses of the industry should take notice.
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