Could a Different eCommerce Strategy Have Saved Sears?

 In Shopping

Sears was the first American “everything store,” replete with mail-order retail, celebrity collections, private-label brands, a discount pitched catalogue called “Book of Bargains.”

With its beginnings in the 1890s, Sears, Roebuck and Co. was the Amazon of the late 19th century and flourished for 32 years before it ever had a brick-and-mortar presence.

But those days are no more. The retail heavyweight has filed for Chapter 11 bankruptcy and announced the closure of hundreds of stores. The Amazon of old faded in the shadow of the Amazon of now. But different eCommerce strategy might have been able to save them in some incarnation, and data from Jumpshot’s Insights platform provides some clarity on how.

Paying to gain visitors: too little too late

In the last few months, sears.com started drawing more and more traffic from paid search campaigns. Almost 50% of all their search engine traffic in July, August, and September was from paid sources, a two-fold increase in traffic from last year’s numbers in the same period.

Unfortunately, this paid search surge is too little too late. This approach could have been effective if leveraged years ago with an effective eCommerce presence, but overall traffic to sears.com has been trending downward. The paid strategy seems to have been an attempt to boost declining numbers, rather than an attempt to build actual momentum.

If Sears could have drawn traffic with effective advertising, either with paid search—as in the model for pet supply retailer Chewy.com and furniture specialist Wayfair.com, who has seen success with paid search and hefty TV and social spends. Coupled with an effective site, Sears had options to have built on longstanding brand loyalty to stay alive.

Craftsman: a case study in demographics and brand loyalty

An interesting element of Sears.com business has been its reliance on strong brands it developed in their department store heydey for digital purchases. Its strongest categories online have been Tools, Appliances, and Shoes, where the dominant brands for Sears.com are Craftsman, Kenmore and DieHard Boots (in the Jumpshot offices, we’ve only just learned that DieHard isn’t just a battery brand).

Craftsman in particular stands out. Within the Tools category, 84.4% of sales are Craftsman brand. In fact, around one-fifth of all purchases on sears.com (across all categories) are driven by Craftsman tools.

And that’s enough to make Sears competitive in the category across retailers. It ranks in the top 5—4th behind Amazon, Home Depot and Walmart and ahead of Lowes—and showed the highest year-over-year growth in transactions among those same retailers.

And without a paid search strategy to speak of, that growth of online sales demonstrates the resilience of the quality and trust the brand has earned over the years. But unluckily for Sears, these brands tend to attract an older demographic and an even older set of customers that is usually interested in buying tools and appliances online. This means it’s not a great source of long term growth for the company. Craftsman was recently sold to Stanley Black and Decker.

Ailing appliances sales

Like in Tools, Sears appliance sales are dominated by its own brand, Kenmore, which drives 62% of all appliance sales on the site.

That’s a stat any retailer would envy, driving sales of your own products means more profits for you. But sales in the Appliances category plateaued for Sears (down 0.1% year-over-year through the end of Q3) this year. What happens when the brand your company holds is more valuable than your retail outlets? Sears’ CEO Eddie Lampert has one solution to that problem, he’s trying to acquire the brand for his hedge fund, ESL Investments.

Are lower prices (and quality) really more in the Amazon era?

Shoes exemplify the entire Sears eCommerce experience. 1) Sears.com is ranked 17th among a bevy of other retailers, Sears faces serious competition in this category. 2) A huge portion of their sales come from brands they own or hold exclusive licensing agreements on (I love comfort, Athletech, Roebuck & Co., Thom McAn). And 3), a big portion of the traffic they do garner is focused on a few legacy brands like DieHard boots.

Sears referring keywords for the Shoes category
That shoe category traffic is generated from Sears’ brands is a testament to decades-long commitments to product development and marketing that brought people into Sears department stores.  Amazon has, essentially, the opposite approach. Draw people by offering the lowest friction to purchase on established brands, then use data to identify opportunities to produce lower-quality, lower-price products to gain a portion of established brands’ share.

Forced to sell off their flagship brands to stay afloat, Sears failed to adapt and capitalize on brand loyalty. Taking a different approach to private label offerings online strategy may have been able to keep them afloat.

 

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