Changing Gears: The new side of Sears
Sears & Roebuck has been a dominant retailer in the Midwest since it got its start in Chicago almost 120 years ago. It’s hung on while other stores – from Marshall Field's to Montgomery Ward - have stumbled and vanished. Although the number of stores has shrunk, you can still find a Sears in every corner of the Great Lakes region. For the regional economy series Changing Gears, I took a look at Sears' latest reinvention starting at the corner of State & Madison.
One of the first people I encountered was Mario Brownlow, a college student from Hyde Park.
When I asked him the last time he shopped at Sears, he paused:
“I haven’t shopped in Sears, in hmm, probably like three years.”
I stopped Brownlow just outside the Sears store on State & Madison. This used to be the home of the biggest department stores. Now, people come here to shop for bargains. A Target is set to move into the famous Carson Pirie Scott building across the street. And Wal-Mart plans to build a small neighborhood store nearby.
Brownlow’s arms are full of bags from Old Navy and Macy’s. Today, he’s shopping for shirts and pants. He’s thinking his next stop is the Express. I asked him, why not shop at Sears?
“I don’t know, I just haven’t,” he said, adding his last purchase at Sears was a microwave. Sears, he thinks, just doesn’t “jump” out at him like other retailers.
That’s pretty much the problem with Sears these days. The Great Recession’s been tough on virtually every retailer – especially across our region. Lately, things have started looking up for almost everybody – but Sears. In most recent financial results, sales at Sears stores were 4.5 percent worse than last year. Macy’s, Target, JCPenny – and even Kmart, which Sears also owns, all reported positive growth.
Analysts say that’s partially because younger shoppers like Brownlow are more apt to hit spots they think are trendier – like Express or H&M, in this case right next door to the Sears. So the chain competes with other retailers who just do apparel. But Sears also still sells lots of other stuff.
That’s why Gary Wands came in on his day off – to look at high-end televisions.
He said he didn’t find much.
“You know, they had some closeouts for TVs that looked appealing,” said Wands, but ultimately, he felt the selection was too small, adding: “You know for stuff like that, I’ll go to Best Buy.”
Analyst Paul Swinand says that Sears is just in a “tough position”.
“They have all sorts of people nipping at their heels,” said Swinand, who studies the retail industry for Morningstar. His office is just around the corner from the State Street Sears. He says the department store’s diverse offerings may draw customers looking for convenience, but it’s a challenge to keep them:
“Your products have to be at least as good and nearly as well priced,” he said. “So if you’re in the TV business and Best Buy is cheaper, and has a better assortment, you’re always going to struggle in the TV business.”
The same goes for fashion, he said: “If you’re trying to do fast fashion and you’ve got JCPenny and H&M at faster fashion and better prices, you’re going to struggle in the fashion business.”
Sears’s bedrock business – what made them famous from the beginning – was its catalog that offered everything.
Remember those More for Your Life commercials?
Sears has used its versatility as its selling point for years – although its latest marketing has been its Shop Your Way program that focuses on the company’s online presence.
Like many companies, Sears has looked to the Web for revival.
Its new CEO, Lou D’Ambrosio is from that world, instead of retailing. Sears wouldn’t make D’Ambrosio available for this story. In an email they sent to me after the broadcast deadline of the story had passed, spokeswoman Kimberly Freely said Sears was a company that has “long been established as the cornerstone of Americana”, adding, “Over the years, we’ve evolved with our customers to continually keep up with the ever-changing aspects of their lives”.
John Melaniphy is a Chicago-based industry consultant. He thinks Sears has to do a lot of work to remain a part of the retail landscape here.
“I think the economy, and retailing changed, and Sears didn’t follow,” he said. “Sears did not change.”
There is one bright spot. Melaniphy’s shown that the company’s brand is valuable to immigrants – whose numbers are growing in our region and in our country.
That includes Shilpa Shah and her coworker Meena Patel, who visit the State Street Sears almost every other day on their lunch hour. They’re not just loyal to this store but also to other Sears in the suburbs.
“They have good deals, and also the customer service is good,” said Shah, who works for the State Bank of India. Added Patel: “They have good quality of stuff, too.”
Swinand, the Morningstar analyst, said he thinks it’s not so much about reinvention for Sears, but focusing on the fundamentals.
“I think if they’re going to go another hundred years, they’re have to start with the basics of retailing,” he said. “Having products people want at competitive prices when people want them, having clean stores and helpful associates.”
After all, it’s the customers you want to keep happy – because they’re always right.
Changing Gears is a public media collaboration between WBEZ Chicago, Michigan Radio, and ideastream Cleveland. Support for Changing Gears comes from the Corporation for Public Broadcasting.