News Feature | January 16, 2014

Sears Reports Disappointing Holiday Sales

Source: Retail Solutions Online
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By Anna Rose Welch, Director, Cell & Gene Collaborative
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Despite more troubling financial results, the company sticks by its loyalty program investments after customer engagement reaches new holiday high

Sears reported more losses coming out of the holiday season this year, adding more weight to its burden as the company continues to cut away the excess to turn business around. Following the holiday season, Sears reported declines in comparable store sales of 9.2 percent while Kmart saw comps decrease 5.7 percent. Overall, Sears saw a combined loss of 7.4 percent. 

Obviously, the company is less than thrilled by these results, which “are not nearly what we want them to be,” CEO Edward Lampert says. In particular, he expresses disappointment in the results because they “overshadow” the work the company has been doing in the past couple of years to keep meeting the needs of its customers. Over the past two years, the company has been closing stores, cutting real-estate assets, and trimming down on its inventory to keep business moving forward. Earlier in December, it announced it had filed to spin off its Lands’ End assets. However, there are still concerns among analysts about what will remain of the company once it has shed its most valuable assets.

Lempert has taken a lot of heat in the past from critics who are concerned that he hasn’t done enough to invest in stores. Rather, Lempert has chosen to invest in its online endeavors and in its Shop Your Way (SYW) loyalty program. As Lempert says, “We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, in home or through digital devices.” In other words, Sears is working to spend what it has left on omni-channel to meet customers’ demands and to keep up with the rest of the retail world.  Lempert continues to stick by these investments, saying that the company has seen annual digital growth and more engagement from the company’s loyalty program members. In fact, according to the Chicago Business Journal, the company’s SYW website was a saving grace for the company’s declining public image last year during the 2012 holiday season. More customers began making purchases via mobile, the Journal says, and while it didn’t provide a specific number, the company said the number of SYW visitors shopping at Kmart and Sears topped the total number of people that watched the final 2012 Presidential debate.

The Omni-Channel Opportunity For Retailers

The loyalty program continues to give the company hope coming out of this most recent, troubling holiday. This holiday season, 69 percent of holiday sales came from members of the rewards program, compared to 58 percent last year. This should be good news for the company, considering its spent $69 million more this year than last on SYW points. The company was also recently in the news for its launch of a new “Points for Progress” program, encouraging customers to stay active and get fit daily in order to earn Shop Your Way points. Despite its financial woes, the company seems determined to keep drawing in loyal customers and giving people the chance to earn points and experience Sears, via whatever channel they might prefer.

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