Opinion: Can Sears Be Revived After Eddie Lampert Won Auction Bid, Saving Sears From Liquidation?
Can Sears be revived after Chairman Eddie Lampert won a $5.2 billion auction bid to save Sears from liquidation?
When thinking of Sears I got nothing to be excited about! On the top of my head, I don't even know what I care to want to buy at Sears. Whenever I need new clothes I think about stores like Kohl's. Whenever I need new gadgets I think about stores like Amazon. Sometimes, Best Buy and Micro Center make up the top of my head for buying computer-related items. Video gaming stuff I would just usually get from an online store like Valve's Steam. If something needs to be improved for the home, I usually go to Home Depot. I usually go to Home Depot or Best Buy for big items such as refrigerators. If I need everyday cheap, items I just go to Walmart. I still don't see what I would need so much that I would rush to Sears to get it.
I think Sears will have a very tough uphill battle even if it got itself out of liquidation. In order for Sears to be relevant, I think Sears got very few options. The first option is to find out what makes Sears unique in today's competitive online/offline retailers such as Amazon and Walmart. If Sears cannot compete against Best Buy, Amazon, and so forth, then I think Sears needs to go with the second option which is to cater to luxury stuff only. Nonetheless, this would be like completely changing the business model of Sears inside-out. This would mean Sears would not even try to be competitive against brands like Amazon and Best Buy. Instead, Sears would just cater to the rich.
Let's fantasize about how Sears would just cater to the rich would be like OK? Let's imagine instead of selling a normal refrigerator Sears now sells a gold-plated refrigerator. This gold-plated refrigerator is one of a kind since very few of them were made. The price is around $25,000. The refrigerator is not only gold plated, but it is also a tech hub center for the kitchen where the large glassy part of the refrigerator door could go translucent so you can interact with it like a smart TV or a computer. It also got a smart AI assistant to help stock up the refrigerator when something is about to run out. In this scenario, normal people wouldn't buy this refrigerator since it's too expensive and luxurious. Wealthy people though could buy this refrigerator without blinking twice.
If Sears targets the rich, then its business model would be completely different than before! The stuff Sears needs to carry in the store is going to be totally different than before. Furthermore, when targeting the rich Sears may not even need to care about being competitive against other players at all. How come? I think buying luxurious stuff is an experience! A few clicks of the mouse through online stores won't get you the experience! Instead, I can see rich people would drive their supercar or Rolls Royce to Sears, getting greeted by super friendly and helpful staff -- feeling like a king when buying something -- and feeling like a king when leaving the Sears store afterward. Such an experience you would never get from online stores or from stores that cater to the middle-income class. Sears can go this route to stay profitable even though Sears won't be competing against players such as Amazon.
Of course, there is always a third route which is to use the old model but provide better customer service. Nonetheless, I don't see how Sears can stay competitive and relevant when people don't have the need to go to Sears. Sears could learn from Kohl's even though Kohl's is just a retailer of clothing. Why? I think Kohl's is really good at attracting me to buy clothes from its online store! Kohl's got discount programs such as Kohl's Cash, and these programs somehow encourage me to spend more. Although Kohl's doesn't provide free shipping unless you buy more than $75 worth of items (if I'm remembering this correctly), this somehow encourages me to spend more than $75. Kohl's always announced a new clearance sale, and so it's like Christmas all over again. If Sears can learn how to give out discounts as Kohl's does, I think Sears can begin to become relevant in no time. Nonetheless, Sears must carry the stuff that when giving out discounts does make sense for people to care to buy. Yep, even on discount, unwanted stuff won't get sold.