This week saw the news of the Sears bankruptcy filing, amongst falling sales and rising debt. Their Canadian division closed in January of this year, and it always felt the parent company wouldn’t be far behind.
Failure to adapt to the changing ways customers preferred to buy – online, mobile research, frictionless shopping – as well as the inability to attract a younger audience seems to have sounded the death knell for this once-unstoppable giant.
In this week’s episode of Marketing on Tap, we look at how Sears is just the latest in a long line of major retailers to fall to the online onslaught of Amazon and others, and ask what retailers need to do to stay relevant and profitable.
Settle back and enjoy this week’s topic, brought to you in the usual unscripted manner that you’ve come to expect when Sam and Danny take the mic.
If you prefer to listen on the go, the audio version of this week’s episode can be listened to below.
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Transcript:
Intro: Welcome to Marketing on Tap. A weekly podcast in which marketing pros and authors Sam Fiorella and Danny Brown serve up the latest marketing hot topics, campaigns, and trends all washed down with a great craft beer. Join in for the fun as they debate the pros and cons of the topic of the week, while featuring popular or up and coming microbreweries. Topics include influence marketing, brand campaign successes and misses, customer advocacy programs and marketing challenges facing businesses and agencies. It’s the marketing podcast to listen to for CMO’s, senior sales executives, and key decisions makers at mid to enterprise level organizations and with their good nature bashing into each other, each episode promises to entertain and education in equal measure.
Welcome to Marketing on Tap.
Sam Fiorella: Welcome back everybody to another episode of Marketing on Tap. This is my mate Danny Brown. I’m Sam Fiorella and today, we want to talk a little bit about retail, retail therapy. What the hell is that?
Danny Brown: This is my 1972 era-
Sam Fiorella: It’s a can opener.
Danny Brown: It is a can opener, but in Scotland, this is a bottle opener. It’s a low budget show. We always say a low budget show. So, this is our bottle opener.
Sam Fiorella: Soon we’re going to be chewing those off with our teeth. Anyway, we’re talking about retail today because we just saw an article about Sears in the United States, which was titled, “Why Sears Could Never Last and What Other Brands Can Learn From the Iconic Retailers Demise.” Here in Canada, Sears is already essentially shut it’s stores and so, we want to talk about what is it going to take for a retailer, brick and mortar retailer to stay afloat these days in the face of online competition, but as always, Danny is pouring something that looks just outstanding.
Danny Brown: Oh yeah. So, this [inaudible 00:01:59], this is the Haliburton Highlands. I want to put my reading glasses on. I’m getting old.
Sam Fiorella: You are getting old.
Danny Brown: I am getting old, yeah.
Sam Fiorella: Your 50th birthday is coming up.
Danny Brown: Coming up in about four days, five days time.
Sam Fiorella: Yep. Over the hill my friend-
Danny Brown: So I do need glasses. Anyhoo, this was given by our friend Bill Smith, who’s down your neck of the woods.
Sam Fiorella: Yeah. Thank you Bill.
Danny Brown: Another craft beer aficionado and this is the Haliburton Highlands Brewing Coffee Porter. It’s got a really low IBU. I’m going to go jump on the website actually, it’ll be easier.
Sam Fiorella: Did we do a Haliburton one already? Oh yeah, we did-
Danny Brown: Yeah-
The IBU’s a really low IBU. It’s not a strong beer. It’s a 5.3 and what I’ve done is I mixed up the normal caramel chocolate and I’ll add flavors with an English style hops. So, Rob, you might like the English style hops and then the Coffee Porter got a local cold brew rusted on site at Abbey Gardens by a friend at Country Coffee next door to [inaudible 00:02:54]. So, any who, it’s a nice season oak, Coffee Porter.
Sam Fiorella: We’re getting to that time of the year. Cheers guys.
Danny Brown: Cheers.
Sam Fiorella: Robbie, cheers.
Danny Brown: We can smell coffee.
Sam Fiorella: Oh, I like that. First of all, I take coffee intravenously. So, that’s already a win on my books. I like that. Thank you Bill and for the rest of you that are watching, if you want to send us beer, like Bill did, please feel free to send us beer. What should we be trying? This is fantastic.
Danny Brown: So, yeah, this is really good. You can’t really, you can taste the coffee. It’s not overpowering. It doesn’t take away from the Porter and you can really get the chocolate, a dark chocolate taste there-
Sam Fiorella: Very nice. It’s a whole meal. It’s like a Guinness, it’s a whole meal in and of itself.
Danny Brown: Yep.
Sam Fiorella: All right. So, Sears, why did they die? Let’s talk a little bit about Canada first because we have some personal experiences here with that and in the past, they had been a client.
So, I’ll start I guess and I can talk about the audience. Sears is iconic. I remember as a kid, getting that sears wish book at Christmas time. I used to live for that thing. Getting those, it was a monstrosity, it was a telephone book in thickness and I’d go through it and go right to the toys, no, not the bras and underwear’s section. I know that’s what you’re thinking. I went right to the toys and I would start highlighting everything I wanted. My family would buy me for Christmas. It was a big thing.
So, Sears is really ingrained into my memory, into our culture, into my history. All good memories of Christmas and family and yet, it didn’t survive and of course, there was a couple of nails in the coffin in my opinion, but the real thing here when it realized that it had been, the American company sold off the Canadian division, then it got sold a second time and then an investment company came in and bought it and they tried. They had some interesting ideas, but they just couldn’t get that relevancy back. At the end of the day, with all the customers that I interviewed and even on it’s final days when it was closing down and they were selling everything for nothing, I went in and what did I notice? There was nothing but senior citizens walking this place.
They tried to rejuvenate the brand, they brought in lower cost fashion, high fashion stuff, racks really high, very colorful, Drake was playing really loudly over the speakers. They tried to go with a younger, hipper look to bring in a bit of a younger audience, but even when they were getting rid of all that stuff at 50 and 60 and 70% off, there was nothing but senior citizens in there.
I talked to one of the sales person and he said, “Yeah, we’ve yet to see a young person come into this store.” So, they just failed to make that transition.
Danny Brown: Right.
Sam Fiorella: Into the audience, but did they even ever stand a chance is the question I want to ask you or is that younger audience just online?
Danny Brown: Yeah, no. I knew a guy who worked in the advertising department at Sears during the time of the transition-
Sam Fiorella: Wow, okay.
Danny Brown: And he mentioned the fact that they really [inaudible 00:06:08], Sears in the U.S. is different but Sears made it really hard to make that transition to brick and mortar retail and sending out the catalogs and the flyers and everything like that to digital advertising and going online. Their SU and their paper click advertising budget was barely minimal at that time and they were trying to make that transition. So, obviously, as more people and especially the younger audience, you see they went and tried to go after, if they’re online and you’re sending out mailers, etc., there’s a big disconnect there right away and you can’t force the young audience to come in just by playing Drake on the stereo, loud speakers.
Sam Fiorella: Yeah. Well, the thing is, what I noticed, I agree with you, what I noticed is that they were … They didn’t come up with anything new. They were mimicking successful retail strategies of other companies that were already selling to that audience. I’m scanning through this, the article that I saw on Ad Week on Sears in the United States and the co-founder of Meta Force, Allen Adamson is quoted here saying, “Sears didn’t reinvent the business. You have to treat these things as start-ups, not as a rehab project.”
Danny Brown: That’s a great quote.
Sam Fiorella: Right? And the reference here is that other people have come in, taken it over, new CEO’s have been put into place to try and save the company, but they just tried to go through a rehab process. How do we breath life back into this thing? As opposed to breaking down the model, deconstructing it and coming up with something completely new.
Danny Brown: Right.
Sam Fiorella: I know Robert, who’s our producer sitting over there, wrote a blog post before Canada or when there was rumors that the Canadian Sears was going to go down. Wrote a really interesting article, which is up on SunsetMarketing.com still, where he suggested that if you really want to reinvent the wheel as opposed to just mimicking what other retailers are doing, how about going online, selling online, but maybe offering it as an auction instead of just selling regular products? You’re not sure you want to buy right now, maybe place a bid.
Danny Brown: Right. Almost an offline eBay.
Sam Fiorella: Like an offline eBay. You can do that in the store. Maybe using mobile technologies. You go in, you see something you like, scan it, place a bid on that product if you’re not ready to buy right now and you never know.
Danny Brown: Yep.
Sam Fiorella: Right? I’m not sure how successful that would have been or not, but that is a great idea of deconstructing retail. Turning it into something completely different and going to market in a little bit of a different way. What else a retailer do today to combat the Amazon’s of the world? To really break down the model?
Danny Brown: I like what Staples is doing actually because I thought Staples was going to be another one that disappears. Staples-
Sam Fiorella: Yeah, and they’re still going strong.
Danny Brown: They’re still going strong and they took it reversed a little bit. You ordered online and you pick up in the shop in two hours.
Sam Fiorella: Yeah.
Danny Brown: So, you don’t have to worry about you want to be home to get it, go to the post office to pick it up, [crosstalk 00:09:10]. You order all your stuff online. It’s cheaper to buy and it’s delivered to the store, well, it’s ready at the store to pick up, but basically within two hours, which I think is awesome. It’s mixing the online trend of Amazon with the brick and mortar of a Sears, maybe not Sears, but I like that idea that we tie it again to Robert’s idea where you could actually go into this bartering system online and then go into the store to pick it up once your bid has been won for example. So, it’s another way you could maybe, you know.
Sam Fiorella: Well, definitely that online, offline interaction, I think definitely needs to be augmented.
Danny Brown: Yep.
Sam Fiorella: Some of the retailers that I’ve worked with in the past or even deployed these strategies is that in every bag that you walk out of the store with, there’s some call to action to drive you to an online experience.
Danny Brown: Yeah, it’s normally, “Tell us how we did for a 500 gift card.”
Sam Fiorella: Yeah and they’re still doing that if you go to Home Depot or something right now and on the receipt, fill in a survey and you get that and everybody’s doing that. So, that was one way to start changing the model, but for me, what we were doing back then was not only asking for a survey, we were saying, “If you come online, shop with us online and you’ll get a 30% discount on these products, which happen to be related to something that I bought.” So, for example, if I bought a printer, if I went into a Staples and I bought ink for my printer, if I bought it online the next time within the next 30 days, I would get a 30% discount if I bought it online and whether I picked it up in store or had it delivered, but then when I’m online, giving me something that encourages me to come back to the store. So, for example, if there was ink that I was buying for my printer, clearly I have a computer, why not invite me for a live how to spam proof your computer or add security to your computer?
You know? Set up a live webinar or seminar, excuse me, physically that people who buy online drive you into the store. Essentially, that online, offline engagement, there’s always one leading to the other, which builds a holistic relationship with the client and loyalty then is built in.
Danny Brown: Yeah, exactly. Well, Apple kind of does that with the workshops that they do, right? You get a new Mac, they’ll put workshops on your local store and you go down there. Home Depot does the same?
Sam Fiorella: Home Depot. Yeah, that’s right.
Danny Brown: Yeah. So, yeah, it’s ways to mix and I think that’s the key.
Sam Fiorella: Yeah, I like that idea and again, I think we referenced Apple in a previous show that we’ve done. I forget which episode it was now, but if you really look at Apple, Apple retail stores sell more per square foot than any other retailer in the country, which is pretty amazing when you consider how sparse those stores are and they’re so focused on service, there’s not a lot of product there and they don’t have the widest range of product when you compare it to a Best Buy or something like that.
Danny Brown: Yeah, exactly.
Sam Fiorella: And yet, they sell that kind of volume when you can just as easily buy the product online and have it shipped to your house.
Danny Brown: Yeah because you know what it’s like to buy in Apple.
Sam Fiorella: You buy an iPhone is an iPhone is an iPhone. You’re going to buy it regardless of what’s being featured in the ad or going to add to it in the next month. So, I think that’s really an interesting look at it. It’s the experience and I think that retail today has to go toward experiential marketing, just experience in general. Not just through it’s marketing, but for the entire customer journey that I think is going to be very important. Another way of looking at that is consider the customer lifecycle, that’s something we do a lot of times. How are people first being introduced to your brand before they make a decision? What are your touch points when they’re making a decision and then what are you touch points after they’ve made the decision to make sure that you’ve got their loyalty and then their advocacy? So, one of the things that I know retailers are really focused on is getting you in the door.
Danny Brown: Right.
Sam Fiorella: They get you in the door and then they’re hoping that you’re going to buy however many products and then there’s the whole planigram about how you have people walk to your store so that they pick up five or six items on the way to what they really want. Right? So, those are all very traditional marketing concepts, but I think it needs to be broken down further into the buyer lifecycle and how do we engage people across that entire buyer life cycle? From awareness, which might start online, might start at a trade show, might start at some kind of event where you engage them, work with them, to help build their business. Maybe it’s content marketing, maybe it’s online tutorials. For me, I always wondered why is it that Staples, which sells you office supplies, does nothing to improve your working environment?
Danny Brown: All right, yeah.
Sam Fiorella: They’ll sell you a stapler-
Danny Brown: But that’s it, right?
Sam Fiorella: Yeah, but okay, well they do. They of course are going into more services. They’re offering computer repair and they will come to your home or they will come to your office now with their Geek Squad or-
Danny Brown: That’s Best Buy.
Sam Fiorella: Best Buy. Geek Squad. I don’t know. I forget what it’s called but Staples-
Danny Brown: Office People.
Sam Fiorella: Office People?
Danny Brown: It’s something like that. Should be.
Sam Fiorella: Well, you want them to steal that if that’s what it is.
Danny Brown: It’s not trademarked.
Sam Fiorella: So, why not start to offer, you know how LinkedIn bought Linda, that offers those business seminars. It’s not just business seminars or those how-to videos. Why not create a series of how to improve profitability? How to improve your zen of your office? How to improve productivity in your physical space? We work right now. I just bought a company that optimizes or they’re selling their services of optimizing workspace.
Danny Brown: Right, based on their own [inaudible 00:14:43].
Sam Fiorella: Because that’s what they’ve learned how to do really well is optimize space. So, now what they’re doing is selling that service. We’ll come to your office. You own your building or you rent an office in another building, we’ll sell you the service of coming in optimizing your space for your so that it’s the most functional for your employees to get the most productivity out of them. Great example.
Danny Brown: Yep.
Sam Fiorella: Now, why can’t Staples? Staples. If you’re going to use this, you better pay me some kind of royalty, but why don’t they come up with some kind of online or other type of service that gets so ingrained into how businesses operate that selling them product is secondary, you know what I mean? You’re making money or at a minimum, you’ve developed such a relationship with them because of this free service that you’re offering or free content that you’re offering that they’re just automatically going to buy product and more product from you, right?
Danny Brown: Yeah. Well, just an add on and I know one of the big things you mentioned about productivity at home and how you’re set up and one of the big things is being comfortable, etc. So, you’ve got the right back-
Sam Fiorella: Mm-hmm (affirmative). Yep.
Danny Brown: So, it could, Staples or something like that, we keep mentioning Staples. By the way, they could give you a desk or something or an online course, like you mentioned. So, you’re setting up the new laptop, you’ve bought the office chair, you’ve bought the desk you’ve bought at Staples. You throw this on and it starts to use the camera on your laptop to get your eye level, your seat level and say, “This line should be your chin, this line should be your eye, this should be where your chair should be. You’re good to go.”
Sam Fiorella: Excellent idea.
Danny Brown: Something like that.
Sam Fiorella: Yeah and again, it’s very interactive with and this could all happen off their eCommerce website.
Danny Brown: Yeah, right?
Sam Fiorella: So, you’re already there. Oh, I need some staples. I need a stapler, I need some paper-
Whatever it is, but again, and if they eventually get enough of an audience, they could start selling access to those types of tools. Generate additional revenue for them the way that they’re doing physically in store with their print shop and their computer centers, right? So, that makes a lot of sense.
The other thing that I’m thinking is they should really be looking, all retailers in general, should be really looking at some type of 3D or other experiential event. So, for example, in, I think I read an article of a fashion retailer that was doing something with augmented reality-
Danny Brown: Make up.
Sam Fiorella: Yeah. You walk in and you go to a make-up counter, that’s a great example. You hold up your phone or something, you look inside of a mirror and then you can see your face with different looks.
Danny Brown: I’ve tried that.
Sam Fiorella: Did you?
Danny Brown: What-
Halloween. Just my look for Halloween.
Sam Fiorella: Did they have one where they automatically give you hair? Different hairstyles?
Danny Brown: They do. They’re called wigs.
Sam Fiorella: But you know, something like that. I know you can do that with glasses, right? If you want to buy glasses, you upload a picture of your face and then they’ll put five or six frames on your face and you can see the one that you like.
Danny Brown: Mm-hmm (affirmative).
Sam Fiorella: That’s happening online but you never see that happening inside the retail centers or very few. I don’t think I’ve actually physically seen one, I think I’ve heard of a couple that do some type of augmented reality when you walk in. I mean, way back in the day, 150 years ago when I was younger and I actually had a retail store. I had a chain of retail stores in fact, in fashion industry, before I got into marketing and customer experience and one of the things that we did as incredibly simple back then before we even had a computerized cash registers, that’s how old I am, is we would do fashion shows.
Danny Brown: Right.
Sam Fiorella: I wouldn’t wait for people to come into the store. I would have fashion shows with every new line that came in within the store and I would invite all of my regular customers to come in at a specific date and time.
Danny Brown: So, a pre-launch kind of thing?
Sam Fiorella: That’s right. They weren’t my designs. I was retailing other people’s designs. It was business suits. Right? Men’s and ladies business suits is what I was selling at the time. What we were retailing and so, we positioned it as come in, you’ll get the first crack not only seeing what the new trends are that are coming in, but we’ll also give you advice.
Danny Brown: Right.
Sam Fiorella: How to style the new suits and for men and for women, what shoes should go with what for your business environment. So, we were helping people with their business persona, their look, their style as they went into the office dressed for success, that whole thing back then. That’s when big shoulder pads were still a thing in the ’80s. So, I mean, that is old school, there is nothing new about that today, but even back then, I realized that you just can’t sell.
Danny Brown: Right.
Sam Fiorella: In a retail environment. You have to create some kind of experience to differentiate yourself.
Anyway, we’re getting the bell. So, last call.
Danny Brown: Until the bell Steven.
Sam Fiorella: Yes, thank you Steven. We have to keep thanking him because that was all the way from Scotland this Bell.
Last thoughts. What should retailers do if they’re going to either they’re an online store and they want to move into brick and mortar or they’re a brick and mortar and they want to just stay alive?
Danny Brown: Yeah. Well, I think you have to look at the audience you want to go after. The audience you’ve got now is great. That’s got you where you’ve got to, but the audience you need next is what’s going to keep you sustained for the next five, 10, 15, 20 years.
Sam Fiorella: Sure.
Danny Brown: So, see where these guys are, what they’re buying, what are the trends, what the behaviors are like and see how you go after that. So, is it whether you go online or a bigger online presence, is it mixing the two together? Is it trying to bring technology into your store where people can see what they’re buying it before they actually wear it or take it home or whatever? Like landscapers, they’ve got the CAT programmers, the auto-CAT programs and you can see what your landscape’s going to look like before this big 20, 30, $50000 project is in your garden. So, something like that. These guys know technology and how it helps their brick and mortar I guess. So, mix the two and understand again who your future audience is and what their-
Sam Fiorella: That goes back to the comment about don’t try and rehab your business.
Danny Brown: Right.
Sam Fiorella: Reinvent the model completely and I think that would be the one take away that I’ve pulled out of this conversation is that do not try and slap lipstick on a pig. You know what I mean? It’s still going to be a pig. If it’s not working, you have to deconstruct it completely, break it up and come to the market with something so radical, so new, so different. Take a look at every time Apple comes out with a new phone. If there’s only one small feature, everybody criticizes the company. There has to be something truly innovative to get that buzz and to get people coming back so that you can stay on that leading edge.
Danny Brown: Yep.
Sam Fiorella: So, that’s what I’ve taken away as the one thing. I hope that’s helpful to those of you that are following, whether you’re online or offline or considering-
Danny Brown: How do they follow offline?
Sam Fiorella: Sorry?
Danny Brown: How are they going to follow offline?
Sam Fiorella: No. Whether they have retail stories.
Danny Brown: Oh, you’re talking to the viewers.
Sam Fiorella: Shut up. No, whether they have retail. Do what I mean, not what I say. You’ve known me long enough, you should figure this out.
Danny Brown: Yeah.
Sam Fiorella: Yeah, whether you’ve got an offline retail or online retail, we’re hoping that this helps you or if you’re considering getting into the marketplace. Thanks for watching or for listening. If you are a fan and you’d like to be alerted, please don’t forget to subscribe and/or hit the like button. Add your comments in the bottom. We’ll be happy to engage with you online that way as well.
Until the next time, next week, thank you very much folks. Cheers everybody.
Danny Brown: Cheers guys.
Sam Fiorella: Cheers Robert.
Danny Brown: Cheers.
Sam Fiorella: Cheers.
Outro: You’ve been listening to Marketing on Tap with Sam Fiorella and Danny Brown. If you enjoyed this episode, make sure to subscribe so you don’t miss the next one and please, feel free to leave a show review. That’s always worth a cheers.
The post Marketing on Tap Episode 15: Sears Bankruptcy, Online Shopping, and the Death of Traditional Retailers appeared first on Sensei Marketing.