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[13 comments]

Sears and Kmart expand store pickup everywhere

July 15, 2014

Last week's announcement that Sears and Kmart were expanding store pickup for online orders to the chains' more than 2,000 locations didn't get a lot of attention because, well, it came from Sears and Kmart.

While the two chains continue to struggle and same-store sales increases seem out-of-reach, sears.com and kmart.com have been bright spots for parent company Sears Holdings. Store pickup, it turns out, has been a big part of the chains' digital success with 60 percent of online orders defined as multichannel transactions. In the most recent quarter, online and multichannel sales were up 26 percent from the same period in 2013.

"We're excited to build on the success of this popular, convenient Free Store Pickup option with 2,000 Sears and Kmart stores, regardless of whether you order from sears.com or kmart.com, and have it ready for pickup in five minutes or less," said Leena Munjal, senior vice president, Sears Holdings. "The service also makes exclusive brands — like Sofia by Sofia Vergara and Adam Levine at Kmart, and Bongo and Outdoor Life at Sears — available for free pickup at hundreds of new locations."

Items available for free store pickup are marked on the chains' websites. Consumers select their preferred pickup location and it is shipped directly to the store. The customer then receives an email confirmation of its arrival and is given three pickup options, all ready in five minutes or less including:

  1. Picking up their order at the merchandise pickup area themselves;
  2. Designating a family member or friend to pick up the purchase;
  3. Having their order brought out to their vehicle.

FINANCIALS:     [NASDAQ:SHLD] [ ]

Discussion Questions:

How effective will Sears' and Kmart's new cross-store pickup program be in building the chains' online businesses? Will it have positive effects on their stores, as well?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How effective will Sears' and Kmart's new cross-store pickup program be in building the chains' online businesses?

Comments:

Maybe they can partner with RadioShack and do a joint ad campaign. Those looking to define "zombie retailer" would have to look to this forced marriage of two once-great brands as perfect example; and yet it limps along.

Maybe in Colorado they could open marijuana stores within a store to boost traffic. Aside from that, and with a CEO approval rating of 30 percent we all wait for how long this saga can continue.

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Bob Phibbs, President/CEO, The Retail Doctor

With 2000-plus long-lagging retail stores, Sears and Kmart are naturally delighted that their online business shows some promise with its cross-store pickup program. But the effectiveness of this program is a promise, not a solution.

As to if it will have a positive effect on Sears and Kmart stores: if you're a stock holder, it will raise hope. If you are in the shopping public, the effect is that those stores still carry the Sears and Kmart logo.

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Gene Hoffman, President/CEO, Corporate Strategies International

I really doubt this will have any meaningful impact. Kmart has to shed its image of being a chain of closed, blighted real estate with weeds growing in the parking lot. For the U.S. population, the nearest open Kmart seems to be getting farther away, while at the same time the nearest open Walmart to pick up online orders is getting closer and closer with new small stores opening. Sears needs to get over being viewed as a retail museum at the end of the mall. I have found two quiet places to go meditate in peace and quiet—the local mausoleum and Sears.

David Livingston, Principal, DJL Research

This is a good move for the online business with limited upside for the actual physical stores.

The company's physical stores have lagged behind others for ease of shopping and presentation—their same-store sales numbers have reflected that. The new store pickup program will certainly provide the opportunity to go into the store. However, once there, Sears/Kmart must make that visit inviting and interesting. The potential exists if it's actually thought through and designed purposefully; local execution will determine the in-store success.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

Sears has had one of the best product store pickup systems for decades, but few customers knew about it unless they purchased a really large item that was difficult to carry out. How many retailers have both the location and capacity to bring merchandise to your car and load it for you?

Store pickup is a productive way to drive traffic to store locations which have seen year-over-year traffic decline for the last decade. The challenge is that the Sears/Kmart online store has to have the selection, value and brands that appeal to today's omnichannel consumers, who can just as easily shop Zappos or a Home Depot.

The real question for Sears Holding long-term is, "what happens at store pickup?" Does the consumer only come to get the item purchased online at a low price, or does their trip lead to other add-on sales from the store?

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Chris Petersen, PhD, President, Integrated Marketing Solutions

It's a smart move, and Sears Holdings seems to be moving faster than some of its competitors in this area. But it's a double-edged sword: Once customers walk into their local Sears or Kmart store to pick up an online purchase, are they going to like what they see? As long as the company's brick-and-mortar business is defined by outmoded stores and lackluster content, this continues to be an uphill battle despite the occasional tactical win.

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Dick Seesel, Principal, Retailing In Focus LLC

Whether or not it has a positive effect on their business certainly remains to be seen. There's a lot more wrong than right with Sears and Kmart right now and I doubt this will have much impact.

The bigger picture though is that today's shoppers research products online but prefer to purchase in a retail store. According to Forrester, half of consumers prefer to pick up orders in-store. Additionally, 75 percent of shoppers want to see inventory availability before heading to the store. And if they can't? A third of these customers are unlikely to visit at all.

Successful retailers like Nordstrom, Macy's and Gap have successfully instituted in-store pickup and it's working, because that's how their customers want to shop them. Sears/Kmart are only doing what's prudent to compete and keep themselves alive—maybe.

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Marge Laney, President, Alert Technologies, Inc.

Its sounding like its having a positive impact, but are online orders growing fast enough to replace what they are losing in-store? If people picking up decide to go into the store, its a win-win because the chance exists for people to keep shopping.

That being said, while curbside pickup helps the customer, I am not sure its going to help drive sales, which is where Sears and Kmart really need the help.

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Bill Davis, Director, MB&G Consulting

Well, the value of these retailers is mostly in their real estate anyways, so they might as well turn those 80,000 square foot buildings into depots.

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Peter J. Charness, SVP America, Global CMO, TXT Group

All of this sounds well and good, but even this opportunity to encourage in-store shopping is being curtailed in the plan, as it is to be rolled out with the "we'll even bring it to your car so you don't have to come in" option. The goal of same-store sales increases must be set in stone with rigid timing schedules for real results. The inclusion of plan components that are designed to get shoppers on the floor of the brick-and-mortar part of the business are constantly missing. And so, sales continue to decline. What a mess.

'gjarnoldjr'

Cross-store pick-up program aside, George brings up a great point: there is little attention being paid to Sears/Kmart by the retail, business, and national media. The positive aspect of the lack of attention being paid to the retailer means they can fix and improve some of the issues that have beset them under the radar. The negative is that nobody will notice any positive changes. Perhaps along with improvements in business processes they should look at ways to raise their company profile.

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Larry Negrich, Vice President, Marketing, nGage Labs

"...Didn't get a lot of attention because, well, it came from Sears and Kmart..."

Can there be any hope when even the narrator starts out with a punchline? Whatever the advantages of this program may be—and a cynic might argue Sears/Kmart likes it because it saves them the extra expense of shipping all the way to someone's house—the problem is very few people make it to the .com part of S/K in the first place...and it's hard to see that changing.

'notcom'

If this announcement means that more consumers shopping at one or the other store will have a location near them, this could be very helpful. This may also make the link between the two stores stronger in consumers' minds. Will it increase sales overall? If consumers have to walk past items of interest on their way to pick up ordered items, sales are likely to increase. Creating traffic in the stores would seem to be a positive way to increase sales.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

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