Format No Longer Essential to Sears

Discussion
Feb 23, 2006
George Anderson

By George Anderson


The Sears Essentials banner has been rendered obsolete.


Sears Holdings Corp. announced yesterday that it was bringing to an end its one-year experiment with the Essentials format and will turn 50 stores currently under that banner and 14 other Kmart locations into smaller versions of its Grand format in the near future.


Sears Essentials stores are typically smaller than Grand locations with a range of 80,500 to 130,000 square feet, compared with Sears Grand units that go as big as 210,000 square feet.


The renamed stores will be remodeled with upgraded flooring, fixtures and signage. The cost based on past estimates given by former CEO Alan Lacy could be up to $4 million per store.


Sears Grand convenience food section

The Grand format stores sell the same merchandise as full-line Sears department stores with additional departments, including convenience foods, pharmacy and music.


Sears spokesperson Chris Brathwaite told the Chicago Sun-Times that the company came to the conclusion that it had one format too many. “We didn’t need to have Sears Grand, Sears Essentials and Sears,” he said.


Neil Stern, senior partner at McMillan/Doolittle, said it will take more than a name change for the store to be successful.


“From an efficiency stand point it doesn’t make sense to have two names out there,” he told Crain’s Chicago Business. “Grand is probably the better name, but neither one has established any brand equity. At the end of the day, it doesn’t matter what name they call it, it’s what they’re going to sell and how they promote it that makes the difference.”


Mr. Stern said Sears has the opportunity to learn from the mistakes it made with the Essentials stores. The format failed, in part, because the stores were basically Kmarts with Sears brand products in them, he said. 


Moderator’s Comment: What lessons can Sears gain from its failed test of the Essentials format? What will it have to do with the smaller Grand format
stores to be successful?

George Anderson – Moderator

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7 Comments on "Format No Longer Essential to Sears"


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Mark Lilien
Guest
15 years 11 days ago

The Sears team deserves to be congratulated for getting out of a mediocre business. Many retailers pursue mediocre strategies year after year, never making decent profits, fooling themselves that they can triumph, when all they’re really doing is wasting time. The world has way too many undistinguished retailers who’d benefit more by exiting than continuing to struggle. “You have to know when to hold ’em, and when to fold ’em.”

Don Delzell
Guest
Don Delzell
15 years 11 days ago
There are two case studies of interest here, and they demonstrate the ends of the competency spectrum with regard to prototype or format design, development, testing and implementation. On the one hand we have Toys R Us, notorious for rolling out a new prototype every 6 months. Despite outsourced design, state of the art fixturing and layout, and other costly decisions, none of these generated a significant return on effort, let alone investment. The other hand has Best Buy. BBY uses sophisticated modeling and information analysis to construct customer centric format modeling. They then test the assumptions built into the modeling, and tinker with the real world practical implementation until the results are sustainable and scaleable. What does Sears do wrong? Everything. The initial concepts are flawed, have no significant competitive advantage in the marketplace and serve no real observable function in meeting consumer needs. Compounding the error are decisions to roll out without adequate testing and analysis, coupled with horrific execution and management. Is this overly harsh? Sears Holdings Executives: prove me wrong. Tell… Read more »
Carol Spieckerman
Guest
15 years 11 days ago
The Sears Essentials store that I walked several times impressed me quite a bit. The apparel department in particular was a real departure, with nice flooring, perfectly-arranged great-looking fashion (no joke), displays that really called out their private label updates, clean, modern “un-mass” dressing rooms (a BIG advantage going up against the big guys these days), and an understandable, easy-to-shop layout. That said, I was also shocked at how few customers were in the store – it felt like a museum. Sears Essentials is unnecessary, particularly now that Sears Holdings has begun to make definitive decisions regarding which brands will go where (Kmart vs. Sears) and with Lisa Schultz creating a real point of view in apparel. I’m sure Sears learned a lot from the Essentials rise and fall just as Wal-Mart no doubt learns daily from their prototype stores here in NWA and strategically takes winning ideas forward into select stores around the country…proving that you don’t have to create an entirely new concept in order to get new information about what works.
Craig Sundstrom
Guest
15 years 11 days ago

If only Sears could generate sales growth the way it generates headlines.

Sears needs to focus on one idea: does it want to be a “de-partment store” (however you wish to define that term), or does it want to be an also-ran in the general merchandise category? And for all the effort that’s apparently going into inventing round, square, triangular and other polygonal wheels designed to fill every possible niche, it’s hard not to imagine Mary and Jane Consumer having a conversation along the lines of:

“[M]I was grocery shopping at Sears… [J] Sears? [M] Yeah, my Sears carries groceries…[J] Really? I’ve never heard of that…”

David Livingston
Guest
15 years 11 days ago

This just further proves Sears does not have the first clue in what they are doing. It seems every few months they try to reinvent themselves. I’m sure they will make headlines with their next brilliant idea, hire a few MBAs and do it all over again. Then get that stock analyst to ring his bells and whistles and tell us how great they are doing.

George Whalin
Guest
George Whalin
15 years 11 days ago

I agree with David. The Sears Essentials concept was flawed from the beginning. So what are they going to do now…convert these locations into baby Sears Grand stores to go with their biog Sears Grand stores? They still haven’t shown the Sears Grand concept is a viable idea and now they’re going to open these stores with an abbreviated merchandise selection. This company is in bigger trouble than they know. If it wasn’t for their inflated stock price that’s obviously being propped up by the value of their real estate, they would be gasping for air.

Mark Barefield
Guest
Mark Barefield
15 years 10 days ago
The Sears Essential as originally proposed NEVER HAPPENED. Instead of taking the best of both Kmart and Sears and giving customers a single clean well staffed store with Craftsman, Kenmore, Joe Boxer and particularly Martha Stewart brands- the Kmart customer went into their local store and found all the Kmart brands gone and replaced by expensive Sears products. As one might expect the customer was less than happy and voted with their feet- foot traffic and sales of remodeled Sears Essentials were less then when it was a dingy old Kmart. Slapping a new sign on the door and rearranging the aisles will not do anything for the new Sears baby Grands either. Although the focus of this thread is Sears Essentials, I might add that the mall-based stores are feeling non-essential as well since the staffing model now calls for fewer associates, there is less inventory on hand to sell, and the capital expenditure budget to upgrade the mall locations is a non-priority to the current ownership. Can you see a “Real Estate for… Read more »
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