Will Consumers Gofer Sears Selling Groceries?

Discussion
Jun 15, 2010

By George Anderson

Many have tried to make it big in the online grocery business and most have failed. That certainly hasn’t stopped others from trying and the latest to give it a go is Sears Holdings.

According to a Chicago Tribune report last week, the owner of Sears and Kmart is testing its own online grocery business in lower Manhattan and out in the Hamptons on Long Island, New York. The Sears website adds that the service is available in the western suburbs of Chicago, and in the Boston and Washington, D.C. markets.

The service is an extension of the company’s mygofer.com offering. Sears Holdings launched mygofer to bring together the best of a web-based service and a brick and mortar operation. Consumers go online to order items from the service and then pick them up at a local drive-through. 

“When customers want something, they want it today and they want it now,” Imran Jooma, senior vice president for e-commerce for Sears Holdings, told attendees at the Internet Retailer trade show. “So we center our efforts on giving them choice, convenience and value. The choice to get whatever they want, whenever they want it and however they want it.”

Price is also important, according to Mr. Jooma, who cited Sears’ 110 percent price guarantee. 

“You don’t have to make sure you have the right price, you will,” he told the Internet Retailer conference audience. 

Sears’ Food & Grocery item page includes the message that its service “makes the express lane look like molasses.” It boasts that local pickup and delivery from mygofer.com is “the fastest way to get your groceries from your cart to your countertop.”

While he declined to confirm if mygofer departments would be set up in Kmart stores or in some other type of facility, Mr. Jooma told the Trib, “There will be more mygofers.”

Discussion Questions: Do groceries make sense in the context of Sears Holdings’ overall e-commerce strategy? Does the mygofer pickup option make it more likely Sears will succeed with online groceries than others following a delivery-only model?

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34 Comments on "Will Consumers Gofer Sears Selling Groceries?"


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Ryan Mathews
Guest
10 years 11 months ago

When you don’t know where you are going, any road will get you there.

Sears is flailing around for an identity and a viable market position.

Groceries aren’t the path to heaven.

Dr. Stephen Needel
Guest
10 years 11 months ago

What Sears knows about the grocery business could fit on the tip of my Craftsman screwdriver. What they know about delivering groceries would fit on the head of my Craftsman awl. This is such a bad idea.

The grocery industry has not really figured out home delivery yet and whether there is even consumer demand for home delivery at sustainable levels. Sears has nothing new to offer here.

David Livingston
Guest
10 years 11 months ago

Let me see here…some of the best retailers have tried online grocery shopping and failed. Now the country’s worst sales per sq. ft. big-box retailer is going to give it a try. I think the outcome is obvious. This is probably the last we will hear of this and it will quietly go away along with the execs in charge.

Gregory Belkin
Guest
Gregory Belkin
10 years 11 months ago

Conceptually I think it is a good idea but I think they are going to have a lot of work to do to associate the Sears name with grocery. The article mentions that they are active in the Boston area. I have been involved with online retail for a while now (and I live in Boston), and I have never heard of this service. Again Sears/Kmart has a lot of work to do to improve their standing and reputation…it’s worth a shot but they must be very strategic about how this is fully ramped up to market.

David Biernbaum
Guest
10 years 11 months ago

I have not had a great deal of confidence in anything offered by Sears or Kmart for more than 15 years or so. But the Gofer online grocery idea actually inspires my imagination, especially for the markets they have chosen in places like Chicago suburbs, Washington D.C. area, Boston, etc. Yes, I like the concept and I believe it can work whereas other online grocery ideas have failed. But it all comes down to how well they plan, execute, and deliver (literally!).

George Anderson
Guest
10 years 11 months ago

The Chicago Tribune article mentioned the grocery service was launched in the New York area over Memorial Day weekend.

Anne Howe
Guest
10 years 11 months ago

In theory, grocery delivery is always a convenient idea for urban areas. But I still believe that shopping in a market or store for food is actually an enjoyable, sensory experience that provides satisfaction that trumps the convenience factor for most shoppers.

Sears might be better served to bundle up tools, supplies and how-to advice for DIY home projects and deliver those to shoppers, leveraging the equity they have spent years building with Craftsman tools. They could help Gen X and Gen Y consumers, most of whom didn’t learn basic home improvement skills, get organized and educated on how to upgrade and maintain their homes.

Marge Laney
Guest
10 years 11 months ago

My first reaction when I saw the headline that Sears was going to start selling groceries online was to cringe and let out an “Oh No!” I have been a staunch supporter of Sears in their attempts to regain their identity by getting back into the businesses and providing the services they were once known for. But, online groceries? That has yet to be done successfully by a focused grocer! I believe they’ve jumped the shark with this one.

Len Lewis
Guest
Len Lewis
10 years 11 months ago

If history has taught us anything it’s that Sears never finishes what it starts. Every idea they come up with is not only a day late and a dollar short (actually way more than that) but there is no follow through. They’re just throwing stuff at the wall to see if anything sticks.

They have missed every golden opportunity–Sears Grand, the home stores, Martha Stewart, and other partnerships. I wouldn’t hold your breath waiting for groceries to be delivered unless it can cut costs of warehousing or transportation.

Justin Time
Guest
10 years 11 months ago

Mr. Bluelight continues to hatch great ideas.

I think the online grocery delivery service through Sears Holdings mygofer.com is something worth exploring.

There are so, so many food deserts in the U.S. where this service could be manna from heaven.

Especially in the Pittsburgh area and other areas which have large concentrations of seniors who don’t drive and can’t get out much, this can offer a godsend.

Bravo Sears Holdings to start this concept. It will be a success because the demand in Pittsburgh, Boston, Cleveland, and other places is out there.

Dick Seesel
Guest
10 years 11 months ago

Ryan’s description (“flailing around”) sums it up accurately. It seems that RetailWire panelists get an opportunity every other week to comment on Sears’ latest venture outside its core competency…the most recent being a laundromat attached to a Kmart store.

It’s one thing to think outside the box and come up with new concepts to drive productivity, but it’s another thing entirely to take on a business like food retail and delivery, which is completely unrelated to Sears’ core business. This idea would make a lot more sense for Walmart, with its scale in the grocery business as well as its mastery of logistics.

Gene Hoffman
Guest
Gene Hoffman
10 years 11 months ago

“Die Hard” Sears seems destined to die hard. Sears’ current motto seems to be: When are first you don’t succeed, try, try, try, try again–as long as Lampert’s Largess prevails–even if many experienced others have already tried it and failed.

Dumb luck, of course, might still prevail for Sears in the process. And with some dumb luck Sears might accidentally hit upon something that finally identifies who they have become today…but Sears shouldn’t hold its breath that food is the path to paradise.

Gene Detroyer
Guest
10 years 11 months ago
This is bizarre. I live in Manhattan and I just went to Mygofer.com. I put in my address and was told that I can order my groceries and pick them up at noon at the Kmart on 34th Street. PICK THEM UP? Do I take a taxi there? Pretty convenient, huh? Or maybe the subway? Then I can lug the packages home. Last night my wife ordered our groceries from Fresh Direct. They were already delivered this morning by 9:30. More bizarre! They are testing in the Hamptons. Does anyone who summers in the Hamptons ever go to a Sears or Kmart? Retailers must get out of the brick and mortar mode. Last week, my baby boomer wife, who ten years ago would not go near a computer, tried the new apparel service offered by Zappos. The next day when she received the wide selection of items she had ordered, she laid them out on the bed and showed me with much glee…”Don’t worry, I am not keeping them all, only two. But, look at… Read more »
Doug Stephens
Guest
Doug Stephens
10 years 11 months ago

Sears bashing is becoming a bigger ticket than the World Cup. But who can blame someone for criticizing Sears when they keep on announcing one silly business initiative after another.

Surely, in the universe of potential strategies, there has to be something more sensible than groceries.

Bill Emerson
Guest
Bill Emerson
10 years 11 months ago

This is beginning to border on entertainment. The Sears management team has now demonstrated that they are unable to find success in their core business and have opted to start trying out things that are both farther from their core competencies (whatever they are) and go farther and farther out into the wild blue yonder.

The exciting part is to try and figure out what’s next on their roster of break-out opportunities. Let’s see, they haven’t tried live pets, mail-order brides, or financial derivatives. What about space travel?

Carol Spieckerman
Guest
10 years 11 months ago

We have blogged extensively about Sears’ recent initiatives including MyGofer.

The larger implications are what have my attention–How Sears’ “outside in” approaches will transform Sears’ retail footprint for one thing…and how other retailers will respond. I found it interesting when Mike Duke, Walmart’s CEO, stated that building the best websites (plural) will be every bit as important as getting store formats (not store environment) right. Who do you think was in the back of his mind?

Cathy Hotka
Guest
10 years 11 months ago

Such a weird idea. The branding is all wrong–this is a little like introducing a new Kellogg’s drain cleaner. And they must be keeping this under wraps–I live in one of the test areas and had never heard of it.

Bill Sinnott
Guest
Bill Sinnott
10 years 11 months ago

Big problem with grocery delivery is perishables. The idea of meat sitting on your front stoop all day pretty much turns off the average shopper. But without perishables, there really isn’t a motivation to use this service…you have to go to the store anyhow. The solution has typically been customer at home delivery (a hassle for working folks), some sort of insulated drop box (expensive) or in-home access to the refrigerator (big security issue).

I can see their interest in groceries…it has driven trip frequency and growth for Walmart and Target. But I doubt direct delivery is the answer.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 11 months ago

Sears has been spreading itself very thin in the past year, expanding its toy, jewelry, health/beauty, etc, assortments through “store-within-a-store” concepts. Now Sears is trying to become an online grocer. I think the company would be better off refocusing on some of its core categories, like appliances and apparel, especially with Wal-Mart recently reporting soft same-store sales.

Anne Bieler
Guest
Anne Bieler
10 years 11 months ago

Another step in the wrong direction. This will not add value to the brand, and likely add confusion for shoppers. Sears has not executed other strategies well–as others have contributed. In today’s economy, Sears can not afford another wrong turn.

Ed Rosenbaum
Guest
10 years 11 months ago

Ryan said it so well in the first post: “When you don’t know where you are going, any road will get you there.” Sears needs to decide who they are when they return to the world of reality. They keep looking for ways to improve revenues; but come on friends, are we really going to have Sears gofer our groceries? I like to think I can think both outside the box or extend the limits of the box. In my more sane moments I can’t think of how this will take off and fly for them. So maybe it is time to return to the drawing board. If the ink has not dried on this idea, maybe they will not have to waste another sheet of paper.

James Tenser
Guest
10 years 11 months ago
I know we’re kind of grocery-centric here at RW, but a glance through the Sears Gofer Web pages suggests there may be a second-level strategy in play. Under the banner, “Marketplace at Sears,” it appears the company is angling to become an online sales and delivery service for local merchants, which would allow shoppers to bundle multiple, disparate purchases into a single drop-off. Now this is slightly far-fetched, but also intriguing as a strategy. One of the lessons learned from past attempts (Webvan comes to mind) to build online grocery empires is that the arithmetic is relentless. Full, dense delivery routes are an essential element of the equation. When vans travel long distances with light loads, the costs overwhelm the net margins. In this regard, grocery purchases offer the advantage of high frequency and relatively large tickets, offset by slim margins. Other product categories may carry higher margins but much lower purchase frequency. Suppose Gofer’s strategy is to become a “common carrier” for multiple local merchants. It could offer very low delivery costs for “ride-along”… Read more »
Bill Bittner
Guest
Bill Bittner
10 years 11 months ago
I often think of the introduction of online grocery shopping against the introduction of the shopping cart for self-serve supermarkets. The story goes that retailers had to hire actors to push carts around the store in order to both teach consumers and take away any uncertainty. Along this line, shopping carts were a “win/win” for retailers and shoppers. Retailers saw greater sales with lower costs and consumers learned how to get their shopping done more quickly. Online shopping represents a shifting of costs from an indirect convenience cost of the consumer to a direct fee or service cost of the consumer or retailer. Someone must pay for the added service and the perceived benefit must exceed the cost. As we work to make the store a more exciting place, we can’t expect the consumer to see paying a fee or higher prices for delivered product a benefit. I think that time is still way off. The Sears effort is something completely different. Sears is transforming itself into a consumer service provider, still requiring the consumer… Read more »