Sears emphasizes full-line stores

Carole Sloan, Staff Staff, May 14, 2001

HOFFMAN ESTATES, IL — Improving the performance of its full-line stores is the number-one priority for Sears management.

The company is undergoing a major reassessment of these stores, and expects to have its strategy in place this year, said Alan Lacy, chairman and ceo, at the annual shareholders meeting here last week.

The hardlines side of the business already has been identified both in terms of emphasis, growth potential and areas to de-emphasize. The apparel side is still under analysis.

Along with the merchandise reassessment, Sears is developing a new marketing program that will launch close to Labor Day, Lacy said. The thrust of the campaign will be to "position Sears as the place to shop and will market the entire store" vs. previous campaigns that focused on parts of the store, he explained. "The campaign will emphasize the Sears brand."

Beyond the full-line stores, Sears is putting its muscle behind The Great Indoors, its direct-to-consumer business and the expansion of its proprietary Sears Mastercard, Lacy told shareholders.

The Great Indoors and the direct-to-consumer business were given stellar visual presentations before the meeting. The new website for The Great Indoors already is garnering strong response, said Bob Rodgers, president. The merchandise offered is a streamlined version of the in-store assortment with one of the priority criteria — UPS-shippable. The website assortment is bought separately from the store inventories and is housed in the division's third-party fulfillment center.

Early analysis of the orders on the website show that 60 percent of the business comes from the four existing markets plus Chicagoland, with 40 percent coming from markets where there are no stores, Rodgers said.

In direct-to-consumer, Sears has combined its in-house and licensed catalogs, its Sears website and its consumer services under the direction of Dennis Honan, vp, general manager, Customer Direct.

This division mailed 160 million catalogs last year, and this year will begin distributing the catalogs in the stores.

While the merchandise in the catalogs is different from the full-line stores' mix and utilizes different suppliers, Lacy remarked: "There have been no significant problems with the different merchandise. The catalogs clearly say 'shop at home,' and we will accept returns at Sears stores."

While the Sears website has limited merchandise offers, primarily in hardlines, Lacy noted some important cross-overs for the full-line stores. The website, he explained, influenced 10 percent of the in-store appliance sales. Five percent of the appliance sales would not have occurred if the customers had not shopped the website, he added.

Additionally, 5 percent of both the in-store lawn and garden and home electronics sales were influenced by consumers shopping the website.

The Sears Mastercard program, Lacy said, will issue eight million new cards this year.

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