Saturday, January 28, 2012

Trying to Turn the Titanic: What We Can Learn from Sears

There’s no shortage of experts weighing in on what Sears should do following its announcement last month that it will close up to 120 stores.

I'm neither a retail nor financial expert. But I find Sears’ trials relevant because there is much to be learned from studying second-tier brands and declining brands but also because there are some pretty obvious radio parallels.

Analysts frequently pointed to Sears’ deep, ongoing cost-cutting as a major factor in the company’s steady decline. Others also cited management issues, lack of vision, loss of brand identity, not recognizing the changing landscape, and weak customer service.

Some experts see Sears’ problems as too big and having gone on so long that Wears will be unable to survive. Others who believe Sears can turn things around believe there brand assets that can be leveraged, and customer service can be dramatically improved. And doing both is critical to survival.

Brand Assets

Sears has assets to be sure: Kenmore, Craftsman, DieHard and Land’s End are all strong brands themselves, potentially strong enough to revive the struggling Sears parent brand.

The great Jack Trout recommended Sears “take advantage of Kenmore's leadership, and position it as the No. 1 family of appliances in the end. They should do the same for Craftsman, which is America's favorite brand of tools, by far. Perhaps it's time for a next generation of DieHard battery that dies a little harder. Could their paints use some sprucing up? If they do a good job with their brands, more people will go to Sears.”

The Motley Fool’s Rich Smith noted that “Sears is Craftsman tools –high-quality wares, priced reasonably. Sears is also Kenmore appliances, a way to buy a Whirlpool washing machine (Whirlpool is one of the companies making the machines behind Sears' private label) at a better price. And of course, Sears also has a softer side, as represented by its Lands' End clothing line. At least, that's what Sears was "once upon a time."

Retail consultant Mark Freiman of Focus Management Group, a financial advisory and restructuring firm said, "They have got some iconic brands that if they had the capital behind them and the right merchants in the company, they could be turned around."

Most stations have assets to leverage: a wildly popular talent, a history of listener connectivity, unique stationality, our-of-the-box thinkers, geeks, staffers who excel in social media, a mascot, street team, heritage or newcomer, signal and more.

Take an inventory of your assets. Are famous (or could be famous) for something that’s not presently being exploited? As Jack Trout advises, if you have a meaningful position in the consumer’s mind, market it. Update, improve or reinvent once powerful assets that may be suffering from some tarnish.

Putting heft behind your biggest brand assets pays off.

The Customer Experience

Steve Hoch, a marketing professor at the University of Pennsylvania's Wharton School, was graphic in his description of Sears' brick and mortars telling Fortune Magazine, “The stores look like they are from the Eastern Bloc."

We've heard stations that fit that barren description.

A turn-off in one aspect of our product often hurts another. Shabby stores are damaging Sears’ online business. Same for on air.

If as Jack Trout suggests, an improvement in Sears’ brick and mortar stores could yield in-store time and more purchases, there’s a lesson here for us too.

If our on-air product was a store, what kind of shopping experience are we providing? What percent would be interesting, fun, and welcoming, that extended the experience and created a repeat ‘buyer?’ What percent is dated, cluttered or boring, that shorted the experience and failed to provide a reason to come back? What are we trying to sell that no one cares about?

Identifying and leveraging assets, and providing the best possible customer experience seem like an obvious strategy -- yet they're part of the problem facing the 10th largest retailer in America.

Let’s make sure they’re not our problems, too.

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