The One Big Reason Why Sears And Kmart Are Doomed

Between 2000 and 2002, I went to school for my MBA.  I don’t remember too many of the details, but I remember one paper I wrote.  Our assignment was to pick a troubled company and strategize how to fix it.  I picked Kmart.  This was a couple of years before Sears and Kmart merged.

I can’t tell you what I wrote about point by point.  It’s possible that I may have the document saved on an old computer.  Maybe I’ll go look.  But I can tell you that things haven’t gotten any better in 15 years.

Honestly, Kmart, and now by virtue of their 2004 merger, Sears, are a mess.  So why are Sears and Kmart doomed?

The Single Most Important Reason Sears and Kmart Are Doomed

Analysts will through point by point and give a thousand different reasons why this company has continuously failed.  Honestly, thought it boils down to one thing.  One idea.

The company is not great at anything.  

It’s that simple.

To succeed in any sector, but especially retail, you have to stand out.  You have to have an area where you rise above your competitors.  Let’s look at some of the key areas where this is possible, and how Sears and Kmart have failed at each one:

Appeal

A great company has to make themselves appealing.  Shopping at their store (physical or online) has to be something to look forward to.  Sears and Kmart have not delivered this at all.  People may shop there, but there’s no buzz.  There isn’t any enthusiasm.  Simply put, there is no appeal.

Brands

A great store will have brand recognition that is seen as a positive. Think of the Target logo.  Everybody knows it.  When people think about it, many have a positive and happy feeling.  What brand awareness has Kmart or Sears built?  None.  The last time either of them had something like that was the ‘Blue Light Special’ that Kmart was once known for.  Eventually that became a joke, and every revival I’ve seen attempted in the last 25 years has been laughed at.

Selection

A retailer must have a great selection of products to stand out.  Looking at Target, again, they just revamped their entire clothing line.  They dropped many in-store brands in favor of new lines with new products.  They continue to look at what people want.  In addition to delivering the basic products, a successful retailer must stand out in what they offer.  When was the last time Kmart or Sears did that?

The In-Store Experience

A retail store must be kept looking fresh.  Renovations every few years are key so that stores don’t become run down, and it keeps shoppers interested.  But simply remodeling stores isn’t going to do it.  See, over the years I remember hearing multiple times how Sears and Kmart were going to update their stores.  And they did.  But it still failed.  Why?

Because they never did it in a way to stand out.  They remodeled after their competitors did.  And, the remodels themselves were just basic remodels.  People could walk into a recently renovated store and not even realize that it stood out.

Distribution

Customers don’t really notice this except to understand whether the products they want are in stock or not.  For years, Kmart customers were driven away because they were out of popular items.  So, they put in computerized systems.  They installed inventory controls.  Relationships for on-demand delivery with suppliers were improved.  These all sound like great ideas, except, once again, they were installed years after their competitors.  By the time Kmart and Sears finished their upgrades, their competitors were already on the next wave.

It’s Hopeless

Quite honestly, I think Sears Holding is doomed.  It won’t be long before the landscape is free of two once iconic brands.  They are caught in a death spiral, and even if they were to fix everything that’s wrong, I think it’s too late.  People who grew up on the brands have forgotten about them.  People who have never even considered them aren’t going to start now.

I think it’s only a matter of time before Sears and Kmart are nothing more than a page in the history books.

Readers, when was the last time you shopped at Kmart or Sears?  Do you see any hope for them?

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11 thoughts on “The One Big Reason Why Sears And Kmart Are Doomed

  1. This is a nice article. All valid reasons. In my opinion Sears and most other stores are doomed in their current form. Why? Simple. The online model is a better model. Store one product market many places. Stores store(note the pun here) items in many places. Ergo stores cost more!!! In business the lowest cost most efficient competitor wins. And Amazon is darn efficient 😀

    • I agree with you to a degree. However there are still lots of stores like Walmart, Target, Costco, etc. and you don’t see any sign of them being in mortal danager yet they’re fully entrenched in the brick & mortar model. All of those stores, however, are able to continue to exist (and thrive) in the brick & mortar world because they have found ways to stand out, whether it be customer facing or back end facing ways. Sears/KMart could have stood along those stores, but they did absolutely nothing to separate themselves, and now they are where they are.

  2. There is no longer a Sears or a K Mart in my area. I liked both when they were here. I remember it was hard to find a price when looking for something at K Mart, and the stock seemed to need more attention to details. Sears became rather lackluster. Probably putting 2 low performing stores together wasn’t a good idea.

  3. Ironically the only time I’ve been to Sears in the last several years it was because I knew no one would be there. I needed a quick oil change and I was in a rush… No one goes there so it’s the only place with no waiting. Still I watched them like a hawk because no customers means no experience.
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  4. My last experience at Sears was horrible. And I actually was, like, 8 the last time I went to Kmart because so many of them went out of business. Anyway, Sears. I went there to do clothes shopping and I left within 20 minutes. The place was filthy. The carpet was stained, the walls were yellow, and they had a laughably small selection of clothes. It was like they’d given up already.
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    • I haven’t been to either in a while. Actually they had a KMart near our house that we never shopped at. When they announced they were closing it, I went in to see if there were any good deals, and walked out of there with one item. That’s pretty much my total purchase summary for the last fifteen years.

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