Just another acronym...

Joined: 07 Jul 2003 Posts: 765

Fast, Helpful and In-stock, Store Owns Sales...Great mottos but little substance. Just as with PSE or perhaps the lesser known Goalsharing these "rallying cries" are fantastic ideas that will be talked about for six months or so, until the next new package rolls out. I just finished reading a Business Week story about the 10 greatest CEO's and maybe our Leadeship should learn a lesson or two from the best. Let's face it, every business large and small faces tough times periodically...and many times they are forced to go through massive changes to remain competitive or regain the success they once enjoyed. But it is how these changes are handled that makes or breaks a company. The good companies rely and depend on their most important asset, their frontline people, to ensure that their business transistion goes smoothly. The bad....well I think we may be experiencing that right now.

We all know the company is struggling, at least from a sales standpoint. Lacy doubled our earnings per share last year (At least he claimed responsibility) while our sales were continuing to slide and market share was being given up to competitors. This was accomplished through some serious operational overhaul and cost cutting. Much of this cost cutting came at the expense of employees. But as with most short term profit improving strategies it sacrificed the most important thing that we as a company had to offer..the thing that set us apart from most of our competitors...Customer Service. Maybe that was part of a long term strategic plan, I don't know, but look at the basics of the "relaunch". It is all about customer service. But again, the company has strayed from it's core competancies, the 3 C's. Before we can have a compelling place to shop or invest we must have a compelling place to work. Especially in a retail environment, the folks on the frontline are the ones making the money. And this will become even more important after we sell the credit unit and no longer can depend on it for 60% of our income.

This is where I see the big problem. Along with the big shift in business strategy the company has put in place new compensation and scheduling programs that have alienated these same frontline folks who they are depending on to give "perfect 10" customer service. Does anyone else see a recipe for failure. If the Take it Home Today program or Next Day Delivery does not truly become a reality then we are all in trouble. To me it seems the biggest breakdown may be in the frontline management who are ill equipped and poorly trained to handle such a transition. Change is never easy, but our ASM's and SGM's should all be out there stressing the need for change...and working with us to adapt to the new changes. But it seems as if they have forgotten that their employee's are not just a fixed cost that can be controlled, but are a valuable resource that can make or break this company.

I personally understand the need for change and the aggressive push for new business. I only hope that this time it isn't all just lip service. Time will tell. Until then, Lacy will sell the credit unit and will receive a huge bonus because he will again increase earnings per share...but keep an eye on those sales numbers each month. With 22 or 23 straight months of same store sales declines we should start to be able to show increases in the near future. If not...

Joined: 04 Jul 2003 Posts: 933 Location: roaming...

CCCs, what an exceptionally well written piece! We have another true writer among us, folks.

Kudos! Thumbs Up

Joined: 04 Jul 2003 Posts: 830

CCCs, do you believe it's too late for this company?

CS Wink

Posted: Sun Jul 13, 2003 1:45 pm Post subject:

Good Post, I had two people yesterday that needed take home could not accomodate them till Monday. Where is the castles part of the relaunch. We again had the most threatening and intimidating MA meeting yesterday morning. One woman had anxiety and chest pains all day. She is the sole supporter of her family in ELectronics and not even able to pay her bills. She needs the medical, and it was just down right abusive the meeting. Threats, they want us to track sales, the calls backs the heat is on if we get bad ones we dont work there. I guess they know that Aug 3rd the are able to place all the people they screw in Jewlery and shoes in the bc if we dont tow the mark.

Joined: 07 Jul 2003 Posts: 765

CS,

I don't believe it is too late for the company yet. We still hold a near 40% market share in appliances and still have strong name brands like Craftsman, Kenmore, Diehard. Were you around when we eliminated the Sears Catalog? Everyone thought that would be the end of our business as Sears was founded as a catalog retailer. However, the catalog business had become a money loser, so the decision was made to close up that shop. I believe that at that time we were at a very critical juncture and came very close to going under as a company. However, we re-branded our business and started the Softer Side campaign. This was very succcessful and allowed Sears to continue as a profitable business.

Now comes another important juncture. Are we in as dire financial shape as we were in the early 90's, NO. Is the company making money? Yes. Has the 4 year conversion process set us up to allow for sales increases in the near future, especially with the new focus on In-Stock and Customer service? Yes. When a company has 2 straight years of same store sales declines it makes it much easier to show sales increases versus last years numbers. Will our stock price continue to climb this year...of course it will. We will be selling credit which will generate a ton of cash. We will use some of that cash to buy back stock, we will increase our earnings per share over the short run. We will be comparing our sales versus very weak numbers, so the increases they are looking for are actually decreases if compared to sales three or four years ago, but they will still be considered by the market as sales increases and Sears will be touted as a great turnaround company. The company will be fine, at least for the near term.

Let's give this new "program" a good six months to take shape. Change in business, especially one that is as large as Sears, does not happen overnight. It will not be easy either, especially if there is no follow through at the corporate level on all of this push for customer service. Sales will become much more important to our bottom line next year, so if this re-launch fails then the company will find itself on shaky financial ground. I have my own thoughts and opinions on the effects this will have on the commission sales folks, but I will keep them to myself. Do I think these changes will be successful without the buy in of frontline associates, probably not. It is not too late yet. But the clock is ticking.

Posted: Sun Jul 13, 2003 3:58 pm Post subject:

Welcome CCC. Good posts! But with Sears selling credit and eliminating line after line of merhandise, eg. bicycles, paint, whole-house fans, furniture, light bulbs, nuts & bolts, lighting, sinks, vanities and most of plumbing, wall clocks, lamps, etc., etc., etc. What are they going to have left to make money on?

Joined: 04 Jul 2003 Posts: 1337 Location: The Collective

Central, you make some good points! I bet all that will be left of Sears in 10 years will be freestanding BCs and Hardware stores.

Joined: 07 Jul 2003 Posts: 765

Sears is doing what all business do or should do on a regular basis, evaluate the profitability of certain lines or services and scuttle the uprofitable or mature businesses that provide no potential for growth. If you take a look at most everything that has been eliminated you might see at least one common thread, the inability to sell any miscellaneous income services with the product. As we become more price competitive, miscellaneous income(MPA's, MRA's and the like) becomes even more important because we will make even less on the product. Sears is such a top heavy company(lots of people to get paid from the products we sell) that we cannot compete without something to fill in the gap of the slashed margin pricing.

We will never be a Wal-Mart, a comany that is trying to be everything to everybody. What we do need to do is create a unique selling proposition, and remind everyone why the come to Sears in the first place. Much of our advertising is trying to rekindle that old feeling that folks once had for Sears. However, it cannot be in word only...it has to be in actions. If people continue to come to our stores and are bombarded by signing that says Take it Home Today and next day delivery when neither is truly available, then our credibility with go totally out the window. We, the entire company, have to live up to our promises to the customer. If not, there is no reason for the customer to not go to a competitor.

Joined: 11 Jul 2003 Posts: 157

Bodyguard,
Several of us in BC have kicked around the idea that you mentioned in this post-namely having Sears become an appliance and hardware only store. Our thinking is that we should take our strongest name-recognition brands (kenmore and craftsman) and rebuild the store around them. With all due respect to our hardworking fellow associates in softlines, Sears does not do an even average job of selling clothes. Lands end merchandise is a borderline flop from the posts i have seen here. And i do not know of a single individual who came into Sears just to buy canyon river blue jeans or david taylor shirts.

Imagine if hardlines had room to double, what could we do?
-put a take-me-home unit in the box on the floor behind the display so that customers would KNOW that we have it.
-build vendor specific boutiques, small mock kitchens that showcased a vendors frig, dishwasher, range, microhood, and wall oven.
-put on the floor the secondary services and products like doors and cabinets that get ignored or a 1-800 number now
-put the home theatre products in little view rooms so that the customer can experience the quality without hearing the phone, intercom, and crying babies.

There is a new type of store in retail today. They are occuplying power strips. Bed bath and beyond, Sports authority, Petsmart, etc... All these stores dominate the competition by having everything in a category of merchandise. Sears could do the same if we picked the right niche. Yes niche! Department stores of limited selection across the spectrum of products is a dinosaur. Sears could dominate appliances, handtools, lawn and garden, and maybe even electronics with the quality people that are in that department. But the days of being every thing to every body is gone unless your name is Walmart.

Sorry this post has gone on so long. Maybe it needs to be a new thread.

Joined: 04 Jul 2003 Posts: 830

CCC, please don't keep your opinions about the effects this will have on the commission sales folks to yourself.

CS Wink

Joined: 04 Jul 2003 Posts: 830

CCC, please don't keep your opinions about the effects this will have on the commission sales folks to yourself.

CS Wink

Posted: Sun Jul 13, 2003 11:43 pm Post subject:

This whole thread has had a lot of good things to say, but Sears needs softlines, believe it or not/ SOme people do just buy kids clothes, because of kidvantage. LE would not be a flop if the co. backed it more.. More advertising and mabey a sale here and there. Where Sears went wrong is they got away from what they knew how to do the best. That is retail. Now they are flopping in the wind to regain what they had. I agree they hurt themselves when they took out certain lines in hardware and sporting goods. It used to be a one place and shop all. Now you almost have to go to HOme Depot if you are doing at home project to get all the materials. Yes! These freestanding stores you can most of what you want, but also pay a premium price for them too. I believe Sears will turn the boat around, and agree it will take time, but some of us do not have the time to wait either. Rolling Eyes

Joined: 11 Jul 2003 Posts: 273

All I know is after watching that SOS video they showed on that meeting we went to, if I was a customer which at times I am at Sears, and I owned any Sears stock I would of sold it immediately.. that guy is an idiot.. and trying to get you to cheer about it.. trying to act all cool and to pump you up.. come on.. I could never be a manager at sears and be able to sleep at night thats for sure.. you can't have an opinion to be a manager working for this company.. plain and simple.. they change left and right, and most of the time it's not in a positive direction.. and you need to give the disappointment to your fellow workers and try and convice them that this is a good thing for them too.. Yeah sure buddy.. we believe that.. There marketing techniques are very pushy and shady.. I'm glad I never tried to get in management and become a robot reporting all the "changes for the better as they call them" to my fellow associates.. "It's okay that we are lowering your commission rates, just sell more products and more pa's for us and it'll work out better financially for you.. " yeah sure.. whatever

Joined: 04 Jul 2003 Posts: 260

Nice posts (opinions) from CCC...good to see.

Lands' End working in most stores that rolled out last fall, it will work in stores that are just getting the product. She loves it and buys it. We need softlines...it drives repeated footsteps into our stores every week....and the Lands' End customer shops in HI and BC already...she just didn't stop in apparel on the way out the mall entrance, now she does.

Expanded space for hardlines....already happening in new remodels, with BC taking the best space in the store in most cases. The relaunch will drive customers into our stores.

Give the changes time....focus on the positives that happen each day, not the negatives.....build on the positives. We can't change anything and attitude is everything...with each other and with the customer.

Posted: Mon Jul 14, 2003 3:19 am Post subject:

Posted: Mon Jul 14, 2003 2:53 pm Post subject:

"It's okay that we are lowering your commission rates, just sell more products and more pa's for us and it'll work out better financially for you.. " yeah sure..

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