Sears' failing sales is being blamed on the economy, but the reality is shoddy stores, poor customer service, no leadership and no attention to sales opportunities are the real reasons Sears is failing.
Billionaire hedge fund manager, Edward Lampert, over 18 consecutive quarters of declining sales and just this year the shares have fallen 55 percent. Kmart merged with Sears in 2005; it was pitched that the new company would have geographic reach and scale to compete with Walmart stores. That has not happened. Instead, Lampert has closed 171 US stores since 2005 and yesterday stated it would close another 120.
Yesterday I took my sales training team in Los Angeles and mystery shopped Sears to record the customer experience. This is a strategy used by my consulting business that gives my company a first hand experience of what is necessary to turn around or improve a company's performance. Rather than interviewing management, who may defend existing strategies even when they are failing, mystery shopping the company identifies and simplifies the actual problems.
Summary of discoveries based on this one experience:
- I wandered from department to department with cameras even trying out products.
- Not one department was manned with personnel to help me.
- We saw 50 to 60 percent discounts on most product tables.
- We passed at least six employees that did not acknowledge me or welcome me.
- It was 13 minutes before a Sears employee waited on me and this was only because management was made aware that we were filming, at which time they asked us to leave.
The video demonstrates the problems with Sears:
1) no commitment to service,
2) no attention to the customer, and
3) no one focused on revenue opportunity.
The most effective, simple and cost effective strategy for Sears would be:
1) Provide a greeter at the front door of each store to welcome each customer.
2) Train staff in people skills to take interest in the customer.
3) Make customer service and sales experience priority.
In all fairness to Sears this is just one store and for it to be validated we would want to shop 10 to 15 percent of its locations. However this single experience demonstrates to every retailer the importance of the customer experience. It also makes a case for why Internet sales activity is growing while traditional retail sales continue to under impress.
Many will suggest that the problem of poor customer experience is due to minimum wage employees. Mr. Lampert -- you can shut down another 120 stores but what about providing a customer experience in the other 3,800? I get better service at Starbucks and 17,000 locations and a $4 product.
Sears will get a S&P downgrade and head for bankruptcy if it doesn't quickly shift its focus to delivering a world class customer experience. Kim Kardashian's clothing lines can't save Sears if employees aren't interested in the customer.