Background
Once heralded as the leading retail store in the United States, Sears Holding, based in Hoffman Estates, IL., faced several years of decline due to shifting market dynamics and competition. To regain profitability and revitalize its brand, Sears embarked on a strategic acquisition of A&E Repairs, subsequently integrating it into its Home Service Division. Recognizing the potential in its vast network of 4,500 parts stores, the company aimed to transform these locations into modernized parts and supply centers while strategically positioning itself to serve both retail and commercial channels.
Problem
Sears’ decline posed a serious threat to its long-term viability. The company needed an actionable plan to not only stop the revenue slide but also to reinvigorate its market presence. The strategy focused on transitioning parts stores into multi-functional retail spaces, explicitly targeting both consumer and commercial segments and preparing to launch new Sears Grands stores and remodel Sears Parts and Repair Centers.
Action
To address the challenges, Sears focused on several key actions:
- Recruitment and Training: This phase concentrated on recruiting eight new District Sales Managers (DSMs) with strong backgrounds in retail sales (B2C) and business-to-business sales (B2B). Once onboarded, the new DSMs participated in a comprehensive training program to ensure they were fully knowledgeable about the product lines, remodeling strategies, and commercial sales targets.
- Target Market Identification: The strategy centered around engaging commercial property management firms, municipal governments, and home warranty companies (all new channels of business for Sears) and bolstering walk-in consumer traffic into the remodel stores.
- Store Remodeling: The initiative aimed to remodel 750 assigned stores in a region covering 21 states, including Alaska and Hawaii. This effort was crucial to modernizing the shopping environment and improving customer experience. The budget was sweat equity and materials garnered from local retailers going out of business and Sears Full Line retail stores that were closing.
- Talent Development: An essential strategy component involved upgrading store personnel through targeted recruiting and comprehensive training programs. These programs aimed to enhance customer service and equip staff with the skills necessary to drive both retail and commercial sales. To boost morale and enhance our image, we provided new uniforms and equipment for our store staff.
- Commercial Sales Team Formation: The DSMs actively pursued B2B opportunities within the targeted segments, fostering relationships and showcasing Sears’ services and products.
Results
The outcomes of the implemented strategy were significant:
- Store Remodeling: 90% of the stores underwent successful remodeling. The remaining stores were closed following assessments of their condition and alignment with corporate goals to streamline operations and focus on core locations.
- Revenue Growth: Over a three-year period, revenue surged from $94.4 million to $165.5 million. This increase was attributed to the successful transformation of 750 parts stores and the acquisition of new commercial customers, underlining the effectiveness of the strategic plan.
- Market Repositioning: The initiatives not only revitalized sales but also helped reposition Sears Parts and Repair in the local markets as a competitive player in both retail and commercial sectors, setting the stage for future growth.
Conclusion
The transformation of Sears’ retail and commercial sales strategy exemplifies how targeted actions, aligned with a clear vision, can lead to substantial improvements in business performance. By focusing on modernizing facilities, enhancing workforce capabilities, and identifying new market opportunities, Sears Parts and Repair successfully turned a trajectory of decline into a path toward renewed growth and relevance in the retail space.