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Sears has another chance to avoid closing down

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Re: Sears has another chance to avoid closing down

#81

Post by braythwayt »

lotsofpulp wrote: post #16
bluedino wrote: post #11

How much of Sears's demise was due to Walmart? It's not like retail completely died. The home improvement chains hurt them too, once they started selling tools and appliances. We bought everything at Sears in the 80's. Electronics (including computers), appliances, toys, clothes, tools, lawn and garden... Was Sears too 'friendly' with their suppliers? When I worked at Sears at the end of the 1990's (the store was a g…

It's a good example to those that claim companies should pay employees liberally. Unless you're in a niche that people are willing to pay a margin for or serve upscale customers who also don't mind paying margins (Costco, Whole Foods, Nordstroms, Apple, etc), then you're going to lose business to competitors offering lower prices. In this situation, the only way to improve the well being of those whose labor isn't as…

I am extremely wary of n=1 reasoning. It ends us being confirmation bias. We look at Sears, note that they pay more than Walmart, and say that paying employees more either has no effect, or is harmful.

But are we also looking at the thousands of businesses that pay their employees terrible wages, but go out of business?

Businesses are complex systems that defy the search for simple explanations. That won't stop humans from trying, though. We all love the idea that there is some simple Eureka! idea that explains everything.

In this specific case you're talking about wages as if all other things are equal. All other things being equal, if we pay employees more, we lose business to lower-cost competitors that pay employees less.

This is like saying that if all other things are equal, a restaurant that pays more for its ingredients will lose business to competitors that pay less.

Of course, as managers, our entire reason for existence is to make sure that all other things are not equal. If we pay more for ingredients, we have to build our business around turning those more expensive ingredients into a better customer experience and perception of value.

And the same goes for paying more in wages. It's our business as managers to turn that into value. If we can't, are the wages the problem? Or is our mismanagement the problem?

Looking at the comments about shopping at Sears, I am not seeing a lot of "Everything about Sears was great except things cost a few cents more." I'm seeing anecdote after anecdote about how poorly it was managed.

Under the circumstances, if I wanted to cut wages at Sears, I would have started with their managers. If they're going to manage the thing into the ground, why pay them more than you'd pay an intern in an MBA program?

Re: Sears has another chance to avoid closing down

#83

Post by VBprogrammer »

Tsubasachan wrote: post #18
wombatpm wrote: post #5

Sears had everything. Global supply chain, check. Top notch distribution operation, check. System and infrastructure to take orders and handling billing, check. Name recognition and established customer base, check. They threw it all away, ending catalog operations in 1993 a year before Amazon.com opened in 1994. They owned part of Prodigy in 1984! Yet somehow thought it was a better move to expand into bigger box re…

Those who are first will later be last for the times are changing... Is there anything people don't buy online these days?

I know other comments are pointing out reasons this is not true but honestly it feels that way to me too.

All of my Christmas presents this year were bought on Amazon and delivered direct to my family who live 400 miles away within a day of me ordering them.

Even some of the categories of things other people have listed as things people don't buy online are things I do buy online. Tools for example, if I'm buying something to get a job done I'll pick up something from the catalogue type stores (Screwfix / Toolstation in the UK). On the other hand if I'm buying a decent tool to last I'll pick it out online, usually after reading and watching reviews, and then looking around to find the cheapest price for the exact model.

I was buying a pair of trainers for my partners Christmas. She picked them out on a big department stores website. I went to the store and they didn't keep them in stock. I tried 3 other stores in one of the UKs largest shopping centres and they didn't have them in her size. I tried another shop in a different part of town which didn't have them and finally gave up and ordered them on Amazon. They arrived 2 days later (this only a week before Christmas).

Re: Sears has another chance to avoid closing down

#84

Post by reaperducer »

Shivetya wrote: post #58
bluedino wrote: post #11

How much of Sears's demise was due to Walmart? It's not like retail completely died. The home improvement chains hurt them too, once they started selling tools and appliances. We bought everything at Sears in the 80's. Electronics (including computers), appliances, toys, clothes, tools, lawn and garden... Was Sears too 'friendly' with their suppliers? When I worked at Sears at the end of the 1990's (the store was a g…

I would not focus on one competitor. Sears sank themselves. They had everything, more so than JC Penny, but they were also heavily invested in mall locations which as the people spread out the mall orientation hamstrung them. Wal-Mart, Target, Best Buy, and more, were in strip malls everywhere and everywhere usually meant closer to you. Sears could have put some of that aside with a better and stronger online presenc…

One of Sears remaining valuable assets, though, is the real estate left over from its standalone stores. That's one of the bones that the creditors are salivating over.

Re: Sears has another chance to avoid closing down

#85

Post by bluGill »

melq wrote: post #76
bluGill wrote: post #32

Earlier quoted context omitted.

They are. You need to have a good amount of extra money to afford the membership and the cost of buying 6 months of toilet paper in advance. Those are cheap items that you will need, if you are not poor you probably don't even think about it. However when you are poor it doesn't matter if it is cheaper or not to buy in bulk because you don't have the cash to afford it. (you also are unlikely to have the storage space…

Membership at Costco is like 60 dollars a year. Not saying it's doable for everyone but its hardly something 'you need to have a good amount of extra money' to afford.

Spoken like someone who is not poor.

Re: Sears has another chance to avoid closing down

#86

Post by bluedino »

daveFNbuck wrote: post #29
lotsofpulp wrote: post #16

Earlier quoted context omitted.

It's a good example to those that claim companies should pay employees liberally. Unless you're in a niche that people are willing to pay a margin for or serve upscale customers who also don't mind paying margins (Costco, Whole Foods, Nordstroms, Apple, etc), then you're going to lose business to competitors offering lower prices. In this situation, the only way to improve the well being of those whose labor isn't as…

Paying employees more is supposed to work because it results in employees who do their job better. It seems Sears just increased the pay without increasing the expectations. I avoid Sears because when I go, despite there being no customers, the place is a mess and I can't find anyone to help me.

Sounds like the government

Re: Sears has another chance to avoid closing down

#87

Post by bluGill »

samfriedman wrote: post #63
bluGill wrote: post #32

Earlier quoted context omitted.

They are. You need to have a good amount of extra money to afford the membership and the cost of buying 6 months of toilet paper in advance. Those are cheap items that you will need, if you are not poor you probably don't even think about it. However when you are poor it doesn't matter if it is cheaper or not to buy in bulk because you don't have the cash to afford it. (you also are unlikely to have the storage space…

Upper class? It's true that those living in poverty often don't have the means to buy in bulk or pay a Costco membership, but I don't think the designation of "upscale" describes the store either. Many working class and middle class people shop there.

The poorest people in the US are still upper class. Except for a few homeless who refuse all support services perhaps.

Re: Sears has another chance to avoid closing down

#88

Post by mikestew »

rhino369 wrote: post #51
mikestew wrote: post #36

Lampert might have "saved" AutoZone, which AFAICT was the feather in his cap to make him "the next Warren Buffert", but if you asked me I'd be hard-pressed to tell you how the shopping experience changed. I speak from ignorance, and the laziness that prevents me from researching deeper, but I assume he did some accounting tricks, sold a few inefficient assets, etc. But as the owner of some old vehicles and a frequent…

Rebuilding trust and brand value will take years or decades. Don't undervalue accounting tricks, reorganization, focusing on efficient assets, etc. Getting rid of dead weight is much more important than trying to reinvent the retail experience. You need to stop the bleeding first.

That's some good insight, definitely need to bail the water out first. Prime example that comes to mind is Gibson: get rid of money-losing electronics (Teac, et. al.) and go back to making instruments. Even that might not save you, but it's a shot.

I could see Lampert doing the first part, stop the bleeding, but once that was done perhaps he was stumped with the "now what?" part. OTOH, AutoZone has been going big guns for a while now, what do I know? :-)

Re: Sears has another chance to avoid closing down

#89

Post by excalibur »

ams6110 wrote: post #37
Tsubasachan wrote: post #18

Earlier quoted context omitted.

Those who are first will later be last for the times are changing... Is there anything people don't buy online these days?

There's a lot of stuff I don't buy online. Clothes -- I like to try them on first. Tools -- I like to see if they are well made and how they feel in my hand. Photos on a website don't provide this. Food -- I want to check produce and meat before I buy it. And it's easier to stop at shops I'm passing on my way home anyway. Household supplies -- I don't want to deal with disposing of shipping boxes, styrofoam peanuts a…

Pretty much in agreement here, although I do find it more convenient to buy appliances through the big box store's website than to go in person and spend an hour guiding an associate through the options in their arcane inventory system.

Re: Sears has another chance to avoid closing down

#90

Post by [deleted] »

alexhutcheson wrote: post #24

Neil Saunders wrote a good Twitter thread last week about how mid-scale US department stores don't execute the basics of retail very well: https://twitter.com/NeilRetail/status/1079785924966445058 Others have pointed out that Target seems to do a much better job with organization, presentation, and flow. Not coincidentally, it seems to be performing much better than legacy department stores that historically targeted…

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