Just a few days ago, Sears shut its doors permanently for its last store north of the American border. Sadly, the end of an era for one of the greatest success stories in American retail history.
As recently as 50 years ago, the thick Sears catalog was every family’ go-to source for mail ordering anything from eyeglasses to bicycles, and, in earlier decades, even medicines and pre-cut houses complete with kitchen sinks. It was the world’s largest retailer with over 350,000 employees, and the name on the world’s tallest building.
Today’s customer isn’t browsing that catalogue, or walking into its stores anymore. According to MSN Money, Sears has an extremely high chance of disappearing and going defunct before the end of 2018.
What did they do wrong?
Sears had moved from its original mail-order catalogue business to storefronts and from then on, determined that it didn’t need to do anything to change its business. It simply needed more business. There was a lack of evolution in the way Sears acquired new customers, and retained existing ones.
It wasn’t about Sears doing something wrong.
While they failed to evolve, it was their competitors who were ‘doing things more right’ that squeezed their profits.
Others did things that were ‘more right’.
Walmart – it started off as a direct competitor and in many ways, was ‘just another Sears’ on cheaper rural land, paying cheap wages and selling goods for cheaper prices. But what Walmart did right was in implementing information technology for its supply chain management, resulting in extraordinary precision for efficient stocking and delivery. Most importantly, Walmart used cutting-edge technology to manage its shelf space. It knew which items were selling fastest, at which prices, and in which cities.
Amazon – ate Sears’ lunch, via an online-first approach to consumers, and a very aggressive approach to underdeveloped technologies i.e. ordering via AI Assistants, delivery-by-drone, or virtual and augmented reality. Their aggressive approach was very much their marketing strategy, as consumers position Amazon as the firm ‘most likely to make a breakthrough in the retail industry’.
The alternative investments industry is an extremely competitive landscape. Know what may happen if you hold onto what you have been, rather than to look around and leap forward when you need to.
In an era where managers are placing more emphasis on marketing, make sure you tell your story to the world – it’ll pique the curiosity of allocators and make capital more ‘sticky’ during the tough times (which are inevitable). There are plenty of ways to market ‘more right’ compared to what you’re doing now.
It’s not always about doing something wrong when you can’t get the interest of allocators.
By Alan Chu