When I was a child, my parents would drive to the suburbs once a month and we would arrive after what seemed like the longest drive at Kmart. At the time, Kmart was a strange and wonderful place. It was a giant store that had toys, music, clothes, pretty much everything! My parents would usually buy my brother and I, a couple of Hot Wheels cars and that is pretty much all we cared about. I can’t even remember why we would even go there, cause all I remember was the Hot Wheels cars. The only stores that my parents would take us to were grocery stores, so to us Kmart was pretty incredible. As I got older, I grew less and less interested in Kmart. The store lost its appeal to me completely when I became a teenager.

Primarily Kmart seemed to be a store that did not want you to shop there. They had a little bit of everything, but they never really had what you wanted. They sold automotive parts, but somehow never had the bulb or oil filter you were looking for. At the time they sold music and movies, but always at a higher price than stores like BestBuy. They were not known for carrying the best brands. Their registers were notorious for ringing up the wrong price and making people wait in line for price checks. Lastly, it seemed like Kmart employees hated their customers. The only good time to shop at Kmart was when they had an end of the season sale on items. Otherwise I learned to avoid Kmart if at all possible.

Sears Holding NASDAQ

On the other end of the spectrum was Sears. For many years, I would shop at Sears for hand tools, lawn equipment, electronics, and most of all clothes. Unlike Kmart, Sears had better quality clothes for men. In my teen years they also had the famous Sears Catalog and I did order from it a few times. My first stereo system came from the Sears Catalog and I had to pick it up at the local Sears location. For both my parents generation and part of mine, the Sears name was associated with quality and the middle class. Overtime Sears began to gradually decline. Some journalists today are writing about how the decline of the middle class itself is causing a death spiral for businesses like Kmart and Sears, other people are instead pointing to the rise of online shopping from Amazon as the cause of why retail business is suffering. However, I think the reality is a bit more complicated than Amazon Prime members no longer shopping retail.

Today Kmart and Sears are one company. A company that is closing stores, having trouble keeping shelves stocked, and bordering on the edge of bankruptcy. So what did happen? More than anything else, Sears Holding Corporation, the parent company of Kmart and Sears, does not understand who their customers are. This is the problem.

ShopYourWay Is Not Helping

The focus on online shopping is not going to save Sears. If anything it is going to cause it to close more stores. Last year I ordered a sweater on clearance from one of the three websites the company has. The website allowed me to ship to my local Kmart and save on shipping costs. After receiving an email notification stating that my item had arrived, I drove to the store and went to the customer service desk. I was amazed to find out that the Kmart employee had to search for my item on a paper log that was completely handwritten! After a few minutes, the employee gave up and brought it up on the register and then went to go retrieve the item. Comparing this to JCPenny, BestBuy, or even Walmart, the experience was not impressive.

I receive multiple retailer emails a day. When I look at emails from Amazon and BestBuy, I can immediately see that their emails are targeted to my interests. They spotlight specific electronics or books that I am already interested in. The ShopyYourWay emails look like old style newspaper circulars with literally 50 or more items listed, almost none of which I am interested in. The emails are not helpful, they are instead a time waster, as they never highlight anything specific. Sears Holding really does not understand my interests, nor do they value my time.

The Store Shelves

A year ago I was at social event, and I sat next to a retired gentleman. He mentioned that he use to work in supply management. I could not help but vent my frustration and relate what a terrible inventory system Kmart and Sears have. He agreed with me and then related that he was a former employee. In the multiple years that have passed, where Walmart figured out how to do electronic inventory and Target created mom friendly stores with plenty of room for baby strollers, Sears and Kmart stores have not changed physically at all. The competition understands that change is good, that changing layouts and having different types of displays is what keeps people coming back. Target offers Wifi access to its customers. Imagine if next time you went to Sears there was a cafe area where customers could drink Starbucks coffee at the same time they waited for their tires to be installed? Instead the last time I was at Sears, I saw a shoe department that looked like a tornado had just gone through it and boxes were scattered throughout. The employees in appliances were trying hard to stay awake as they stood there looking at each other. The store was almost empty of customers. Walking to another end of the mall, you could find a vibrant, brightly lit, JCPenny. The differences were remarkable.

What To Do

Sears Holding needs to focus on the customer experience in the store. First empower your employees to take care of the customer. Retail employees want to help their customers, so let them do that. Forget about giving customers endless amounts of paper coupons and instead let employees walk around the store and survey customers via iPads. Find out why they are there and thank them with a discount or other type of immediate reward for their time. Provide spaces in the store for customers to sit and talk. A coffee shop or other type of area where customers can make a small purchase and feel comfortable would help keep customers in the store and visiting more.

Focus on products that customers actually want to buy, this is why you had employees survey customers, so use the data. Highlight specific products in the store, show people how to use their lawn mower. Host makeover sessions on the weekend to attract customers to clothing lines and other personal items. Be relentless, about creating spaces for customers to interact with employees and products. The store space should be about customers engaging with products.

Lastly, invest in the stores. Close the store for a week and remodel. The stores need to be bright, clean, and layouts open and inviting to families.