Sears all in on loyalty.


The retail landscape is rapidly changing, and has been for a while now. The traditional powerhouses, giant corporations that have dominated retail for decades, risk being left behind as they struggle to adapt fast enough. For those of us involved in retail loyalty, one particular struggle should be followed with particular interest – that of Sears Holdings Ltd in the United States, owner of Sears, Kmart and many others. Why Sears you ask, who certainly don’t seem anywhere near the ‘cutting edge’? Because Sears have played their hand, they are all in – on loyalty.

Sears Holdings have been in the financial red for nearly 7 years now, a slow decline that has lately been picking up speed. Over the 2013 financial year, Sears posted $1.4 billion in losses, followed closely by a $402 million loss in the first quarter of 2014. They are in the process of closing at least 80 Sears and Kmart stores in 2014, and have sold assets such as their Land’s End apparel brand to cut costs. To say Sears is in dire straits would be selling it a little short.

Enter ‘Shop Your Way’, Sears’ anointed saviour.

The flagship of Sears’ new retail direction, the loyalty programme has been called both a success and a failure, the reality of being born in such desperate times. Shop Your Way combines tradtional loyalty mechanics (collecting points, discounts, personalised deals) with multi-channel purchase (online, in-store, phone, delivery, pick-up) and a social platform. It truly is a sight to behold – Shop You Way’s online platform is a wonderful mish-mash of Facebook, Twitter, Pinterest, search engine, catalogue and retail portal. ‘Like’ products, enter competitions, have conversations with other customers, share deals, get advice and customer service, redeem rewards; the depth of Shop Your Way covers all the directions retail is currently heading.

Is Shop Your Way saving Sears?

In 2013, 75% of sales came from members of the loyalty programme, up from 50% in 2012. The problem Sears seems to be having is that sales are still plummeting – either non-members are not buying, members are spending less, or both. At the heart of Sears’ decline is that most fundamental concept of the evolving retail space, integration. Shop You Way may be pulling Sears in the right direction, but the rest of its operations are lagging behind. Their tech focus has not gone well in-store; throwing iPads at employees with limited guidance and systematic issues does not a good customer experience make. Anyone involved in retail knows that full integration is never going to be perfect or even pretty. But overreaching and leaving behind your customer base will quickly render any technology advancements far less effective, or even harmful.

It is too early to consign Sears to the history books of retail, but the vast majority of observers say it’s not if but when, and Sears’ much-trumpeted Shop Your Way is only delaying the inevitable. Sears is stuck trying to compete with Amazon, Walmart and Costco – all three sell more goods for less, and in Amazon’s case, utterly dominates online retail. Sears is also caught between its traditional aging customer base, and the retail direction of the younger generation. Time is not on their side.

For those of us in loyalty, Shop Your Way is a great opportunity.

It is rare for a company with such capital at its disposal to invest so heavily in a loyalty programme, with the intent of keeping the ship afloat. Innovation is so often borne out of need, and Shop Your Way is combining aspects of loyalty that many of us talk of in future terms. I highly recommend signing up for Shop Your Way and exploring the platform. Will it save Sears? Not likely, but that doesn’t mean it should be viewed as a failure.

After all, Sears have gone all in – the pot remains to be split.

Author: Will Riley – Account Executive