How Would You Fix Sears?

'Ad Age' Asks the Experts and Its Readers

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COLUMBUS, Ohio (AdAge.com) -- Sear's $11 billion takeover in November 2004 by K-Mart, an acquisition orchestrated by hedge-fund manager Eddie Lampert, was hailed at the time as a way to revive the ailing retail chains by cross-marketing their respective brands and compete against larger rivals.
What would you do to save Sears? Tell us in the 'Your Opinion' box below.
What would you do to save Sears? Tell us in the 'Your Opinion' box below.
The strategy is now largely viewed as a failure by analysts, especially amid Mr. Lampert's heavy cost cutting, lack of investment in the stores and diminishing advertising spending. Earlier this week, Joan Chow, who joined Sears in 1998 and was chief marketing officer since 2005, left the retailer.

Given Sears Holdings Co.'s difficulties in turning around the Sears and K-Mart brands, Advertising Age asked the experts what they thought the company's biggest marketing problems were and how they would solve them.

Gary Drenik, retail analyst, Big Research
Problem: "Sears' average customer age is slightly over 51 years old, and this group is not particularly interested in fashion or the latest electronics. More of Sears shoppers shop at Wal-Mart, Kohl's or J.C. Penney most often for women's clothing than at Sears."
Solution: Manage the business like a retailer, not a financial analyst, Mr. Drenik said. Rebuild the dwindling customer base by focusing on customers and how to please them.

Marshal Cohen, NPD Group chief industry analyst
Problem: "The biggest challenge [Sears] has is the competition and trying to regain the momentum. The lost market share and lost customer perception is hard to regain because [consumers] have gone elsewhere and found other places to shop. ... That's where the biggest growth is going to occur -- regaining existing customers and regaining traction with migrating core customers."
Solution: "Sears has got to go beyond traditional retail marketing. They've got to begin to find ways to re-engage and invite [consumers] back in, almost at any cost. It's like apologizing to a friend you've insulted, sometimes you've just got to say 'Give me a second chance.' Reward customers for referring other customers."

Retail consultant Catherine Sadler, a former chief marketing officer of Ann Taylor Stores
Problem: "Consumers today are more discerning than ever, from luxury all the way down to moderate, and they are more brand-focused and constantly asking, 'What is relevant to me?' Stores like K-Mart and Sears lack the strength of point of view that's both differentiated and compelling at a time when retail spending is declining."
Solution: Exert more control over product offering, pricing strategy and the store environment, Ms. Sadler said. Given the economy, Sears needs to offer to the consumer fresher products that deliver on her lifestyle needs.

Kim Picciola, retail analyst, Morningstar
Problem: "If they continue to not invest in the brands, I don't think they can withstand the competitive forces from Target and Wal-Mart, Kohl's and J.C. Penney."
Solution: Ms. Picciola said the retailer must reinvest to make a comeback: Invest in the stores, invest in the business, invest in advertising and drawing customers back in the store.

Will Ander, consultant at McMillan Doolittle
Problem: "Pretty good just isn't good enough anymore. Being everything to everybody doesn't work. Sears is third-best in most everything. They are just not relevant today for the way people want to shop."
Solution: "I don't think there is a growth solution. The strengths they can leverage are the real-estate locations and they have strong brands, but the solution is a smaller, more niche and focused retailer, but that's not acceptable to the people who own the business. Everything today is about growth and cash flow."
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