Live from eTail 2004: How Sears.com Went from Loser to Winner in Five Years

Aug 04, 2004 10:22 PM  By

Hollywood, FL—In 1999, Sears, Roebuck & Co.’s e-commerce business lost $100 million. This year, it posted a sizable pretax profit, said Bill Christopher, the cataloger/retailer’s chief of customer care, in a session here. Christopher detailed the five key steps “that really make a difference”:

1) The customer comes first, last, and always. “You always have to win your customers,” Christopher said. “It’s a never-ending battle. There are a lot of competitors out there, and you have to continue to evolve.”

In his communications with Sears customers, Christopher said, they’ve demanded not only a seamless experience online but also for the site to identify complementary products. Above all else, they’ve insisted on the ability to be able to pick up orders, and return them if necessary, at any of Sears’s 837 stores nationwide.

2) Understand and leverage the company’s assets. “With the number-one U.S. tool brand in Craftsman and the number-one appliance brand in Kenmore,” Christopher said, “we’ve leveraged these assets in building our dot-com.”

As part of leveraging its existing assets—in this case, its 837 stores as local fulfillment centers for customer pickups—Christopher noted that the fulfillment cost for instore pick-ups is 1%-2% compared with 4% for standard fulfillment involving parcel shipping.

3) Establish a vision and evolve it over time. “Our goal has been to become a premier multichannel retailer,” Christopher said. For that reason, the site offers the same sort of complete buying guides and product information that customers can find in Sears stores.

“Once you build the infrastructure, you can do anything you want on the site,” Christopher said, referring to the Website’s product expansion. Sears.com now sells Harry and David cakes and 20,000 SKUs of sporting goods—products not available in the stores or print catalogs. As for rounding out its complementary offerings online, Sears later this year will finally add apparel, shoes, and automotive supplies to its site. “And we may add some other surprising things to the site in the next few years,” he added.

4) Partner with your information technology, logistics, and operations departments. “We keep track of those partners and make sure they deliver,” Christopher said, “because the operation must be enterprise-driven. So we hold these departments accountable for meeting project deadlines, selecting partners with proven track records, and identify risk-sharing opportunities with them.”

For its e-commerce unit, Sears has special relationships with 50 key vendors as a means of expanding its online assortment with little risk. For instance, the company will partner with sporting goods vendor Global Sports so that it can offer an additional 20,000 SKUs by November. “We did that because we have a lot of eyeballs on our site,” Christopher said. “And even though we don’t carry a broad range of sporting goods in our stores, we can carry them online.”

5) Pilot, test, measure, and improve from a multichannel perspective. “We want to know everything there is to know about the customer’s experience,” Christopher said. “How are they doing in catalogs, stores, online?” He pointed out that 50% of all online sales and 27% of all in-store pickup orders lead to incremental sales. “Sears.com influences 22% of all in-store appliance purchases in the pickup process, which is like a drive-up pickup area.”