Most people under the age of 40 (which includes me) may never understand how big of a deal Sears declaring bankruptcy is for retail. It’s not that they were a major player today, it’s that they were THE major player in big box retail. Essentially, they were the Amazon of their day.
Once upon a time, you got your appliances, clothes, toys, gadgets, and in some eras, even your house, from Sears. They were ahead of their time in using catalog ordering in allowing people to shop from their home. Sears was known for its service, quality inventory, and customer service. They were the beast that could never be taken down.
Then retail changed.
I hate talking about the “retail apocalypse”, mainly because I think it’s stupid and doesn’t have the same implication on independent retailers as it might a big box store. So I wouldn’t say “apocalypse” but I would say a major retail shift has taken place over the last 15 years. The way customers engaged stores changed, online ordering threw big-box retailers through a loop, and the decline of the mall began. In many ways, there did seem to be something going on but independent retail has largely been able to move forward almost unaffected.
This is where it gets dangerous. As an independent retailer, it is easy to look at Sears and not see the lessons that can apply to your business. There’s more than you realize that we can take away from this and use it to grow.
A successful retail business that doesn’t pivot will eventually fail
If you’re crushing it today, it’s pretty easy to sit back and keep doing the same-old-same-old. It only makes sense; that’s what pays the bills! You could be an amazing buyer and not need to plan or your store might be knocking it out of the park so there’s not a reason to go online. Countless things can point to the fact that nothing needs to change.
Sears was in the same boat. They had a growing business and their locations were having great year over year sales. Their brands were known as the best in their industry (I still have a Craftsman lawnmower) and they were the force that couldn’t be taken down. When retail shifted, they didn’t think they needed to.
Don’t let yourself fall into this trap. I’m not saying you should live in a constant over-evaluation mode but it’s important to take time on a regular basis to step back and see if any changes need to be made. The one thing I can promise you is that there’s never a time in your business that a change doesn’t need to be made.
Here are some good questions to think about:
- What is going well for us right now? Why?
- What has been a challenge we haven’t faced before?
- How would we do if a sales channel were hurt or taken down (social selling, construction near your store, etc.)
- Do we have any new competitors? What is our competition doing well?
A successful retailer that doesn’t invest in the business will eventually fail
One of the moves that Sears made in trying to save their business was closing stores, cutting down on buying. Essentially, cut expenses to be as little as possible and lean on the best performing stores. For you, this would look like cutting spending on categories that don’t sell quite as well to lean heavily on the ones that do.
What resulted for Sears was stores that were half empty, relationships were damaged with vendors, and they quit being the go-to source for Americans for appliances and tools. This was the biggest nail in the coffin and marked the beginning of the end.
The danger in me saying this is that some of you might throw “good money after bad” and continue to invest in things that you should probably cut your losses in. There are many situations where cutting expenses is the right move. I’m talking about situations far more nuanced than that.
If you have a business that shows great potential or an idea that has historically done well, then planning ways to make it through rough patches will be critical.
The important thing is this: You can not save a business by cutting expenses alone. It will also take investing in your inventory, your team, and your sales channels.
Here are some good starting places in determining where to cut and where to invest:
- Is my website at a place it needs to be to grow my business?
- How do customers engage my store? Are there places of friction (things that cause the customer not to buy) that we can fix?
- Does my site or storefront represent our brand and the customer we are trying to reach?
- Are there categories you are emotionally invested in that just don’t move?
- Are there categories you don’t love as much but your customers do?
The future is bright for independent retailers but nothing is promised. My hope for you is that you’ll take a step back and evaluate where you need to change to stay competitive. Whether it’s major changes like a rebrand or store remodel, or small things like the way you format your emails, don’t stay stagnant.
Retail is changing. The important thing is that you are too.