Can Sears Holdings Capture Millennial Shoppers?

In the midst of declining sales, Sears Holdings seeks to transform to a more "asset-light, member-centric integrated retailer" and opens a revitalized Kmart store aimed at providing a new brick-and-mortar experience. 

"We continue to face a challenging and competitive retail environment," said Rob Schriesheim, EVP & CFO, Sears Holdings Corporation, of the company's second quarter 2016 EBITDA loss of $191 million, an improvement of $35 million versus last year. Kmart and Sears Domestic comparable store sales declined 3.3% and 7.0% in the quarter.

As the company struggles to win over the buying power of millennials, Kmart unveiled a revitalized version of itself at its store in Des Plaines, Ill, in August. The refreshed store is part of an ongoing strategic marketing and rebranding initiative to provide enhanced, new and exclusive offerings to a new millennial audience.

Meanwhile, Schriesheim noted the company continues to make progress in its transformation to a more "asset-light, member-centric integrated retailer" leveraging its Shop Your Way platform. Sears Holdings is home to the Shop Your Way social shopping platform, offering members rewards for shopping at Sears and Kmart, as well as with other retail partners. Member sales penetration has grown from 58% to 75% since 2011.

"Going forward, our focus is on increasing our level of engagement with our members," said Schriesheim. "We will continue to apply our resources towards better understanding the wants and needs of our best members so that we can apply these insights towards increasing engagement and strengthening our relationships."

The Shop Your Way platform, which adds a variety of social and sharing features, on top of loyalty-related coupons and e-commerce, depends on member activity to generate social benefits and insights.

"Our reputation and brand will change when our members are more engaged with the Shop Your Way network," Schriesheim.

The new "Whole Lotta Awesome" Kmart store initiative is also based on customer insights and feedback.

"We are excited about the re-launch of the Des Plaines store because it exemplifies our dedication to our members and it's in our own backyard," says Alasdair James, president of Kmart. "We want our members to know we are listening to their feedback and bringing them new products, deals and experiences they'll love!"

Some highlights of the Des Plaines store include:
  • The "Happy to Help" Center – an improved customer service center, including a kid's shop where they can get toys, candy and more with their parent's Shop Your Way points – no money required
  • The launch of the Kmart new Brand Guarantee – every member is guaranteed a minimum of $100 in coupons in their app, every day.
  • Shoparazzi – a free personal concierge service that, when provided a member's list, will do the shopping for them. And if Kmart doesn't carry the product, they will find it at another store and it will be waiting for the customer at checkout.
  • Enhanced aesthetics – including new signage and wider aisles.
"In an effort to evolve the Kmart brand to better serve our members, we will continue these efforts to test and learn at our stores," said Kelly Cook, Kmart's CMO.
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