Pioneering Start-up Retailer Struggles, Aims to Cut Costs but Lacks Plan to Grow Sales

A start-up retailer, founded on selling just one product category, rapidly gains traction by delivering the product to your door faster and more efficiently than any of its contemporaries. They do all of this while providing better prices, a higher level of customer service, and greater convenience than your local brick and mortar stores.

Before too long, they rapidly expand their offering from a single product category, to selling nearly any item you or I could ever want, or need. They grow rapidly, out maneuvering competition and capturing enormous market share, defining the American retail landscape. They have a wildly successful in-house brand in every product category. They even open brick and mortars stores to better serve their customers. One-in-Three American families have their credit card…

Last week, this “disruptive start-up”, better known as Sears, announced a $1 billion cost-cutting restructuring plan that aims to keep the once-ubiquitous, now floundering retailer afloat. Sears aims to close over a hundred underperforming stores this year. They seem happy to continue diluting or selling off valuable in-house brands that once made them so profitable. Most recently the retailer sold-off their Craftsman tools brand and have also announced intentions to further dilute its Kenmore and DieHard brands as needed, to raise capital and cut costs.

Notably lacking from the announcement was any plan or even intention to drive more traffic and more sales to its stores. While cost-cutting may buy Sears some time and keep bankruptcy at bay, without a solid plan to increase sales the future does not look too bright. Amazingly the retailer that was the ‘Amazon’ of the 20th century may not make it much further into the 21st.

Amazon and others should take notice: it doesn’t matter if you have innovated, it matters that you are innovating today.



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