4 lessons consignment shops can learn from Sears’ downfall
January 10, 2019
The takeaway for today’s consignment shops
“RIP Sears.” That was the subject line in a recent RetailWire email. According to the article, Sears is close to liquidation. They’re hanging on by their last thread. It’s sad. A trip with my Dad to Sears for tools was a regular Saturday morning event at my house. For over 125 years, it was an anchor for many suburban malls and a staple for tool and appliance buyers. So, what are the lessons consignment shops can learn from Sears’ downfall? Listen to the words of a few retail experts.
Experts say Eddie Lampert, current chairman and former CEO of Sears Holdings, ruined Sears. His expertise was in finance, not retail. In fact, incompetent leadership is rumored to have caused the downfall of Toys “R” Us and JC Penney too. Of course, wisdom tells us that very few consignment shops (if any) have greedy CEO’s looking to rake in millions to line their own pockets. However, we do know without strong leadership, any business fails. Success always begins at the top. What can you do in 2019 to improve your leadership skills? Sign up for our Consignment Business CheckUp. Examine your shop as well as your role as the business owner. For example, the CheckUp asks about your future vision, financial planning and current team of employees.
Growing and changing within our industry is part of the path to success. Neil Saunders, Managing Director of GlobalData lists the lessons learned from Sears, “don’t starve business of investment, aim to create financial stability…create a sound internal organization…have a clear point of differentiation and reason for existence, and evolve with the times.” That’s a mouthful, but the lesson for consignment shops is clear. Invest in your business, offer stable management, market your differences from other stores and be open to change. 2019 is your year. Upgrade the look of your store. Or, modernize your POS system. Don’t merely rely on past successes.
Many experts blame Sears for not sticking to its strongest message. While growing up, we always thought of Sears as a man’s store. The only reason my Mom shopped at Sears was for a new refrigerator. Buying clothing seemed downright weird. When they sold off their exclusive brands such as DieHard, Craftsman and Kenmore; stopped offering services like auto repair; and didn’t convert their infamous catalog to an online store, they lost their branding. Consignment shops need to have a solid brand. If you’re not sure about yours, read 6 tips to build your secondhand store’s brand. Success comes with a confident store identity.
As always, it revolves around your #1 resource, your customer. How well do you know your shoppers and what they expect of you? The customers of consignment shops are unique. They choose you for that personal attention. Likewise, they love hunting for a bargain. As Jeff Sward, founding partner of Merchandising Metrics writes, customers “shop product, pricing, presentation and path-to-purchase.” Owners of consignment shops need to remember these 4 P’s. Train your staff thoroughly. Read 10 customer service tips your sales team needs to adopt today. Remember, customers want to connect with like-minded people, not buildings.
It remains to be seen whether Sears can survive. Heated negotiations are going on even as I write. Above all, remain true to your customers, employees and brand. You’ll be in it for the long haul, I’m sure.
