Life After Debt: Inside Sears

Changing Sales Strategy at Sears

(CBS)  Inside the Sears flagship store in Chicago as customers look at merchandise, up in the second floor war room, Sears is looking at its customers and tracking their internet page clicks and purchases.

Jeff Hamm, IT Director at Sears says, "We're watching you and watching you buy stuff and learning from you."

As CBS News correspondent Anthony Mason reports, that research is more important than ever with the earthshaking shift in American shopping habits.

"All the metrics, consumer confidence, consumer spending have declined at a rate we haven't seen in 40 to 50 years," said retail consultant Michael Dart.

Richard Gerstein, head of marketing for Sears and Kmart says, "I think the customer is re-assessing their personal values and what value means in the world of shopping."

Inside the sprawling corporate headquarters, Sears executives are scrambling.

The company made a profit in the first 3 months of 2009 but overall sales were down nearly 12 percent from a year ago - to an average of just $64 a day according to a recent poll. That's down 38 percent from a year ago

Lisa Schultz, who leads the New York apparel team that designs for the 3,800 Sears and Kmart stores, says the economy will definitely affect the choices she makes.

To cut costs, Sears designers are actually developing their own fabrics. They're making blouses with machine washable polyester chiffon at $20. It looks and feels like silk that retails for $100.

"Price is very important," says Schultz.

Sears also is promoting a guarantee to replace any kids clothes that wear out.

Sears is the biggest appliance seller in the country, but sales have slipped. So soon it will allow buyers who lose their jobs to suspend payments.

And at store kiosks, Sears is even offering to find items it doesn't carry. They'll actually go on other websites to find the items you're looking for, and process it for you without charging you extra. He says, "we don't want you shopping anywhere else."

After closing 28 stores last year, Sears will shut another 24 this year.

In this recession, as shoppers are redrawing the retail map, Sears is trying to make sure it will still have a place on it.

[jaymic24]

Im one payment away from zero balance on my sears account that I opened back in 1999. Recently this past summer I called sears to asked if they can lower my interest from 24.9% to 9.99 (which I have on 2 other competitors cards). They flat out said "NO" and slammed the door on my face. I have always paid on time, and now my balance is down to the wire. Well, after this last month payment I will lay to rest this long standing account..guess who'll be slamming the door on who's face this time?!....

[aprilheart]

I agree with cattiej. I, too, responded to the rise in interest rates on my Sears card by closing my account and cutting up my card. The clothes
that Sears carries are not appropriate for wearing to work, and I don't appreciate the fact that everything in the store is made in some foreign country. I feel as if I'm shopping in Wal-Mart or Target (by the way, I no longer shop at Sears or Wal-Mart or Target for this reason). Wake up! If Sears cannot please its customers and give them what they want to buy, they should close their doors forever.

[underdogcity]

The way Sears deals with their collection strategy's is way way off base. They call and call and call to collect, and when you offer to pay a reasonable and decent monthly payment until you get on back your feet again, the say NO!. They say "Pay the amount WE say!" So It's either their way, or in other words, they don't want your money! Not to mention in the meantime, they just keep adding more interest to your unpaid balance.

Go suck an egg Sears! I hope you're on your way out! There so many other places to shop these days!

[animeboy413]

I love Sears, the store employees i know are so friendly, they help me find a great PS3 console, to play my games, and told me what i needed for online gaming, thanks to there hepy, i will remain a loyal customer to them, one day i would like to work there to learn from there.thank you Sears for making my shopping very easy, and less stressful. i just wouldn't know what to do without you

You guys are always there when i need you, rather christmas, or easter or my mothers birthday, soomehow you pick out the perfect gifts for my family.. even my grand mother looks forward,to seeing what am i going to get her next:). Walmart, Kohles, JC Pennedy, and Macys are cool to. but Sears has this special place in my heart :)

[igswhidbey]

Sears, bad management in store, little customer service, ugly clothing

[kenmacf1]

You have summed it up nicely. Too bad they don't listen.

[cattiej]

We too have cut up our Sears credit card. We had a Sear credit card since 1965. There interest is 26% and the service on applicances is terrible. The outsource the work on your appliances to anyone who SAYS they know how to work on appliances. No longer are the repair people Sears employee's. There women's clothes department has clothes that are cheaply made, only styles for young women who are not picky about how the clothes are made. You used to be able to buy clothes made in the U.S.A at Sears...no more. Everything is made in a different country. Many of the appliances are made in China, or Mexico. You can't buy jewelry, shoes, clothes, dishes, linen's, tool's that aren't made in some other country. We are NEVER, EVER SHOPPING AT SEARS AGAIN. This is just another American company, that has sold out, they pay the big CEO's millions and the sales staff a pittance..Shame on them, Let the cat out and close the doors..Goodbye to a once great American company.

[jaymic24]

sad...but true.

[Howellstephen75]

Sears is not going to be able to make any kind of come back until they do something about the goons they have doing the service work on their appliances. It is so hideous I can't possibly tell you how bad it is. They lie over and over and over. Mostly they spend every conversation trying to sell a service contract rather than arranging to fix your appliance. On top of that when you call the home office to complain they reconnect you with the same goons you spoke to before. Growing up my parents always bought Sears appliances. I have bought my last anything from Sears. As far as I am concerned it is time for them to just roll over and disappear.

[6starpat]

Just saw the segment on Sears and their marketing strategy. I have been a Sears customer for over 50 years but this afternoon vowed to not step inside a Sears store ever again. Why - My washer, less than 3 years old, stopped working last week. Knowing how long it took to get a Sears repairman to my home I called my local repairman who has always been able to fix my appliances. After much research he found literature matching the problem with my washer. Sears would not give him any info on the machine and what might be wrong. Everything pointed to the motor control board, including a call to Whirlpool who manufactured the machine. The part (incidentally made in China) did not solve the problem. More phone calls, internet research and a different part ordered. Washer still not working. In over 20 years of doing repair work this man has never given up on fixing an appliance until today. No way to check if replacement parts defective. Suggested I call Sears Repair. The first open appointment they have in my area is July 17th - over 3 weeks away. To me this is totally unacceptable service. I can recite a number of friends who have bought Kenmore appliances in the last 3 years and have experienced similar situations. Quality is so poor, repair service slow, expensive and not always done correctly. I have owned Kenmore appliances for 48 years with no complaints until the last 3 years. I bought washer, dryer, range, refrigerator, dishwasher and microwave 3 years ago for a new home. The microwave was defective and we were fortunate it did not catch fire. The timer on the dryer has never worked correctly. My loyalty is no longer to Sears. Pat Gamboa [e-mail]

[Epony]

In regard to "Inside Sears," I find it vexing, as a female shopper to see the boardrooms and senior management of these large retailers filled with the complete antithesis of it shoppers. The men running these struggling companies would never shop in the stores they run. They should turn their posts over to their wives,or significant others if they want to understand their customers. The VP of Marketing was laughable...if it wern't for his job, he would NEVER be a Sears customer. It was also laughable watching "Sears" observe its customer's shopping habits. It was like watching Aliens observing Earthfolks.