Case Study: Sears, Roebuck and Co. Vs Wal-Mart Stores Inc.

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Rewards, which allows customers to earn and save in a number of ways and offers an entire online store with products from appliances to fashion to toys. However, it has ignored the customer preferences over the years. The problem is that Sears has relied on this flawed loyalty program in a flawed attempt to bring customers to the stores. The loyalty of customers is based on their changing needs but Sears failed to do so.

Wal-Mart Stores, Inc. outperforms Sears Roebuck & Co. in marketing strategies. According to Bagons (2013), Wal-Mart Stores, Inc. has several outstanding marketing strategies that make it occupies a big market share. The first is the low prices it offers their products for. The guaranteed low prices are very attractive to customers since prices are the important elements customers will consider when they are seeking for products. There are no guaranteed low prices in Sears even if there is a reward program. “Shopping” actually takes place before “reward”. The second is its extremely easy access for customers. Wal-Mart Stores, Inc. has thousands of stores all around the world. Even if customers don’t live near one, they could always use their internet store and buy from there. This strategy makes marketing to customers much easier since it’s easy for the customers to find the stores and consequently do business with them. On the other hand, the customer service is available for customers 24 hours a day, which help maintaining customer satisfaction and adjust the problems in time. The locations of Sears are not as impressive as Wal-Mart--not that many, not that convenient and not that close to the neighborhood. Even if many of Sears are located in shopping malls, they are easily ignored by customers since Sears is not the main part of shopping malls. The third, as mentioned before, is Wal-Mart’s supply of all types of products. Anyone coming to Wal-Mart could find something that they are seeking for. To this extent, Wal-Mart gives customers a much broader appeal to all personality types. Even if customers’ needs are changing, they will finally be satisfied in this retail that almost contains all kinds of products. The fourth strategy is social media campaigns carried out by Wal-Mart. Social media campaigns have become a prevailing marketing strategy in our times. Since it is one of the best types of marketing due to its consistent results, all large companies including Wal-Mart have focused a lot of resources on it. Blogging and video sharing have proven to be the best types. Based on social media campaigns, Wal-Mart has become a retailer that is known to every household. As a result, the customer base of Wal-Mart is more steady than Sear’s. It’s understandable that customers prefer to go to a close retailer in which the low prices are guaranteed and more products could be found.

Service

Sears did a great job in maintaining the penetration of Credit products in all their sales and service channels which increase their revenues of the Retail and Services business. By suggesting customers to use the Company’s domestic credit operations, Sears attracted many customers whatever old or new to purchase goods and enjoy services. According to the report by Don Edwards, at the end of 1997, Credit had 27 million active customer credit accounts, with an average balance of $1,058. The traditional charge card occupied 90% of total receivable. It is obvious that Sears used to offer a good Credit service and did attract a lot of customers. However, based on Sears’ recent year’s performance on service, Sears does not perform very well. According to Loeb (2014), “Under current leadership, the company has ignored customer preferences.” The key of the service is around the company’s target customers. If the service cannot reach the target customers, then the service is not good. Now the fact is that Sears ignored the new trend and only relied on the loyalty program and fail to attract customers to the stores. That is why in 2006, Sears restructured its operations and these operations are run by people with little retailing experience. It showed that Sears does not care about the quality of the service. Thus, Sears used to successfully attract customers and made the annual sales increased, however, since the wrong strategy, their service cannot help them to appeal new customers.

Wal-Mart added another financial service across the country last year. This retailer announced in Apr, 17, 2014 that customers can transfer money to and from any of its 4,000 stores in the U.S. and Puerto Rico. This financial service is not new to Wal-Mart customers. According to Touryalai (2014), Wal-Mart has played the role as a bank for a long time. This company once fails to get a bank charter. After this, Wal-Mart tried to use other ways to provide financial services to customers which also included the new financial service announced recently. The aim of Wal-Mart’s service is that earning money by providing service and keeping shoppers stay longer in stores. Based on Ben Jackson (2014)’s understanding, who is the senior analyst at Mercator Advisory Group, a payments and banking consulting firm, offering financial service is an extension of Wal-Mart larger financial service strategy. Another service Wal-Mart has is that the company establishes the new partnership with DirectHealth.com in 2014, which can help consumers to shop for health insurance. “This approach is similar to what we saw with Wal-Mart’s retail clinic strategy, where they leased space in their stores to local health systems rather than operating their own clinics,” said by Alicia Daugherty, who leads the Advisory Board Company’s marketing and planning research. Partnering with DirectHealth.com also helps Wal-Mart to know how consumers shop for health plan.

Comparing these two companies’ performance in service area, both two companies made some effort to service customers and to satisfy them in order to keep them stay longer in stores. From the statements of income of Sears in fiscal year 1997, the merchandise sales and services section showed the increase trend than the two previous fiscal years. Therefore, the total revenues of Sears in 1997 are $41,296 million, which is 3,232 million more than 1996. With more and more evidence showed that Sears is not as it used to be, investor needs to consider whether Sears is still worth investing. Due to the wrong strategy and leadership method, Sears does not provide high-quality service in stores. Shoppers will not feel satisfied if only the product and the service are good. The service shows company’s attitude towards customers. However, the CEO of Sears, Edward Lampert claims that inventory reductions, expense management and a ‘member-based’ business model will save the company instead of focusing on retail business and improving