Hoffman Estates, Ill. - Sears Holdings reiterated to shareholders its plan to invest heavily in its e- and m-commerce operations to help return the company to profitability.
Speaking at the retailer's annual meeting at corporate headquarters here yesterday, chairman Eddie Lampert, CEO Lou D'Ambrosio and stores president/chief merchandising officer Ron Boire said they will continue to beef up the company's website and multichannel Shop Your Way Rewards loyalty program, look for new licensing opportunities for its private-label brands, and improve the in-store experience with better lighting and improved product adjacencies.
The executives also indicated that Sears may continue to back away from the steep price promotions that marked its majap merchandising strategy in recent years. Appliance discounting contributed to its sharp earnings declines last year, the company conceded, while better majap margins were largely responsible for its improved first-quarter results.
Lampert said that Sears has spent hundreds of millions of dollars on "customer engagement," including the three-year-old loyalty program which provides members with personalized mobile coupons. Membership has doubled over the past year to tens of millions of customers who have increased their store visits and average transaction size, and are using their points to make purchases across all Sears brands and categories, he said.
Boire noted that the in-store improvements -- which also include changing displays to highlight key categories and relocating the check-out counters to free up space and improve cashier engagement with customers -- will be tested in four stores.
Lampert didn't answer shareholders' strategic questions about future sales or spinoffs, or the possibility of taking the company private.
In a research note, Credit Suisse retail analyst Gary Balter lauded management's efforts to encourage its customers to shop online, at stores, through a mobile app, or to pick up their purchases in-store. "We wish more of our hardline retailers would appreciate that the consumer has changed for good and that serving them the way the customer wants to be served is the only way to compete in the future," he noted.
Nevertheless, he argued that the operating businesses are overvalued and that Lampert and his team "are trying to make lemonade out of two very rotten lemons."