When Lampert took over Sears there were so many articles drawing a parallel to Buffett taking over Berkshire way back in the day. Both were successful hedge fund managers who took control of a declining business. Ostensibly, Lampert was going to leverage Sears' assets (mostly the real estate) to develop a Berkshire-esque portfolio of strong companies.
He started off in that direction, buying Lands End and making a bid for Restoration Hardware. I recall an interview or press release laying out a vision for Sears as a "store of stores" that showcased iconic American brands - Kenmore, Diehard, Lands End, etc.
Somewhere along the line that dream died, and the cash flow was used mostly just to repurchase shares while letting the stores Languish. A bunch of concepts were tried in a handful of stores, but none promised an attractive ROI so they were dropped. Bruce Berkowitz is another investor that used to get compared to Buffett an awful lot, and tied his fate to the Sears project. He's still buying more shares and saying he sees value there.
I don't really have a point other to say that investing is hard, and identifying talented value investors who will outperform in the future is even harder. Whether this was a dumb idea all along, or a poorly executed good idea is tough to say.
I used to buy all my clothes from Land's End - easy, convenient, and "good enough" quality. After the Sears acquisition Land's End went from occasionally "iffy" to rarely satisfactory. Everything became the cheapest, thinnest, and most poorly fitting. At the same time, Sears went from having the wrong products to having poor quality products (like the Land's End they started carrying.) The "dumb idea" vs. "poorly executed" is easy for me to decide -- I'd say both.
I generally agree. At best, my personal impression is that Lands' End isn't as good as it used to be. (Note that Lands'End isn't actually part of Sears any longer although there are still Lands' End stores within Sears stores.)
Having said that, Lands' End's drop in quality came during the same period that so much manufacturing was moving to Asia. I suspect that whatever corners Lands' End started cutting were the same corners that most of the other brands it competes with were cutting as well. And this may well have happened with or without the Sears acquisition.
I read the book by the Patagonia founder, Yvon Chouinard, where he described how they had to send people to their manufacturers to be involved with quality, and how even then they would get bad batches and be forced to dump the clothes at a big loss and switch manufacturers. So it can be done - but perhaps that isn't what would be suggest by Ayn Rand. It isn't selfish enough.
I have no particular reason to believe that Ayn Rand would champion cutting corners in product quality to save cost--especially if doing so wasn't a good long-term business strategy.
But, to your broader point, especially if you're going to use low cost overseas manufacturing extensively keeping up quality implies a lot of hands-on monitoring and working with the manufacturers closely.
Wait, a company decided on their own to build a better product? Without government regulation? And then became wildly successful? I don't think Ayn Rand would have a problem with that.
In the Ayn Rand books I've read, the characters (at least the protagonists) are obsessed with doing things the best way possible; Their motivations seem to revolve around a love for building and creation, not monetary gain. Chouinard could probably be a Rand character.
If that's from "Let My People Go Surfing"[0], it's a light-weight (easy reading) book with what seem to be some pretty profound simple business observations and accounts of how Patagonia made decisions. I certainly enjoyed the book, but I think I don't have a deep enough business acumen to say whether or not the book is realistic for more than just Patagonia.
But if it worked for Patagonia, that operates in a pretty old industry, shouldn't there be at least a number of take aways that would apply to many or most industries?
I've not read the book yet, so it's not a rhetorical question. Living in the Pacific Northwest Patagonia and their company story and ethos are known to just about everyone who's ventured into the outdoors.
I'm not sure how relevant lesson from Patagonia are to a more mass market retailer. I like my Patagonia gear. I also bought most of it at outlets where it's merely expensive. It's certainly a high-end retailer. Making similar tradeoffs at a Sears or, as was recently the case, JC Penney's don't necessarily work.
That's entirely why I stopped buying Banana Republic and J. Crew. Their quality just plummeted 5-7 years ago. Their cashmere became so thin and pilled even within the first wear or two. It was ridiculous.
This is going to sound crazy like I'm an old man (I'm not, I'm 32!), but I've been loving the quality of both Tommy Bahama and LL Bean. They actually have some hip stuff, not just printed hawaiian shirts and duck boots. Tommy Bahama jeans specifically hold up super well, and I'm a weightlifter so they are cut to handle my meaty legs. They seem to be made very well. The fabrics are very thick, sturdy and you can tell the quality of the threads.
I've been finding screaming deals on ebay for clothes, so have been "NEW without tags" Tommy Bahama stuff. Even the gently used stuff is such good quality that you can barely tell it's been worn at all. So for things like cashmere sweaters it's great value. For example I got a $250 mock sweater for $40 and it's awesome. I get more compliments on that thing than anything else I wear to the office. Kind of like this one but in more of a purple bordeaux color:
Anyway, imo the quality of both LL Bean stuff and Tommy Bahama blow J Crew etc all out of the water. They're like how Lands End used to be, before Sears ruined them.
It is not to say that nobody can be successful in brick and mortar retail, but Buffet more or less rode the Great Moderation. Not to take away from him, but after equities stopped rotting around ... 1985ish, things were sort of on autopilot. The Dow broke 2000 in 1986...
People talk about the "Sports Illustrated cover jinx", and even a similar EA video game cover jinx, where making the cover precedes a period of underperformance.
I think a similar effect could be claimed for being called the next Buffett. There is a long list of investor casualties after such a comparison (including the ones you mentioned).
Most recently I'm thinking of Bill Ackman, who was on the cover of Fortune last year with the title "Baby Buffett"... right before a painful 20% tumble.
Agree. Think it more just speaks to how hard it is to generate alpha in investing.
It's like being the MVP of the NBA. The competition is fierce, and you are playing a zero-sum game, hence generating returns greater than available by putting money 'in the market' is hard and (sometimes) ephemeral.
Making the cover of a magazine potentially highlights a zenith period in a persons career. It's pretty unrealistic to assume anyone, entrepreneur or executive or athlete, to consistent perform at their highest level or exceed it. If anything, it shouldn't be unexpected for a persons performance to regress immediately afterward due to probability.
It should be noted that taking over Berkshire was probably the biggest mistake of Buffet's career. If journalists were comparing the purchase of Sears with the purchase of Berkshire they were already predicting trouble (probably unintentionally though).
Yes it was incredibly successful because Buffet decided to turn it into his own holding company where he aggregated all his other purchases. But it was the other purchases that were successful, not the Berkshire business itself.
The Berkshire business was a New England textile company that kept suffering as the textile industry was slowly but surely being moved out of the United States. Buffet has said many times that buying Berkshire was a mistake.
Buffett himself says it was his biggest mistake. He had some stock deal going with the Berkshire CEO and felt he was the victim of a bait-and-switch. He bought Berkshire so he could fire the guy.
Two things: 1) People still act from emotion even when there's a hell of a lot of money at stake and 2) that kindly grandpa thing that Warren Buffett has going is an act.
Buffett has called it a big mistake. Berkshire Hathaway was run with almost zero capital investment, and instead of modernizing factories they just shut them down. The success came once they were finally out of the suit lining business (what BH actually did) and into the holding company business.
I think it probably influenced his thinking, and putting more emphasis on known brands. Berkshire Hathaway made suit linings, a commodity, and were not a known consumer brand. After BH, he made investments in See's Candies, Coca Cola, national or global name brands that have a hold on their market - a "moat" as he calls it.
This long MetaFilter comment from 2007 is my all-time favorite explanation about what Sears had, and what they could have become, and how they let it all slip away:
"In 1993, Sears had the most extensive and sophisticated mail-order retail operation on the planet and they closed it. Two years later, Amazon.com launched"
I have long wondered why they didn't do the 'same day delivery' thing once Amazon showed that people would pay for it. With all their locations and space, they have inventory near most of the population. Add some uber-contractors and voila! ,, well they could have tried it anyway.
I have to be careful buying tools from Sears now (which is really the only reason I go in there), because they've started selling cheap knock-off stuff under the Craftsman label, that isn't up to the old quality standards and doesn't have the Craftsman lifetime warranty on it.
I think the worst was a socket set I picked up, where the chrome was literally coming off in flakes after a couple months.
All Craftsman hand tools are all made in China now. My metric Craftsman wrenches are made in China and my SAE ones are made in the USA. The difference in quality is obvious. Not saying that Made In China == Low Quality, but in the case of Craftsman tools it's true. Plus it makes their "lifetime warranty" feel like a load of BS when the replacement for anything more than 10 years old is going to be vastly inferior to the original.
The middle market of hand tools has been gutted. If you're not buying top-of-the line stuff like Snap-On, Knipex, etc. you might as well just shop at Harbor Freight and save some money.
Considering that Apple and others are able to get extremely high quality manufacturing out of China, it's a shame this isn't more widespread. I guess consumers don't really expect much better.
I bought a wand-style garden sprayer with the Craftsman lifetime warranty about 5 years ago. I'm now on the 30th replacement. I have to be careful about the returns, so that I don't accidentally get one of the sprayers I had already returned as broken. They restock them sometimes.
The first one lasted about a year before breaking. Then they changed the design to "cheap Chinese chic", and they usually take 1-2 months before they start leaking. A new rubber washer helps at first, but then they start leaking inside the case.
I probably wouldn't bother with the returns if I didn't live so close to the Sears store, but the lifetime warranty is certainly no indicator of product quality.
I think all the chrome sockets with the Craftsman brand are still unlimited lifetime warranty.
In any case, I also noticed the downward shift in quality of Craftsman tools, corresponding with the time that the contract manufacturer was switched and a lot of production went offshore. Fortunately, I'd already mostly switched to buying second-hand SnapOn hand tools, and I have to say that while I was generally happy with the old USA Craftsman tools, I wish I'd have switched to SnapOn earlier.
The ratchets in particular are night-and-day better, IMO. Do yourself a favor and try one of the nice common SnapOn ratchets (a T72/TL72 or an F80). They're quite a bit more pleasurable to use, IMO. SnapOn stuff holds its value pretty well, which means it often gets pawned or sold when a mechanic goes out of business. I have bought maybe 5% of my SnapOn stuff new; most has been second/third hand and it's just as good and 30-40% the price.
Snap-on is good stuff, but it can be a little tricky finding a place that honors their warranty if you break something. I just give whatever it is to my Dad, who works in a plant that has a Snap-on sales rep swing by once a week, but without that connection, I wouldn't know where to go with it. Craftsman, at least you could find a Sears store to trade it in just about anywhere.
I've wondered about returning broken Snap-on tools, and glad I read your post. I have a box of broken tools, and I don't want to bother a driver. It's not that important. Tools have become so cheap.
Snap-on should go out of their way to honor their warranties though.
What Snap-on never really got--was that they are lucky to have customers, at what they charge for tools.
I don't blame the guys running around in trucks--that's a whole other franchise debacle. Snap-on should compensate them(franchise owners) for Any returned tools. Why--because that's what they promised when we bought their first overpriced tools.
If you are dead set on Snap-on, just buy the 3/8" metric, and inch ratchet set. I bought mine second hand. Everything else can be another brand.
I saw guys spend $40,000 on tools. A lot of them were too young, nor cared about ROI.
Never forget the Snap-on rep in automotive school. He was worse than a drug dealer. (I do understand his persistence. I don't think Snap-on makes it easy for their employees/franchise owners.)
Dealers are all franchises, not 'drivers'. The warranty is usually under 2% of sales. If it goes higher than that, the management start to whine. Mine was almost never higher; the most expensive thing I replaced under warranty was a $10,000 engine analyzer.
Getting a dealer to warranty tools should not be considered a hassle for him if you do it at one of his stops. I would generally not go chase warranty - but if someone jumps on the truck with a broken tool I would replace it without thinking. Snap-on compensates the dealers 100% of cost of the tool, so it is not the dealer paying for it. He also gets a chance to sell you something new.
Lucky to have customers? Snap-on has 4000+ dealers in the USA, and each one services about 300 customers. Average sales for a truck is around $500,000 per year now with 35% gross margins. Lots of customers, way more than you would ever think. Some of my biggest customers were in weird locations, like a lawnmower place that had all giant tool boxes in them. A KRL1033 is a big bench toolbox and costs $11,000 for the EMPTY toolbox https://store.snapon.com/KRL1033-Series-Roll-Cabs-Roll-Cab-T... . I wrote 120 extended payment contracts in 1991, most of them for big toolboxes. I was #2 that year at the branch.
$40,000 is a lot of tools, but that is cheaper than some college educations these days with much higher residual value. My biggest single sale was $92,000.00 for a 2 man shop's insurance claim. That was 2 large boxes with hand and airtools in them, no equipment. Granted, they were my best customers and had the receipts to prove it. Insurance company pressured me for 10% off, but that was ok with me.
Your Snap-on dealer may have been persistent just to collect money. Dealers run a no-interest account for most of their 300 customers. The lions share of the job is collecting money, selling tools is easy. Collecting money is hard, especially from students. I ran about $50,000 over 150 customers. I know other dealers that would float $300,000 on the street, guys in Alaska and the other oil spots.
It was a good training business. I don't regret it, I made a lot of money. In 1991 I made $85,000 with only a high school education. I was 21 years old. I call it a training business because it is hard to expand. There is no practical way to hire employees besides having a complete second truck. Also, the more accounts you get sooner or later they want to cut your area. The change to franchising actually gave dealers more rights at that point. My area was cut 3 times in 6 years.
At the end of the day it is a service job, and we are servicing the needs of professional tool users, people that make their living with those tools. It is very competitive and I don't see anyway the service level could be kept up without the high prices and the current margins. The professionals need the service to function, the Snap-on dealer was also the one guy that you knew would have the special tools you needed to get that one thing apart. There is 12,000 items in the catalog and the basic wrenches and screwdrivers make up a small part of it. Most of the tool count is in special wrenches and sockets.
You could well be right, I just spent several minutes at sears.com looking at socket sets and all that I looked at, including a number of the lowest, "only" 4 star rated ones, had lifetime warranties.
However, by giving any hand tool labeled Craftsman a less than lifetime warranty, they've done terrible damage to the brand, you shouldn't have to worry about this when shopping at Sears.
I stopped buying them about ten years ago. I now just buy the cheapest thing available for hand tools that have no special use. For powertools I stick to Hilti. Air-driven Snap-on. Specialty tools are purchased from Snap-on or Matco. Craftsman used to be a good brand, now its just a brand.
I recently built a kitchen and made the huge mistake if buying appliances from Sears. I am in awe of how badly this company performed.
First delivery attempt, they called the night before to give me a window. Delivery driver called me to make sure I will be home and that he would be there in 30 minutes. They never showed up. After calling I learned the products were not in stock.
They did the exact same thing on the second delivery attempt.
Third delivery attempt they deliver a damaged fridge.
Fourth attempt, they opened the truck and they did not strap down the fridge. Parts everywhere.
Fifth, they got it right. Normally I would have cancelled the order but the experience became a curiosity. How badly could a company mess up? Turns out, a lot.
I ordered my daughter's new bed from a different store with white glove service.
First attempt. Driver claimed no one was home. I was doing home renovation. My contractor was there, with no less than 10 other people doing work. The front door was even open at the time as two people were working on and around it. Contractor knew to expect delivery.
Second attempt (weeks later). They delivered some parts of a bed, did not assemble what parts were there. Repeatedly gave different stories about where the parts were. They made many claims about where the parts were, none of which seem to be true and some of which conflicted with each other.
Third attempt (more weeks after countless phone calls). Driver claimed he could not make it up hill to house. Left. Argument with customer service. Driver returned. They delivered one more part. Did not assemble anything.
Fourth attempt (months after original delivery date). Finally delivered the final piece. Moved mattress and box spring to hallway. Assembled bed. Left. Didn't bother to put boxspring and mattress back. (I checked their assembly work, which was fine.)
Since then I've gotten multiple phone calls from them telling me the bed is now ready for shipment.
The drivers get marked down for being too far behind schedule, but the company also schedules more stops than can realistically be done in the time frame. So it's not terribly surprising that they're incentivized to cheat in this way, and gain back some time in their schedule...
They just picked up a guy from Amazon and are building their data science team. Should be interesting to read the same article next year.
Edit: I think this is going to have zero impact on their biz. I got a recruiter solicitation earlier this week and started laughing. Additionally, "PhD is a firm requirement."
The time to have done that was 15 years ago. At this point it's too late. Really, Sears was the Amazon of the past century. They built an empire on selling "everything" to anyone they could reach with a package. They drove innovation in shipping and inventory management to the extent that virtually no one could even try to compete with them during their dominance.
And then they sat on their comfy chairs as this "Bezos" guy with nothing but some computers and investment cash walked through and did everything they were doing better.
At this point, what does Sears have that even counts as an asset in that competition? Amazon has bigger and more warehouses and a ten year lead in optimization of their supply chain.
Agreed, except I would extend those numbers to 20 years. I loved receiving the sears catalog as a kid, especially the xmas edition. I bet a lot of it was tracked through computers even in that day.
I do consulting - and I spent some time with the Sears data science team. Don't get your hopes up. A broken culture is hard to change. They seemed pretty "downtrodden". (I should add that they were all good people. I would work with any of them again.)
I know a few people on the management team. It's basically a sinking ship with no one trying anymore. They'd do better spinning the brand into it's own entity under a licensing agreement with a competent ecommerce company like Newegg. In fact that should probably be their strategy if they want to survive. One entity for the real estate, one for the brick and mortar then another for online commerce. Then have Newegg acquire the majority share of their ecommerce business and rebrand as Sears. It'd be like lightning growth hit them since the Newegg guys know what they are doing in online commerce.
It's decades too late. Sears owned "clicks and mortar" since before there were clicks. How do you fuck that up? It takes a perversely incompetent bordering on sociopathic management to turn such dominance into terminal decline.
Stupid MBA, stats and excel driven management is capable of destroying everything.
Sears literally shuttered the catalog operation right before ecommerce was a thing. They literally had a 100 year lead on the market previously and had moderate success with selling stuff on pre-Internet online networks like Prodigy.
>Sears literally shuttered the catalog operation right before ecommerce was a thing.
The catalog operation hadn't been a big part of sears in a long time--maybe decades. Amazon's success didn't result from having the bide idea to be "the everything store." It was executing on it--and, by the way, making losses along the way that shareholders would likely never have tolerated in a mature retail chain. I'm not convinced that Sears had any particular unfair advantage as a retailer to dominate in ecommerce just because they had once been known for their catalog.
>stats and excel driven management
I think you can be pretty certain that any successful retailer is highly number-driven from picking sites to handling supply chains.
You woud be surprised by how bad K-Mart, which merged with Sears, is at keeping things you need in stock. If you want to buy something commonplace, like a particular model of Crock Pot or a particular Corelle dish, odds are about10% that the nearest K-Mart has it vs about 90% that Wal Mart has it. Clearly there is still a big difference enabled by Wal Mart's IT and business processes. Especially since once the odds of wasting time and a car trip go up just a bit the backstop is to order the thing from Amazon.
I'm not suggesting that it's advisable to run a Fortune 50 company by gut instinct.
I am suggesting that if you owned a major retailer with an established catalog model, plus a network of stores and storefronts to deliver catalog orders, PLUS a cash cow insurance company (Allstate), PLUS a broadly established payment network (Discover) in 1993, divesting yourself of those assets at that time is a particularly untimely thing to do. It's also reflective of not seeing the big picture.
The recruiting company they use for hiring people is a joke. The guy who contacted me I could barely understand, got angry when I had to ask him to repeat himself, and didn't confirm that he had set up an interview for me until the NIGHT BEFORE at 7:30pm (and I was working three hours away, so I was going to have to take a sick day at my job in order to go).
What got me was the PhD requirement. I've worked for some big names in a range of industries and to think that they only had "PhD preferred" while Sears is requiring for a large team (~15 people) strikes me as a bit odd (and indicative that they don't know wtf they are doing in this space either).
Full disclosure: I'm a PhD dropout. Hasn't hurt my salary; probably has helped since I got 3+ years work experience by dropping after quals.
One item that always struck me as something these large retailers should do to leverage their physical locations is to provide same/next day delivery. With the ability to pick up the item in store same day when ordering it online what stops them from delivering it. It would require a large investment in delivery vehicles and drivers, but some of these stores have some of that already. Sears has it because they deliver appliances and Best Buy with their Geek Squad technicians.
Some businesses do this for other businesses. Staples, Napa, OfficeMax, etc. Why not extend this to the consumer. I would venture to guess they feel that there is no ROI. But if people are not going in the store, give them a reason to buy from you anyways.
In the UK we have a retailer trying this. They are somewhat unique though as their physical stores are already more of a warehouse than a regular shop.
We have dept stores such as John Lewis that have done well integrating their business online but delivering goods to the home same day is something they would struggle to do economically.
A wacky idea: I'd like to see some product lines and perhaps some product types protected by law - so that they can only be sold at physical stores and not online. The idea is to get a minimal subset of products so that physical stores can stay in business. Ideally, these would be products where there is a benefit to buying them in-person (perhaps product expertise, fitting, visual considerations, or shipping.)
I understand that France still has bookstores because they set minimum pricing on ebooks. Perhaps a more "fine grained" approach might work to keep some US business alive. (Though I would also require community ownership and community management - we have enough billionaires trying to maximize profit at our expense.)
Just so I'm clear, you're saying that there should be a law where some goods cannot be sold online and have to be sold in stores only. And the purpose of this is to prop brick and mortar businesses up so they can stay in business?
Yes. There are some products that are better purchased in person.
Looking at this from a strictly analytic perspective, we could build distributions for each characteristic of a particular product. We would expect that some products would benefit the seller or distributor by being sold in person, and some products would benefit the buyer by being sold in person. There could be a case argued that society would be better served by both keeping some physical stores around and protecting some products so that they can be sold in those stores. It seems to me that philosophical arguments tend to ignore that different products have different characteristics - and those characteristics impact our society.
If buying those products in person really provides more utility than buying them through the internet, sure, those stores will stick around. Most things aren't that way, however, and it is only going to get worse as one and same-day delivery becomes more widespread. Particularly since brick-and-mortar stores have cut inventory to the bone, so you never know if they'll actually have what you need at any time.
I'm down to only going in a store for perishable groceries and the occasional hardware store purchase when I run out of something in the middle of a project. Everything (and I'm not kidding) else, it's more efficient and less aggravating to grab on Amazon and use Prime two-day shipping. If VR finally becomes a real thing, in 5-10 years appliance and furniture showroom stores might well be obsolete.
It's not true that better utility will cause the stores to stick around. Some utility will be external to the buyer or seller (for our society, for example), and some utility will possibly come with dis-utility to, for example, a distribution chain. But, from a strictly analytical perspective, there might be benefits worth preserving. Also there are studies showing that utility is often invisible to the buyer (consider sophisticated electronics with characteristics such as power saving or such as high environmental costs). To take a classic example, medical care allows no practical way for the customer to judge quality or to price compare - that is an extreme example, but many products have such aspects. The common justification that "markets work" represents a philosophical position, not one backed up by experience in real-world markets.
I believe that for at least ten years there has been a clear path forward for Sears. It's just that management refuses to follow it.
The way forward is for Sears to move completely over to franchising. I remember working in a small town in West Michigan fifteen years ago when a local opened a Sears franchise store, it carried a small subset of what a regular Sears store carried kind of a greatest hits.
I was certain that it would be a complete failure. I didn't know anyone who shopped at Sears and the brand would be a drag on the new business. I was totally wrong the new store was a huge hit! I got to know the manager and there are a couple hundred of these stores and the overwhelming majority succeed.
Sears is sitting on a lot of valuable real estate that they could sell if the big stores were sold. Franchise stores would popup in the communities that would support them. Just because there aren't any franchise stores in big cities doesn't necessarily mean they wouldn't succeed. Apparently the big brand still has some pull, but the overhead of the big store pulls it down.
The key is local owners who are free to stock Sears brands or chose other merchandise, people who understand their communities and can provide great service.
I used to work for a company that sold the majority of their product to sears. As the only one in the company that actually knew anything about technology, it was my job to make sure our products and company information were set up and up to date in sears' systems. Their systems consisted of multiple online management portals where you'd supply everything from product weight and size to your fax number to how you wanted to get paid, and appeared to have not been updated since 1998 or so. One wouldn't work at all unless you were using Internet Explorer 6. Updating product info required changing it in multiple places as well as emailing them a spreadsheet with the exact same info.
~4 years ago they announced that they had partnered with some SaaS provider do modernize their systems. It required re uploading all your product data, but I was excited to finally get rid of IE 6. That is until I discovered that they couldn't bare to replace their legacy systems, and the new one was just a flashy way to manage an arbitrary subset of your product data, but other changes still require using the old system.
I worked in a Sears store from 2008-2010, somewhere around 2009 I think our store got upgraded from a literal mainframe terminal to a virtualized mainframe terminal for inventory management. The box managing the registers ran OS/2 Warp.
It doesn't take long, talking to people in the Chicago software industry, to hear horror stories about working for Sears. A good friend got to see multiple coworkers recruited by Sears, only to have them return after only two weeks.
My town has a K-mart that I refuse to go to because the customer experience is so pitiful and the checkout process is glacially slow. There is no nearby competition from Target or Wal-Mart. They could own retail in this area but instead they hold up lines of customers with the stupid POS systems that are set up to print out 4 feet of receipts causing the printers to constantly run out of paper.
I saw a piece on WalMart when they were new. Customer service was their mantra. Showed a manager from a WalMart visiting a K-Mart with the journalist. Pointing out the dirt, the broken racks, the tiny number of checkout stations, the idle listless employees. Said something like "Its not hard to do better".
Customer service is non existent in a majority of the WalMarts I have frequented. Tangentially, a social worker friend of mine says she supports and shops at WalMart because WalMart employs the otherwise unemployable.
Curiously, I have had the opposite experience at Walmarts around the country. I've almost always found help when I needed it, the employees seemed reasonably competent and none of these "unemployable losers" that I keep hearing about on social media.
To the extent that retail is still a profession, anyway. A couple of generations back, retail was a high standards industry with highly trained staff and high expectations among the customers.
On Friday I went to Walmart to pick up a site to store online order. Well, lets start with the fact they told me it would be there by Monday (I ordered it on Sat). I went to the site to store counter which was in the back. There was shelves behind the counter that were empty (shouldn't those shelves contain site to store orders for easy access?). Pressed the "call employee" button. Sat down and waited, waited, waited. Some employee on their way to the bathroom asked me if I needed assistance, "I pressed the button." He radioed in that he needed someone at site to store. Nobody. So he went to go get the person. They come back eventually guy says "sorry about the wait I was helping another customer at the front of the store." Apparently only one employee is capable of operating site to store. He looks up my order says "this may take a minute to find." and goes to the back. 10 minutes later (no exaggeration) he comes back and says "this will take a little longer." Someone else comes to site to store and presses the button. Same guy comes out and says hes looking for my order so he'll be with them in a while. Once again... apparently only one person can operate site to store and if they are busy oh well. Another employee walks by and asks if we need help. Other person was like "I haven't been helped, he's looking for this other persons order." She goes to the back to get him (apparently she can't operate site to store either). She comes out and says hes moving boxes because someone buried my order behind boxes and that's all she knows. Guy comes back out eventually with my order. Checks me out and he doesn't have a pen for me to sign that I got my order. I just took one out of my pocket, signed the paper, and gave him the pen (it was a free pen). Took at least 30 minutes altogether.
I don't get it. The whole point of site to store is for convenience but they seem to make it as inconvenient as possible.
Did they email you that your order was in, or did you just go on the basis of an estimated arrival date? It sounds as though checking for an online order is not one of Walmart's core strengths. I would imagine there's a system that they use: order arrives, gets processed in the inventory system, gets placed in a particular spot at customer service order pick-ups, customer is notified. If you came in before that process is complete you probably caught them unawares. It does sound needlessly awkward, though.
No. They emailed me 4 hours before I went there. If I went there based on the estimated time I would have been 4 days early.
It obviously didn't "get placed in a particular spot at customer service order pick-ups." It was in the normal stockroom treated like normal stock - which means people don't pay attention to quick and easy access and stuff gets piled on top. They have shelves in the site to store area behind the desk. Said shelves are completely empty. It does make sense that they don't want people taking stuff off the site to store shelves so they keep them in the back. Even though the shelves are behind the desk the desk is unattended except whe someone presses the button.
My experience is not unusual at all for Walmart site to store, if you look online you'll see plenty of similar stories.
I didn't complain at all, not even one bit. I sat down on the bench and later layed down on the bench and just waited quietly and said "ok" when he told me he needed more time. Never complained, never said anything nasty, never said anything at all unless spoken to, actually. I didn't yell at anyone or get upset or annoyed, or rude, or use a harsh tone, or anything of the sort. Never said anything but "its alright" when people said "Sorry for the wait."
So I come across as a terrible person for basically showing up and waiting quietly on a bench? What should I have done that would be pleasing to you? Not picked up my order?
Employee had to deal with crappy mismanagement, I wasn't angry at him, and I even helped him out by giving him my pen so he didn't have to go find one for the next people.
Crappy policies and crappy mismanagement causes bad customer service experience. It seems obvious the problems. Site to store orders should be in their own area for quick access and not be comingled with other stock as to not get buried. They should have more than one employee operating site to store so that if one employee is in the middle of something another can take over. Those two things would fix 99% of customer service issues with site to store. I don't think that the employees did anything wrong, they were set up for failure. I worked at a job in high school that set its employees up for failure, so I know how frustrating it can be. There was quite a few grown adults who took great pleasure in screaming at 16 year olds for things outside of their control at that job. I never do that.
I don't even mind waiting at all usually, but there is a reasonable wait time and there are wait times nobody can predict (higher than usual crowd) and theres unreasonable wait times that are avoidable.
I also never said he was young, you made that part up. He wasn't young at all.
The boy at Walmart's cell phone sales desk spent almost an hour helping my elderly mom figure out how to call and activate her pay-as-you-go cell plan, which is really not in his job description. I can't say I've had a bad experience with Walmart customer service — at least I don't remember it.
Walmart service declined when Sam Walton died and the family took over.
It's an especially awful and unpleasant store in the northeast, but generally speaking you get a higher level of service and competence in the south where they are more established and have a cadre of competent management.
Sears has good automotive repair services, decent large appliances, and a competent line of tools and car parts.
Their other consumer goods such as clothing, sporting goods, shoes, and electronics seem somehow lacking. There is a disconnect somewhere. Once, while I was browsing at the local Sears, an employee sourly commented, "We sell fishing rods but no hooks."
The prices are high compared to the other big box retailers, let alone Amazon. Their website lacks the rich shopping experience of Amazon. Speaking of hooks, there is nothing to draw customers into the store, no focus, no reason to go in and browse. It's a dull, utilitarian experience.
Sears is big, has excellent brand recognition, and still occupies a lot of prime commercial real estate. What they seem to be lacking is a refreshed product line, cutthroat pricing, and the brilliant marketing and advertising that is needed to draw in business.
The decline of sears is an interesting subject, but this particular blog post is just blogspam. Better to link to the actual article this blogspam post is inspired by:
This is the heart of it. In 1993 they cancelled their "catalog", which was the amazon.com of it's day. If they had had the foresight they would have put that online. Same interstate tax savings, same larger selection.
I once worked for an online savings / coupon site that had been a catalog ordering company and transitioned the right way (ShopAtHome.com) from a printed catalog business in the early 90's, and had great respect for the founder's insight in doing so.
The interstate tax savings only works if you have no physical presence in a state. Since Sears was everywhere, it wasn't a possibility for them.
Amazon got so much flak for taking advantage of this, they finally decided it was easier to open warehouses everywhere and charge the taxes. But that opened up the possibility of same day delivery.
I know someone who works as a cashier at Sears. She gets $2 for signing up someone for in-house credit, $4 for a real credit card. And she gets yelled at if she doesn't meet her quota (one signup for every $500 in sales).
I think it's an idiotic policy from the point of view of a customer who doesn't want a credit card. Because it slows down the line, all this promotion and paperwork is being done at the cash register.
Funny, just bought a Samsung range there, delivered for free yesterday, best price in town for this unit. A few automated delivery date confirmation calls too many, otherwise great experience. I hope the Koreans have a higher standard then Kitchenaid/whirlpool, I've had 3 bad experiences in a row.
Yeah, it's gotten to the point that Samsung is the only appliance brand I really trust anymore since all the old American brands have copied HP's business model: strip-mining your one competitive advantage - your respected name - into a crater.
Sorry, let me start off with a story:
So my wife and I are looking to replace a Queen size bed with a King size one - we find the one we want at Sears online, cool, place an order.
Checkout, put in info, order done. Get notification email, I had put in one of the other mattresses we had been looking at (like an idiot) - ok, no problem I think, I JUST made the order, I will cancel it and get the one that we had wanted.
I call the customer service line. "We can't cancel it, it's already with the shipping department." Ok, I don't care - tell them it's cancelled, so I can order the right one? "I'm sorry, I can't do that." Alright, let's do the "Connect me to your supervisor" dance!
Get to the "next level" supervisor; this person says, "I can't cancel the order, it's already on the truck."
...You put an order on a truck within 15 minutes of me clicking the button that isn't set to be shipped for two weeks? Is your warehouse made of trucks?
"Ok, take it off the truck." I say, convinced I had just solved the problem.
"I can't do that. You'll have to receive it, and then return the mattress."
"...You mean I'll have to wait two weeks, for you to ship me a mattress I don't want, just so I can return it? That doesn't make any sense."
ON TO THE NEXT LEVEL OF SUPERVISOR!
By now, what should have been a friendly 30 second call that would replace one order with another one, is 45 minutes of me being increasingly confused and pissed off, but it becomes clear after the third person comes on the line.
"Sorry to hear that you want to cancel the order, sir. Could we convince you to take the order, and accept a discount?"
WHAT THE FUCK, FOR THE WRONG MATTRESS? Then it hits me - they were giving me the run around, specifically to keep that 'sale' in their system, at almost any cost to them.
"NO, cancel the order IMMEDIATELY, and I won't sign for it if you make the mistake of shipping it here!"
This finally convinces them to cancel the order. What a waste of an hour! As an upshot, I am so pissed off at this point that I decide not only to not order the right item from Sears, but never to buy anything there ever again, and to inform everyone I had ever met that Sears is terrible and to advise them never to shop there, ever.
So now that Sears has come up, I'm going to do the same thing I promised to do then:
Don't ever shop at Sears, ever - if there is a damn hurricane and it's the only place with sandbags, I still wouldn't trust them.
I know HN is more meta/intellectual and not a personal anecdote kind of place, and I'd keep to that rule, but the fury came over me when I saw Sears, and I couldn't help myself.
This article doesn't address the fact that Sears was once a standard. However they didn't change as the younger generations came on. I don't know as their customers are switching to a competitor as much as they are just dying.
Sure they changed - just not for the better. If they'd simply stayed the same as they were 25 years ago, they wouldn't necessarily be thriving, but they'd be in much better shape than they are today.
Any mention of the fall of Sears under Eddie Lampert should not omit Lampert's vision of running the company under Ayn Rand's Objectivist principles, and how that completely failed:
This in itself doesn't discredit Rand, it just discredits his execution of Rand. A physicist that fails even though he believes in Quantum Theory doesn't mean Quantum Theory is necessarily wrong.
The Salon article is rather biased and doesn't actually analyze the specific failure points as it relates to Rand. Selling Rolexes in Sears isn't Randian -- it's just a bad business decision.
The dude's personality also isn't necessarily Randian either and it would seem that was a major contributor to his failures.
There are plenty of Christian business successes and failures -- and they rarely have anything to do with Christianity.
Did he actually follow Rand? Selling a $4000 Rolex in Sears has nothing to do with Rand.
The Salon article even states "discredited free market.." Is that so? I'm not sure many reputable microeconomists would say the free market is discredited any more than the law of supply and demand is discredited. There are distortions that happen surely, but that doesn't 'discredit' anything.
Has Adam Smith been discredited? We could more easily say that Marxism has been discredited based on the fact that nearly every Marxist economy has failed while plenty of free market economies have succeeded.
This failure has zero to do with Rand and everything to do with the personal failings of this CEO.
We could more easily say that Marxism has been discredited based on the fact that nearly every Marxist economy has failed while plenty of free market economies have succeeded.
We could say it, but in fact, it has been claimed that no Marxist state has ever correctly implemented Marxism. "No true Scotsman" is a handy fallacy.
Non-falsifiability is a feature of every mature ideology.
There has never been a state that even claimed to be unqualified Marxist, all the states that claimed something derived ultimately from Marxism have claimed descent through Leninism, which threw out the fundamental prerequisites for Marxism of a broad movement in an advanced capitalist state in favor of a system that was premised on an elite vanguard operating in a precapitalist state.
Socialist movements influenced by non-Leninist Marxism (though rarely as the sole Socialist influence) have been quite successful in the developed world, though they don't tend to set up one party states even where they are influential, again, because that's something more associated with the authoritarian paternalism of Leninist vanguardism than it does with non-Leninist Marxism.
So, its perhaps fair to say Leninism has been tested and failed; far less so for Marxism.
"Lampert took the myth that humans perform best when acting selfishly as gospel, pitting Sears company managers against each other in a kind of Lord of the Flies death match. This, he believed, would cause them to act rationally and boost performance."
I would be tempted to blame Ayn Rand as well, but in the end the responsibility is of those who apply what she invented, especially when they should know better.
> pitting Sears company managers against each other in a kind of Lord of the Flies death match
From what I've heard, Google had similar battles between senior leaders and they've been wildly successful. While these policies probably didn't help the situation at Sears, I'd be very hesitant to say they were the cause of the decline.
I think Salon was looking at the situation without enough objectivity in an attempt to discredit a philosophy they find distasteful. And I think people like you who are laying the blame on the implementation may also be attributing too much of the outcome to how the company was run. Sometimes a company is just destined to fail by circumstance. It's very hard for an established company to constantly maintain the fresh perspective necessary to get out in front of the game-changing trends and not be reactive. If it weren't, startups disrupting existing businesses would not be so successful. That Sears stayed at the top for 100 years seems more of an anomaly rather than their failure in the past 30 or so.
Sears isn't the only company of its sort to have problems...just look at JC Penny. I'd be more willing to chalk Sears failure up to Walmart, Target, Amazon, Best Buy and the rest of the newer companies that ate their market by using newer technologies, better managing the supply chain and otherwise adapting to the changing world. Sears got big by changing the game and dominating mail order and it adapted well to the retail department store/mall eras. But they weren't able to transition to the internet, aren't able to compete on price with the lower-margin retailers and aren't considered premium enough to go up-market. There's very little they can offer right now that others can't do better and that would likely be the case no matter which principles they'd used to run their business.
Google's advertising revenue-via-search-monopoly gives them a lot of cushion. No matter how poorly (or well) managed they are, problems won't be visible unless the search advertising market starts to dry up, because no one will question their performance. It would be interesting to observe an alternate universe where Google that had to derive revenue solely from hardware sales.
Yes, applying any single philosophy as a replacement for sound perspective on your business fundamentals seems like a bad idea. However, you don't typically see executives preaching communism as a solution. There is something particularly seductive about Randism to a certain class of corporative executive.
> From what I've heard, Google had similar battles between senior leaders and they've been wildly successful.
Those battles are for who can make the best product, a winner is crowned and done. It's not the same as making departments constantly battle each other with no end.
i.e. battle for two similar competing products, not unrelated things.
It's ironic this isn't used more often to judge Objectivism's merits, though it's a bit disingenuous since it's prudent for most businesses to avoid having any polarizing opinions. E.g. Roark Capital, the owner of Cinnabon and Arby's that's named after Rand protagonist Howard Roark, doesn't seem to officially advocate the philosophy. BB&T under John Allison is the only one I can find that's indisputably both successful and guided by Objectivism -- $24B market cap, $188B assets, senior management required to read Ayn Rand, they donate to promote Objectivism in colleges, etc.
I think you're really jumping the gun here. No one said that this single failing business discredits the philosophies behind the running of the business.
As in everything there can be implementation failure (as you have so currectly pointed out).
There's also the other failure case of a mismatch between principles and the existing context. Maybe these principles work just fine in other contexts and other fields, but they're a poor match up to this one and can't be used without a lot of tweaking (e.g. Agile techniques applied to the manufacture of airplanes; it can be done but you can't just say 'we will do standups and sprints and everything will fall into place').
For decades it has been a poster child for mismanagement.
I took my Tv-b-gone to a business school and zapped the TVs that had CNBC and stuff like that and they turned them back on in an hour and the next time I used it they put tape on the IR sensors.
I zapped the TVs at sears and they were still off a year later.
Sears is the only entity that has denied me credit. (Doesn't stop them from asking me to apply.
For years I was a fan of sears auto center because the cashier would sometimes give me 4 tires for the price of one and they were the kind of lovable gearheads that always had the manager's camaro. They went on of business and an mma training center moved in and I don't get it because this is the only state where mma is banned...
He started off in that direction, buying Lands End and making a bid for Restoration Hardware. I recall an interview or press release laying out a vision for Sears as a "store of stores" that showcased iconic American brands - Kenmore, Diehard, Lands End, etc.
Somewhere along the line that dream died, and the cash flow was used mostly just to repurchase shares while letting the stores Languish. A bunch of concepts were tried in a handful of stores, but none promised an attractive ROI so they were dropped. Bruce Berkowitz is another investor that used to get compared to Buffett an awful lot, and tied his fate to the Sears project. He's still buying more shares and saying he sees value there.
I don't really have a point other to say that investing is hard, and identifying talented value investors who will outperform in the future is even harder. Whether this was a dumb idea all along, or a poorly executed good idea is tough to say.