VANCOUVER – The impending exit of Sears Canada represents an once-in-a-lifetime opportunity for independent furniture, mattress and appliance retailers to not only grow their top and bottom lines, but win a new crop of loyal customers in the process. That’s the message members of Mega Group were brought by Dan Weare, a retired group executive who spent a large portion of his career working for troubled department store chain.
In fact, he believes they may be better positioned to reap the windfall than their competitors among the national chains. There is a catch, however. “You have to know who the customer is and what her expectations are,” Weare told group members at their recent annual convention here.
Until early this past summer, Weare was a senior furniture merchandising manager for the Saskatoon-based Mega Group where he worked most closely with the members of its Evolution Group, which is made up of mostly larger independents who aren’t members of its BrandSource banner. However, he spent much of his career at Sears where he helped developed the Sears Home initiative. He was also involved in the acquisition of what was then Cantrex Group – now Cantrex Nationwide – and was a senior member of its furniture merchandising group for several years.
In an interview with Home Goods Online, Weare admitted he was sorry to see the department store chain disappear, echoing many of the sentiments made by other current and former Sears Canada employees. He also has his own take on what went wrong. “It was caused by not paying attention to the customer and learnings what she wanted,” he said.
Most people in the industry know Sears Canada has remained a significant power in big ticket home despite its troubles in recent years. Indeed, the company is one of the largest furniture, mattress and major appliance merchants in the country. Last year alone, sales in these categories were valued at over $1 billion. That business will eventually find its way to other retailers, but experts don’t think it will happen overnight. The transition could take two or three years.
Weare points out Sears Canada had a target customer: a woman between the ages of 45 and 64 who owned her home and was part of a two income family earning between $100,000 and $120,000 annually. She is a regional newspaper reader, a fan of Top 40 music and listens to talk radio – in fact; she consumes more radio than any other media.
What’s more, this customer respects brands – even private labels if presented properly.
For the independent furniture, mattress and major appliance retailer appealing to this customer shouldn’t be difficult, but Weare maintains some things must be done differently. “There has to be a logical trade-up structure on the floor,” he says, adding it has to be more detailed than the ‘good, better, best’ scenario used by most independent stores. “There have to be a least five steps on that ladder.”
She expects a logical assortment plan in every category and it every department of the store. She is also expecting competitive pricing and to be offered an extended warranty or maintenance agreement with her purchase.
Furthermore, the independent has to be keenly aware of the trends and know how to mix them. “And you have to be very careful you are not buying just what you like for the floor,” Weare advises. Furthermore, retailers mustn’t leave gaps in their assortments.
He also notes the traditional Sears customer isn’t afraid to use credit, noting there was a time when the Sears card represented between 60% and 70% of sales and was the single largest contributor to its annual earnings. In fact, she expects credit as part of the retailer’s total service plan.
Follow-up is also expected by the traditional Sears customer. To keep her loyal, the independent has to do the same, Weare says.
According to a recent report, some 5,000 new dollar stores are expected to open throughout North America over the coming three years. For Weare this is a signal that brick and mortar retail is still alive and kicking. “There are shoppers everywhere,” he says. “You just have to be adaptable.”