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110 Part One Organizations, Management, and the Networked Enterprise

shoppers. For example, work wear has been moved closer to where tools are
sold. After data analysis showed that many jewelry customers were men who
bought tools, the company created a special Valentine’s Day offer for Shop
Your Way Rewards members that offered $100 credit for $400 spent on jewelry.
According to D’Ambrosio, what people are spending using their loyalty points
“has exceeded our expectations.”
Sears spent several hundred million dollars improving its stores in 2011,
including technological enhancements. Woodfield Mall Sears, one of several
hundred that was recently remodeled, reflects the new approach. Outdoor
clothing from Lands, End dominates the area near the main mall entrance,
while pastel-colored women’s tops from Covington line the main hall. (Sears
owns both of these brands.) Workers use iPads and iPod Touches to access online
reviews for customers and check whether items are in stock. Ron Boire, who
oversees Sears merchandising and store formats believes that with a little more
time and customer information, he can make the store experience much better.
But retail industry experts are skeptical. The Sears Shop Your Way Rewards
program is not very different from what Target, Macy’s, and other retail chains
already offer, and these programs alone cannot turn a company around. Jim
Sullivan, a partner at loyalty marketing firm Colloquy, observes that a good
loyalty program can be a strategic advantage if the program gives a company
better intelligence about what its customers really want. But “even the best
loyalty programs can’t fix a fundamentally broken brand.”
Sources: Miguel Bustillo, “The Plan to Rescue Sears,” The Wall Street Journal, March 12, 2012;
Miguel Bustillo and Dana Mattioli, “In Retreat, Sears Set to Unload Stores,” The Wall Street
Journal, February 24, 2012, and Stephanie Clifford, “A Tough Sell at Sears,” The New York Times,
December 21, 2010.

he story of Sears illustrates some of the ways that information systems help
Tbusinesses compete, and it reveals the challenges of sustaining a competitive
advantage. Retailing today is extremely crowded, with many large and powerful
players and competition from the Internet as well as other physical stores. At one
time, Sears was the top retailer in the United States, but the company is struggling
with all of these competitive pressures and is searching for a competitive strategy
to regain its footing.
The chapter-opening diagram calls attention to important points raised by this
case and this chapter. By all accounts, Sears is a fading brand saddled with too
many nonperforming physical stores in undesirable locations. Over the years, it
has tried many different competitive strategies-mergers, promotional campaigns,
and store renovations, and various technology initiatives. None have been able
to stem the tide of red ink. Sears's most recent initiative uses a blend of technol-
ogy and loyalty-rewards programs in the hope that more aggressive mining of
customer data will enable stores to offer the stock customers want and deliver
buying superior experiences. The case study shows how clearly difficult this will
be to achieve. Both regaining competitive momentum and sustaining a competi-
tive advantage may not be possible for Sears, given its history of missteps and its
damaged brand image. Technology alone won’t be able to solve Sears's problems
until it repairs its tarnished brand image and creates a more robust business model.
Here are some questions to think about: 1. How do the competitive forces
and value chain models apply to Sears? 2. Visit a nearby Sears store and observe
sales activity. Do you think Sears’s new strategy has been implemented there?
How effective is it?

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