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With the recent news of Sears Holdings filing for Chapter 11 bankruptcy, Mintel Analysts, Alexis DeSalva and Diana Kelter, make sense of Sears’ missed opportunities and failure to evolve.

Alexis DeSalva, Senior Retail and eCommerce Analyst, US

Consumers have endless options when it comes to shopping for everything from groceries to clothing. In this increasingly competitive landscape, retailers not only need to evolve to match how consumers shop, but they need to find innovative ways to make the experience seamless and to provide reasons to shop their stores over competitors. Sears’ decision to file for bankruptcy after a long period of softening sales is likely attributed to those reasons: failure to evolve to consumer behaviors and failure to distinguish themselves from other exciting or convenient retailers.

E-commerce has forever changed consumer shopping behavior, including their expectations and preferences both online and offline. Consumers have become savvier, often researching before deciding what and where to buy. As a result, loyalty to specific brands or retailers has become diluted. This behavior impacts in-store, online and cross-channel shopping as consumers increasingly look for seamless experiences.

Heritage brands and retailers can no longer rely on their legacy and Sears delayed their response in acknowledging this shift. Shoppers want flexibility and innovation that allows them to shop conveniently. In fact, one-third of consumers cited real-time inventory updates as an improvement they desired from department stores, according to Mintel research on department store retailing. In order to succeed, retailers need to find ways to connect with their shoppers beyond the transaction and give them a reason to shop their stores. Sears not only failed to evolve the seamless shopping experience quickly enough, but they failed to connect with shoppers – especially younger generations – in a way that felt authentic and different.

Consumers know how to get the deals they want and while deal-seeking mentality dominates, where they decide to shop will likely be driven by other factors, such as convenience and experience. Unfortunately, Sears’ hesitation (or inability) to realize this made them rely heavily on discounts and deals, which is no longer enough to convert shoppers or stand out as a competitor.

Diana Kelter, Senior Trends Analyst

Outside of the competitive retail space, there are also larger trends at play forcing brands across industries to innovate with the modern era of shopping. Mintel Trend, ‘Experience is All’ brings a focus to how consumers are prioritizing experiences in their everyday life, beyond a grand vacation or while dining out. It’s easy to associate ‘experience’ with Millennials, which is certainly valid, but experience is more than a Millennial fad. Target, for example, has made a subtle experience part of the brand DNA. Moms commonly tweet and reference Target as being a sanctuary to have alone time. Target builds off of that inherent brand connection with exclusive product releases, such as a Chrissy Teigen cookware line or a Chip and Joanna Gaines household collection. Sears aimed to focus its experience on the tradition and nostalgia it’s known for but failed to modernize the experience in a meaningful way.

On the other side of the spectrum, a core part of Sears’ brand image is appliances, which target a core lifestage of home ownership. According to Mintel research on home financing, six in ten US consumers own a home. However, when focusing on a core age group of 25-34, one-half own a home compared to four in ten renting. Mintel’s 2019 Global Consumer Trend, ‘Redefining Adulthood’ acknowledges the path of traditional life stages, such as home ownership, is no longer clear cut. In order to maintain relevance, Sears should have built upon its brand connection to appliances by also featuring products that cater to renters. IKEA has successfully showcased flexibility in its household products as a way of demonstrating value for various lifestages.

Sears’ focus on nostalgia isn’t always a bad move for a brand and that’s clear with the FAO Schwartz toy store making a NYC comeback in Rockefeller Center. However, in order for a nostalgic image to work, it’s critical that it connects with emotion and it’s the emotional piece for Sears that unfortunately failed to take hold.