SPEED DOES NOT WIN RETAIL RACE

Implications: This article outlines the latest strategy employed by Sears and Mr. Lampert to improve their declining sales during the holiday season. The strategy involves extensive advertising about how any merchandise ordered on line will be available within 15 minutes after ordering at any nearby Sears store.

The article also points out that thus far the advertising program has not worked as sales continued to accellerate their decline from 2.5% down in the second quarter to 4.8% down in the third quarter.

It seems that Mr. Lampert's program of cost cutting and elimination of investing in store remodling is having its' predicted negative results even sooner than most analyst expected.

Analysis: While I agree with most of the observations mentioned in this article, in my opinion it skims over the more basic problems Mr. Lampert faces in his slight-of-hand efforts to make Sears appear to be an important retail destination. The real problem that the article only touched upon is the chain's customer service problems.

Survey after survey shows that Sears is rapidly losing their customer's confidence and loyalty due in large part to declining customer service resulting directly and indirectly from Mr. Lampert's cost cutting edicts. This type of problem simply cannot be solved by a sudden increase in gimmicky advertising.

In my opinion the advertising program is unusually misguided, even for Sears.  For one thing it does nothing to improve the customer count in the store!  It almost seems to confirm their cost cutting strategy by attempting to sell more goods using their lower cost warehouse employees and on line services.

For another, it does nothing to address the most important threat to Sears continued survival in the form of a completely revived and rapidly advancing J.C.Penney Co. as well as the steadily gaining Kohl's and Target competition.

In this instance Mr. Lampert must realize that advertising speed is just plain dumb. He should pay attention to the old highway safety slogan "speed kills".