Dive Brief:
- Sears Holdings' falling store sales have been a much-discussed topic in the retail world, but the company's e-commerce sales also lag far behind its stronger department store peers, according to data from e-commerce research firm Edison Trends emailed to Retail Dive. A Sears spokesperson did not reply to Retail Dive's request for comment.
- In the past 10 months, Sears' online sales monthly revenue averaged about 17% of Kohl's and Macy's. Kohl's monthly order volume was on the whole 10 times larger than Sears during that period, according to Edison Trends. And while Sears online revenue increased in May thanks to spending on higher-ticket items, customers placed fewer orders on Sears' websites overall. Edison Trends also found that Sears' order volume was down 5% from April and down 25% from January. Kmart's online sales volume was even lower than Sears.
- As its online sales volume slows, other data also shows more shoppers are turning away from Sears altogether. The share of consumers open to shopping at Sears has dropped in half over the past five years, from 28% in 2013 to 14% this June, according to data from YouGov BrandIndex published by Forbes this week. That number is 9% for millennials.
Dive Insight:
The numbers from Edison Trends and YouGov point to Sears' larger existential struggle — bigger, arguably, than the company's profit losses — coping with the long-term deterioration of the company's customer base.
CEO Eddie Lampert told shareholders a little over a year ago, "We don't need more customers. We have all the customers we could possibly want." Even taking that statement at face value, the company's comparable sales and outside data show that Sears has effectively lost more customers since Lampert said it.
In the first quarter, Sears' net revenues fell 31% year over year to $2.89 billion, and comparable sales fell by 11.9%, accounting for about 22% of the decline in top-line sales, with store closures accounting for most of the rest. (The company announced more than 70 planned additional closures for this year, after closing around 400 last year and announcing another 100 in early 2018.)
The retailer has made some efforts to boost sales. Executives maintain that its Shop Your Way loyalty program is a key part of its turnaround. It's also partnered with Amazon to sell Kenmore products, tested new store formats and revived its holiday catalog. In Q1, comps increased in apparel, footwear and jewelry at both Sears and Kmart. But few analysts see a turnaround ahead for the retailer.
Even after cutting jobs and stores, Sears is operating at a loss (to the tune of $217 million in Q1, which represents a $100 million-plus improvement compared to the past year). With a massive debt load, the retailer's financial problems are compounded. Thus Lampert and Sears have been active this year in raising cash. Sears has signed a deal with Citi on the retailer's branded credit card that brought in more than $400 million. It has exchanged debt, auctioned off store properties online, borrowed from its CEO's hedge fund and traded out loans. And it is also contemplating selling off major assets, including the Kenmore brand, to Lampert's fund.
None of that will matter, ultimately, if Sears can't stabilize its sales and hold on to the customers it has left.
