Sears Leadership Still Convinced That Rewards Program Will Save The Company

Shop Your Way Rewards is not a difficult program to join. The process consists of giving your e-mail address to a cashier at Sears or Kmart, and…that’s pretty much it. It doesn’t cost anything. Yet the leadership of Sears Holdings Corporation remains fixed on the program and the idea of having “members” rather than customers, and we still can’t figure out why.

The company announced its first-quarter results today. While we don’t normally share the details of every quarterly earnings report, we do read them over for nuggets of information that may be of interest to consumers. Sears is now going through what’s either a transformation or a slow-motion demise, and the company’s sales in “comparable stores” fell 7% for Kmart and 14% for Sears.

A few years ago, inside sources told Bloomberg Businessweek that the manifesto-writing CEO of Sears Holdings, Eddie Lampert, dislikes retail jargon and tries to avoid it whenever possible. That may be why Sears Holdings always refers to “members” rather than customers in official communications, and why the company points out in the earnings report that 75% of sales are to people who have signed up for the Shop Your Way program as if this is some kind of coup.

It’s not: even having detailed purchase data on each customer tied to their e-mail address isn’t much of an accomplishment for a company that came to national prominence as a catalog. Is Shop Your Way a good program? Sure, you can cash in tiny amounts of points on your next purchase, and leverage promotions to earn piles of extra points, but that doesn’t seem to be enough to draw more customers in to buy their appliances from Sears yet.

Yet company communications mention the rewards program as if it’s revolutionary. In Lampert’s prepared quote in the earnings statement, he says:

During the first quarter, we made significant progress in our transformation from a traditional, store-network based retail business model to a more asset-light, member-centric integrated retailer leveraging our Shop Your Way platform.

What does that mean? It means that they’re selling off their store real estate to an affiliated real estate investment trust, and that the company sees its massive database of customer contact information and shopping habits as some kind of salvation.

Sears Holdings Reports First Quarter 2015 Results [Sears Holdings]