Kodak, Blockbuster, RadioShack. Think back to the last time you purchased a product from one of these companies. If you see yourself with crazy hair, denim shorts, and a turtle neck sweater, it’s because you haven’t visited these companies since the 90’s.
In an effort to revitalize sales, Sears Holdings Corporation (NASDAQ:SHLD) launched its online marketplace in 2010. Here customers can by goods from Sears or third-party retailers. The store has grown 20% year-over-year and today is the third largest online retailer by visits. The company touted its growth at its annual meeting, but I’m not buying in. Here are two numbers that will haunt this retailer’s future.
18 million
The number of unique visitors that visited the Sears Holdings Corporation (NASDAQ:SHLD) online marketplace last month.
That number sounds pretty good standing alone, but let’s compare it to two other online vendors: Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY). According to comScore, those two retailers attracted 98 and 69 million unique visitors over the same time period. While Sears Holdings Corporation (NASDAQ:SHLD) isn’t beating the competition in unique visitors, maybe it can beat them in price.
The Wall Street Journal asked the same question, and used a head-to-head comparison of Sears Holdings Corporation (NASDAQ:SHLD) and Amazon.com, Inc. (NASDAQ:AMZN) to determine who offered the lowest prices. They searched for the GS10 Conair Deluxe Model Fabric Steamer and found it selling for $138.66 on Sears’ website, and $74.95 on Amazon’s marketplace. I found the same product on eBay Inc (NASDAQ:EBAY) listed as “new” from $60 to $115 under the “Buy it Now” section.
Obviously one product isn’t representative of the entire marketplace, but I think it effectively illustrates consumer perceptions of these companies. Amazon.com, Inc. (NASDAQ:AMZN) has notoriously low margins in order to have the lowest prices. eBay Inc (NASDAQ:EBAY) auctions allow consumer supply and demand to set prices. What does Sears have? Right now, they have 18 million unique visitors. That’s it. Until they differentiate themselves, they won’t be taking a larger slice of the E-commerce pie.
97%
The percentage of sales generated from Sears’ brick and mortar stores. Growth has come from Sears’ online store, but it needs tangible growth if the company wants to rebound. In a continuation of its downward trend, sales at its physical stores fell 2.4% last quarter.
At Sears’ annual meeting in May, CEO Edward Lampert said “We believe we can win through service, but service powered through technology.” In order to achieve that goal, the company unveiled a new application called Member Assist. The app allows users to text in-store employees to ask for assistance. The employees can respond in real time via their company issued iPads, and either direct the customer to the product, or if the store doesn’t have the item, give them a link to purchase it in Sears’ online store.
Sears needs something to revitalize its brick and mortar units. The company’s technology is innovative, but it’s also untested. This move could rejuvenate sales, but I would wait until the company reports better numbers before buying.
