It's funny the timing of this article. I was just talking with my wife about Sears and how it seems they have no future, it's only a matter of time before the Sears retail store as we know it will no longer exist. Then to read a headline about Sears disrupting? Heck ya I'm interested.
The company has launched a Seattle office, and recruited retail tech execs to help it get a handle on the data it has amassed from the 40,000+ daily service queries its Home Services group collects on washing machines, refrigerators, and other appliances. It turns out that the industry average is that about 1 out of every 4 customers don’t get their appliance woes fixed on the first visit.
“Each truck carries about 400 parts, yet those annual service calls require something like 168,000 different parts,” explained Arun Arora, the group’s president. “We’d have to have our 7,000 certified technicians driving semis around to anticipate them.”
"Big data" has so many applications and to see Sears trying to disrupt in a way that doesn't make headlines is impressive. This kind of disruption, even though on the surface looks like a cost-savings initiative, can revolutionize the service of appliances. Why does that matter? Because loyalty is the name of the game. If they make the experience of owning a machine better, even when it is getting old and needs some new life breathed into it, they can increase their base of loyal active customers.
The more customers that are active with a company the more they will make. If Sears can increase the number of loyal customers by offering a superior customer experience of ownership, they can drive more sales in other areas. It is the process of rebuilding trust with a brand. If I knew buying an oven will have a longer shelf-life and the company where I was buying it can make that happen, then it makes where I buy more interesting.
So many times in the retail space it comes down to price. Everyone sells ovens and mostly from the same manufacturers, so there is very little to differentiate. The easiest rode to differentiation is price. The problem is when competing on price, the business can never win. They are not cultivating loyal customers, in fact they are probably selling to the exact wrong customer. If a customer is only going to choose on price, they are by definition not loyal customers. If Sears can differentiate beyond price and experience in the stores, they can grow their loyal database. That's a big win.