Sears: Retail Social Networking Pioneers

Sears (SHLD) is doing some very interesting things online that while in their infancy, have the potential to turn them into a "social shopping hub".

From Bnet:

Sears Holding announcements about the advance of its web-based marketing strategy have followed fast and furious of late and now the company has announced that it will become the first major retailer to launch the Open ID platform – one that permits users to establish a single screen name for identification across web sites — for the MySears and MyKmart communities it has been building online.

According to Sears Holding spokesman Tom Aiello, launching the OpenID platform is the first part of a two-phase initiative to establish MySears and MyKmart as adjuncts to popular social networks. He said:

It’s part of a bigger, long-term vision. Phase one basically enables our individual participants to use their IDs to get into the Sears communities. Phase two will enable sharing in either direction based on user permissions. That’s going to include things like photos, content and product reviews they might have done on MySears and want to share with friends.

The move will connect users of Sears communities directly to social media portals Facebook, Twitter, Yahoo! and MySpace. Sears communities already get a million monthly visitors, the company stated, and the social media connections can only pump that number up.

While a launch date has not yet been set, the second phase will roll out this year, Aiello said, which should put it in effect for the critical holiday season and provide the virtual ground for any number of cyber promotions.

“The beauty of OpenID is that all of those prominent portals people have known and grown to trust make it easier for users to get into one of the Sears communities,” Aiello said.

In announcing the OpenID adoption, Rob Harles, Sears vice president of community, said the technology “helps simplify our customers’ online experience and ultimately helps us meet our goal of ensuring our customers have the most efficient shopping experience possible.”

Sears seems to be the fist significant retailer who has developed a strategy around a social networking site that is designed to drive sales. To date, neither Wal-Mart (WMT), Target (TGT), JC Penny (JCP) or any of the other large retailers seem to be making much of an effort.

Again from the article:

Yet, online is only one element of an evolving Sears multi-channel selling strategy. The company also has been linking its web and store operations through programs such as Shop Your Way, which puts web kiosks in stores, and Sears2go, which facilitates purchasing over mobile phones. Aiello previously told Bnet that a range of Sears cyber experiments had been coalescing into a more clearly defined marketing strategy over the past year and those would support the multi-channel selling proposition.

The OpenID announcement makes it more apparent that Sears plans to develop a social network hub that will link store, Internet and mobile initiatives with the goal of connecting customers more intimately with the retailer, in a virtual kind of way.

In the past

I have complained here

that Sears' disparate retail sites were not a cohesive unit online and I felt that was hurting their efficiency. The recent

changes at Sears.com

fixed many of those issues and now these new initiatives are aimed at driving people to the site and better promoting the products.

This is really worth watching because it is unlike what any other retailer is doing now. At the annual meeting Lampert stressed his desire to

expand the online business

and this proves he is indeed investing in that arena.

Since Sears does not give monthly updates, other than quarterly results, the results of these initiatives will have to be gleaned from what information is released or third party sources. With that being said, with the abnormally quiet Lampert vocally supporting it and the rate at which progress is being made, one would probably be safe assuming Lampert is pleased with the return he is getting on the investment to date.

On another note. Sears still has not named a new CEO and the search is taking some time. What will be very interesting to see is if the new CEO is more of a typical brick and mortar retailer OR if his / her background is more web-based.

Disclosure: Long SHLD

Comments

[Old Trader:]

Do you feel this effort will translate into generating sales, or is this another case of rearranging the deck chairs on the Titanic?

Jul 04 06:59 PM

[Ted Hurlbut:]

I'm not clear on what the organizing idea would be behind a Sears or Kmart "community". Sears appears to primarily be a grouping of disparate brands with different customer bases, and it's hard to know what Kmart stands for. Building this technological capability is all well and good, but are they building it around an empty shell?

Jul 06 09:19 AM

[billhealth:]

I think you guys are missing the bigger picture. Tapping into Social Media helps credibility for retailers with a huge, expanding demographic that exists there, and is expanding it's demographic profile every week.

Referral marketing is the wave of the future, where viral recommendations that are compensated by the companies enable them to move product and develop a loyal, referring customer base.

Many large corporations are paying for referrals now, that will be taken a step further and advertising dollars will be allocated to residual compensation for customer or "club" members - it is briliant compensation developing loyal, referring customers...a very sought after commodity by ANY company.

Here is one example, led by SVP of Paramount Pictures and is partnering with Facebook CEO Mark Zuckerberg to accomplish this:

efusjonHealthyEnergy.com

efusjonHealthyEnergyCl...

Jul 07 01:21 AM

[alienation:]

I've spent a lot of money with Sears, largely due to Sears.com. (Not a *lot*, but a couple thousand dollars. It's a lot to me.) This is money that didn't go to Amazon.com, Home Depot, Lowes, Best Buy, or the local stores (though Sears is local to me).

I'm not sure why, because, in the past, I never really thought of Sears as a place to get things. Prices were kind of high, service was not good, stuff wasn't in stock. Over the past three years, or so, things have improved. I've also gotten older, and maybe my priorities are aligning with Sears.

Sears.com is good. They have some reviews on most of their big items. You have to read between the lines of course. The site accepts customer feedback, and sometimes, it seems to go to the right people. It's not as good as Amazon, but it's better than the other appliance stores. Also, they have parts, and they guarantee to stock them for a while, which is a big plus for me. I also like that they keep selling the same thing year in and out, for some simple things.

The site has a nice "in stock" feature that checks the local store's inventory. It's useful, because you improve your odds of getting what you need when you get there.

I also started shopping at Kmart again a few years back. It used to be a mess, but it's gotten better. I get my fake Dockers there for very little money. I'm a simple guy.

I guess Sears and Kmart are good for people like me, who don't like to shop. They're relatively efficient and safe. I'm sure I could do better, but I just don't care enough to seek out a better pair of fake Dockers or the ultimate mattress.

Jul 08 03:22 AM