Sears CEO Calvin McDonald has launched a campaign to shake up the retailer's marketing.Bruce Clark/Sears
The new boss at Sears Canada Inc. , an expatriate of Loblaw Cos. Ltd., wants some of the grocery giant's marketing savvy to rub off on the troubled department-store retailer.
Calvin McDonald will launch next week his own version of Loblaw's well-known Insider's Report, borrowing a page from the chatty promotional publication that trumpets supermarket products, in the form of Sears' first fashion-focused Look! Report.
Sears also is quietly hunting for a new advertising agency, although the incumbent, BBDO, is believed to be among a select group of agencies that are contenders for the account.
Mr. McDonald's race to reshape Sears' marketing is a signal that he's serious about trying to turn around its fortunes as it grapples with poor financial results and a waning reputation as a shopping destination.
In the rush to lure shoppers back to his stores, he feels the pressure of implementing his three-year transformation plan before growing competition – and the arrival of U.S. discount giant Target Corp. next year – catches up.
"He doesn't have much time, that's the reality," said Tony Chapman, founder of marketing agency Capital C. "He has inherited a brand that's rudderless …When I think of Canadian Tire, I think of man cave. When I think of Shoppers Drug Mart, I think of health. When I think of Holt Renfrew, I think of luxury fashion … Sears, I don't think about."
Mr. McDonald, a respected executive at Loblaw who came to Sears as chief executive officer last June, is aware of his challenges. In an internal memo soon after he arrived, he spelled out Sears' shortcomings, including cluttered stores and ineffective marketing and promotions.
At the same time, archrival the Bay, under CEO Bonnie Brooks, is showing new signs of life. The privately held Bay's same-store sales rose about 6 per cent last year, according to its figures, while those crucial sales at outlets open a year or more dropped 7.5 per cent at Sears.
Mr. McDonald has moved quickly to slash costs, trim staff, lower prices and, last week, announce his intention to close three Sears stores in top locations by the end of October. He's trying to bolster Sears' marketing by slimming its flyers and focusing more on key products and deals, while shifting some ad spending to radio commercials. In the coming months, he will roll out new store prototypes to provide more space for his "hero" categories – its traditional hard-goods strengths of appliances, mattresses and furniture.
And now, he's putting a spotlight on Sears fashions. For the past few years, the company has been building its private-label apparel, particularly the younger-looking Attitude, even showing the line in the Toronto fashion shows. Next Wednesday, Mr. McDonald is to unveil Sears' new Look! Report, following in the steps of other fashion retailers, including Loblaw's Joe Fresh Style and Holt Renfrew, which produce "look books" to tout their latest styles.
Sears spokesman Vincent Power said future versions of the Look! Report will also include home products. It's an attempt by the retailers' "trend managers" to communicate directly to customers their take on the latest trends they find on their overseas trips, including "looks for less" tips.
Mr. Chapman said Sears should stick to its sweet spot of pitching affordable, accessible clothing and household items. And it needs to tap into a full array of marketing devices, including public relations, social media, bloggers and catchy in-store and window displays. "A classic ad agency is not going to save him."
Radio ads, which have worked well for Ms. Brooks at the Bay, are an effective way to grab a "captive" audience and drive them into the stores, Mr. Chapman said.
Mark Satov, a retail specialist at Satov Consultants, said Mr. McDonald has sparked the process of change by motivating staff to try new initiatives. However, while the Bay's Ms. Brooks is blitzing a message of change, Sears has failed to invest in bolstering its brand. "They need to say to the world: 'Come, to us again, it's better than it used to be.'"
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