Retail giant Sears facing Kodak moment
I've spent the bulk of my professional life building and guiding brands, and it didn't escape my attention that last week's demise of global retail behemoth Sears has some parallels with Kodak and the infamous Mad Men episode "The Wheel".
Viewers familiar with the show will recall a compelling pitch from advertising executive Don Draper, where he persuasively sells a visionary campaign to prospective client Kodak.
Founded in 1888, Kodak's origins were, of course, in photography.
It became so successful and so ubiquitous that its tagline of a "Kodak moment" became part of every day vernacular.
"This device isn't a spaceship, it's a time machine," explains Draper in his presentation.
"It goes backwards, forwards, and takes us to a place where we ache to go again. It's not called the Wheel, it's the Carousel," he adds.
The real life irony, of course, is that Kodak's senior executives showed a staggering inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, for decades.
This glaring oversight meant Kodak began to really struggle financially in the late 1990s, and in 2012, it filed for bankruptcy.
The same fate has befallen Sears, which is attempting to cut its debts and keep operating, at least through the pending Christmas holidays.
More than a century ago it pioneered the strategy of selling everything, to everyone, but in court last week it listed US$11.3 billion ($17.3b) in liabilities and US$7b in assets.
Starting out as a mail order company, it grew rapidly. So much so Sears, Roebuck and Company (or Sears as it's more commonly known) once had the biggest domestic revenue of any retailer in the United States.
The reality, however, is that Sears gave up its mantle as a retail innovator and industry leader a long, long time ago.
It didn't happen overnight, of course, but even for a brick-and-mortar retailer in the digital era, Sears has struggled due to a series of blunders, financial oversights and mismanagement.
Chairman and former CEO Edward "Eddie" Lampert drove the deal to acquire the discount retailer Kmart out of bankruptcy in what was, at the time, the largest retail merger in history.
But ultimately the business failed to acknowledge the fundamental needs of its customers and displayed a staggering inability to embrace and implement the sorts of technologies they expect.
For New Zealand retail operations, the learning from the Sears saga is crystal clear — the better they know their customers, the more they can improve the experience.
This simple symbiosis holds the key to driving customer loyalty, regardless of the retail environment.
The continued adoption of e-commerce will put margins and foot traffic under even more pressure for traditional retailers, with department stores forced to change their formats in order to remain competitive.
Kiwi retailers that successfully innovate will continue to prosper, especially the ones that integrate technology into their operations in ways that enable them to own "the last mile" of the purchase process.
Despite its bankruptcy, Sears may well continue. But only time will tell whether it will go the way of Kodak, which ceased manufacturing its Carousel range in 2004.
Its beautiful projectors were then left to gather dust, before being immortalised in a critically-acclaimed TV series about a New York advertising agency.
Originally published on nzherald.co.nz