Column Editor: Corey Seeman (Director, Kresge Library Services, Stephen M. Ross School of Business, University of Michigan; Phone: 734-764-9969) Twitter @cseeman
As I am writing this column, I am noticing that my house is mostly free from holiday decorations. It is not that I am a curmudgeon, but that given today is the first of the year, it is time to clean up the house and get it ready for the New Year. Put away are the Christmas decorations and the tree. If we can get this done by the first of the year, we consider ourselves ahead of the game.
Another important economic event that takes place in the States is the assessment of how the holiday season was for businesses, especially retail. The early indications is that it was a good year. From an article on the Christmas day issue of the Wall Street Journal, “Total U.S. retail sales, excluding automobiles, rose 5.1% between Nov. 1 and Dec. 24 from a year earlier, according to Mastercard SpendingPulse, which tracks both online and in-store spending with all forms of payment.”1 But on the bad side, we have this: “Still, next year presents a challenging environment as buying continues to shift online — a trend that is hurting many retailers, including department stores. Sales at department stores fell 1.3% in the period tracked by Mastercard, in part due to store closings. Stores that mainly sell apparel, however, experienced robust sales, growing 7.9% during the same period. Overall, sales from bricks-and-mortar stores rose 3.3%.” Department stores seem to be out of place in today’s economy. And maybe nowhere is that more pronounced than in one of the flagship department stores in the States, Sears.
Writing on the Wall
The expression used as a title for this column, “Writing on the Wall” comes from the Book of Daniel in the Old Testament of the Holy Bible. In chapter 5, the story is told of Belshazzar’s feast, featuring drinks that were served in vessels looted from the destruction of the 1st Temple. During the feast, a hand appears and writes on the wall, but they are unable to decipher the meaning. Daniel is summoned and has the unenviable task to tell Belshazzar that God has numbered his days and that his death is imminent and that the kingdom will go to other tribes.2
While there is a great deal of religious significance here, the fundamental meaning is one of doom or misfortune. If you cannot read the writing on the walls, they you are oblivious to situation that you are in and there might be little that you can do. That is not a position that anyone should be in — but alas, it happens.
When I was a library school student, I first learned about Sears List of Subject Headings. I remember thinking they were incredible and delivered just about everything. However, the Sears List of Subject Headings were published initially by Minnie Earl Sears in 1923, not by the namesake store. While a leader in librarianship, she was no relations to the famous retail operation.
Insofar as the familiar store, well that was a name that I knew very well. When you needed tools, you bought Craftsman. When you needed appliances, you bought Kenmore. When you needed a car battery, you bought a DieHard. But more importantly, they were a fixture in the minds of millions of consumers in the United States and beyond. They did this through their huge network of department stores and a catalog that had everything that could fit in your house. For that matter, it also had the house that you could buy. The grandeur that was Sears was capped in 1974 with the completion of the 110 story Sears Tower, at the time, the largest building in the world.3 Now it is called the Willis Tower and there is virtually no reference there to the famous retailer and its rise, and impending fall.
Sears, in many ways, was taking the path that Amazon is taking now. There was little that they did not sell. They made lavish guarantees that made their brand even more valuable. The notion that you would never need to buy another screwdriver when you bought a Craftsman is a powerful message. And in the early 1980s, the company diversified in ways that was very much ahead of their time (if such a thing is really possible). In 1981, they purchased Coldwell Banker (one of the leading real estate firms) and Dean Witter Reynolds (the large securities firm). In 1984, they launched Prodigy with IBM and CBS as one of the early ways that people could connect to the growing Internet. In 1985, they introduced the Discover Card which for the first time, offered users cash back on their purchases. In many ways, they were better suited to face the challenges of their time than just about anyone else.
But the 1990’s and the 2000’s were not kind to Sears. People started shopping more at places like WalMart, Target and Mejier, where you can get your hard goods and groceries also. In 2004 and 2005, Sears was purchased by Kmart, a retail chain that was emerging from bankruptcy, and would operate both stores under the name Sears Holdings. In 2006, they would operate over 3,800 stores. As of this year, that number would have shrunk to just over 1,000. It will be reduced further when our Ann Arbor Sears closes in a few days.
While the store closures have been steadily introduced to keep the brand name afloat, the overall health of the company was waning. From 2014 to the present, Sears Holdings saw revenue decreases each year in the double digit percents. Some of that was driven by store closures, but much was driven by an entity that was not finding its customer. On October 15, 2018, Sears Holdings filed Chapter 11 Bankruptcy protection and is still trying to work through what a post-bankruptcy might look like for this 130+ year old American giant. They have closed many stores and are planning to close more in the new year. They seem to be heading in the same direction that Toys R Us headed.
If you have been in a Sears store over the past few years, this all might not come as a surprise to anyone. They were rarely crowded and you sometimes wondered how long they had left. My wife and I loved to go to the Land’s End store at Sears, but even that was not as busy as it might have been. And while retails has been very difficult over the past few years, especially for department stores, there was a “writing on the wall” moment for me and Sears that happened last year.
I am not sure when I started a Sears.com account, but likely a few years ago. I would not use them for online shopping, but as you bought stuff in the store, you would earn “Shop Your Way Points.” Just a simple means of providing some loyalty rewards to your regular customers. When you buy an appliance there, you can earn a bunch of these that can be used for just about anything. For what it’s worth, I am a sucker for any loyalty program, but that is another problem.
In November 2017, I noticed something different in my regular emails from Sears offering me FREECASH deals. Sears was offering points, but not making me buy anything. Now I am very used to getting coupons in my inbox, but these were different. Right now from Staples, I have a $30 off $60 and a $10 off $50. Technically, that is free cash. But these were different.
What came from Sears was an offer for FREECASH with a twist. For the Christmas season and beyond, I would get an email telling me I had $18 or $22 or $15 in FREECASH — but on any purchase. Since you could order online and pickup in the store, and I practically pass it every day on the way home, I thought why not. I would order just over the amount offered. I replaced socks, jeans, tools, kitchen accessories, shirts, sweatshirts, etc. They would offer me $22 and I would spend $22 or $23. Then I realized that I could actually spend less than that amount. I would pick up items on the way home and not spend a dime. The stuff I was able to get was all useful, so I am happy about that. But they were paying me to shop with their money. They were so needy for people to shop there that they were not only waving a carrot in front of me, but the whole meal.
My last transaction like this was March 31st — a nice 5-pack of dress socks covered completely by my FREECASH points. After that, they started saying that you needed a minimum purchase, and it was not surprisingly less enticing for me. This went on for around 6 months. It was a good idea to get people shopping, but it did not have the desired impact. But my thought at the time was that the only way I am shopping this much at Sears is because they are essentially giving it away. For me, the “writing was on the wall” for the future of this American icon and I thought it was just a matter of time before they threw in the towel.
Once again, if you have made it this far, you might be thinking what on earth does this have to do with libraries. Sears is an icon of American commerce and retail. Getting something from the Sears Catalog was akin to Amazon long before Jeff Bezos was born. And yet it seems more and more likely that the 2018 holiday season might be its last. If they are lucky, it might be their penultimate season. And that brings us to libraries. I have thought of Sears as something that would always be around. But they are getting ready to join Pan Am Airlines, Arthur Andersen, Lehman Brothers and many other huge companies in the annals of history. These companies seemed like they would run forever. In 1999, just 20 years ago, Sears was the 21st largest company in the United States as ranked by Fortune. Now, they are 172 and falling quickly.4
The lessons for libraries from the coming demise of Sears is mostly one of adaptability and relevance. Sears did a great deal right over their history. Companies cannot survive that long without doing great things. But during the last few years, especially after the merger with Kmart and their own financial problems, they appeared to be a 20th century shopping experience in a 21st century economy. They might not have been as nimble, thinking that their brand name and market leadership in some key areas would be enough to keep them going. And while their brand was strong, it simply does not translate to attract modern customers. The appearance that something is old and somewhat out of touch might be the issue that many libraries face. As we look at our own libraries, are we really positioned to last another 100 years? Another 50 years? Most academic libraries have been in existence since the founding of their schools, but may often have a same vibe as Sears. We are losing space, we are losing collection dollars, and we are losing staff. In many ways, we are like Sears in a slow descent to a new future. Can we rely on the way people used to use the library as a way for us to move forward? Absolutely, but it may not guarantee our longevity.
I do not believe for a moment that academic and public libraries will be going bankrupt anytime soon, but we are on a path that is not sustainable. What will be critical is that library leaders understand change management and learn lessons from public institutions, higher education, and some businesses to ensure that we survive the pressures that we know about and the ones that we have yet to face.
To this end, I am going to focus my writing this year on change management. We have gone through a very disruptive change in 2014 when the decision to no longer provide us with space for a print collection. There are disruptions like this that we face year in, year out. It is how we manage through this change that makes it possible for us to be successful with our community. In the end, I hope we are more successful than Sears in navigating through modern times. The early indications are positive, but as we know, this can change in a moment.
Corey Seeman is the Director, Kresge Library Services at the Ross School of Business at the University of Michigan, Ann Arbor. He is also the new editor for this column that intends to provide an eclectic exploration of business and management topics relative to the intersection of publishing, librarianship and the information industry. No business degree required! He may be reached at <email@example.com> or via twitter at @cseeman.
- Nassauer, S. (2018, Dec 25). U.S. Holiday Retail Sales Are Strongest in Years, Early Data Show; Sales Excluding Autos Rose 5.1% between Nov. 1 and Dec. 24 From A Year Earlier, According to Mastercard. Wall Street Journal (Online)
- See https://www.jewishvirtuallibrary.org/daniel-chapter-5.
- “Sears Holding Corporation.” International Directory of Company Histories. Ed. Karen Hill. Vol. 119. Detroit, MI: St. James Press, 2011. Business Insights: Global. Web. 29 Dec. 2018.
- See http://fortune.com/fortune500/sears-holdings/.
Leah was appointed Executive Director of the Charleston Conference in 2017, and has served in various roles with the Charleston Information Group, LLC, since 2004. Prior to working for the conference, she was Assistant Director of Graduate Admissions for the College of Charleston for four years. She lives in a small town near Columbia, SC, with her husband and two kids where they raise a menagerie of farm animals.