The free-falling Sears Holdings, parent company of Sears and Kmart, made a truly unorthodox decision this holiday season. The retailer, which generates the vast majority of its dwindling sales from in-store foot traffic, didn’t run any television advertisements for most of the crucial holiday shopping season.
According to the Wall Street Journal, no paid Sears commercials have run nationally since November 25th. No national Kmart commercials have run since November 24th.
The decision, according to the Journal, came from Sears Holdings chief Edward Lampert, over the objections of other executives. Lampert has championed a shift to digital marketing, even as Sears’ overall advertising spending has declined along with the company. In a statement to the Journal, Sears said the shift came after evaluating the effectiveness of its various marketing efforts.
Even in the digital age, abandoning TV entirely would be a highly unusual move for any large consumer business. While TV advertising expenditures have declined across the economy, they still makes up more than 1/3rd of all ad spending. Studies have also found that ads on television are still substantially more effective than those in other media.
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The decision is particularly strange in the case of Sears, whose customers tend to be older. Americans over 44 watch vastly more traditional television than younger people, with those over 65 watching nearly three times as much television as those 18-24, according to eMarketer.
Sears, a venerable U.S. institution that was once as innovative as Amazon, has been in disastrous decline for years now. For a time, that decline could be seen as a product of the shift from brick-and-mortar to online shopping.
But Sears has lagged even other legacy department stores in reacting to that transition. While department stores as a category now generate 15% to 25% of their sales online, eMarketer says that ecommerce generates just 9.3% of Sears’ revenue. Focusing on digital ads might be seen as an effort to move that needle. But it could also be seen as throwing marketing budget at a service that customers just don’t like, while ignoring what still (maybe, just barely) works.
Meanwhile, retailers from Home Depot to Target to Urban Outfitters have recently beaten analyst expectations, and rising foot traffic at outlets including WalMart is driving talk of a retail resurgence.
Sears, it seems, no longer has anyone but itself, and its leaderships’ decisions, to blame for its problems.
