The Sears Grand Concept

Firstly, SHC would seek to build upon and ultimately expand on the Sears business practice of off-mall stores carrying consumable goods, which was known in the retail world as the Sears Grand concept. Pre-merger, both stores experienced major losses of consumers who turned to savvier, more innovative rivals, therefore making ‘traffic building’, i.e. market share and customer loyalty, a primary objective. SHC saw consumables as the avenue or vehicle that would build and redirect traffic back to its stores and it was felt that the Sears Grand concept would be an effective counter to the loss of consumers by utilizing Kmart's experience and know-how in the consumables and apparel industry. A major objective as a result of this strategy was the opening of 60 Sears Grand stores by 2006.

The second strategy also sought to build on and expand upon another Sears business practice known as the Sears Essentials model stores. These stores were small, convenience-focused stores and the intent of this strategy also focused on traffic building in terms of generating foot traffic from the sale of consumables and pharmacy/health and beauty aides. The aim was to develop these small stores outside of a mall setting by rapidly renovating some Kmart stores (about 400) that were located in major urban and high-density suburban areas, featuring consumer demographics and income levels similar to that of the typical Sears shopper. Similar to the Sears Grand stores but on a smaller scale, the Sears Essential stores were intended to offer a variety of merchandise and also featured a cashier and a centralized customer service center. As a large retailer, the small store concept would allow SHC to compete with specialized retail stores in various geographic...

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...iencies, which could ultimately be passed on to consumers in the form of lower prices. A lower pricing strategy would put SHC in a position where it could better and more effectively compete against Walmart, which in turn would be better for consumers because of the increased competition.

The sixth primary strategy focused on demographics from a cultural and ethnic perspective. A review of the market showed that the Sears consumer base was comprised of a large number of African-Americans and Latinos and that same demography was the majority consumers of Kmart's many inner city locations. Therefore SHC would be able to market and emphasize apparel labels that had the ability to appeal to a multicultural audience, which was already a natural make-up of both companies’ consumers. This was also seen as a launching pad in gaining a better footing in the minority market.