Sears' 'grand' plan to win over mass consumer launches in Utah

DSN Retailing Today, Oct 13, 2003 by Laura Heller

WEST JORDAN, UTAH -- Sears is bowing its largest new store effort in many years this month with the debut of Sears Grand, a massive 210,000-squarefoot store that takes the company off the mall and more in the path of the consumer that Sears says it now wants to reach: the mass consumer.

The concept is not only a bold departure from Sears' current stores, but it also represents a radical new strategy that positions Sears squarely in line with its competition in both the discount and specialty store channels.

"One of our highest priorities is moving away from our department store past and realizing that our best competition is off the mall," Sears chairman and ceo Alan Lacy told attendees at the Shop.org conference held in New York the week before the store. officially opened on October 11.

Sears Grand is not just a freestanding "off the mall" unit, but also includes brand new categories for the retailer--not the least important of which are food, health and beauty aids and household consumables. With a Wal-Mart and Sam's Club next door and a Lowe's directly across the parking lot, the new Sears is in a rapidly developing suburban shopping district.

The store carries between 45,000 and 50,000 additional SKUs than a typical Sears and includes several entirely new departments, including toys, one-hour photo, key cutting services, nursery, perishables, health and beauty care products, a cafe and even fresh cut flowers.

For the first time, Sears will feature seasonal displays--one near each entrance--that will be swapped out with each event and feature product from several areas of the store. Previously, the chain only offered special merchandising areas for the winter holidays.

Toys is also a seasonal program in most Sears stores, but the Grand concept features a permanent toy department year round, something management believes will yield strong sales. Consumer electronics, traditionally a strong category for the retailer, has been expanded into a full-fledged home entertainment department, including music, movies and video games.

One side of the store features lawn and garden, automotive, tools, hardware and sporting goods facing men's apparel. The other side offers cosmetics, consumables, pantry items, books, magazines, greeting cards, hair care, kitchen electrics and a large appliance department leading into the soft and hard home areas, which in turn flank female apparel categories. Consumer electronics/home entertainment is along the back wall and apparel categories meet in the middle with an open stock shoe department and children's apparel.

The aisles are wide and uncluttered. Only the center aisle, called the boulevard, which runs the entire width length of the store from side to side, will feature product displays. According to general manager Kelly Mulherin, this 18-foot-wide thruway is eight feet wider than the other aisles, and Sears is committed to keeping the store uncluttered and easy to shop.

The expanded space has allowed Sears to re-enter several categories such as key cutting and realign product adjacencies for improved cross-shopping opportunities. Automotive car accessories, for example, are now located in the home improvement area with an expanded selection of floor mats, fuzzy dice, wiper fluid and motor oil.

"We've added a lot of items into the hardware department normally found in our hardware [only] stores," said Mulherin. These items include nuts and bolts and electrical supplies such as connectors for easy home repairs.

"The heart and soul of this store is what Sears is today, all the core businesses are essentially the same," said Jerry Post, senior vp, gm for Sears' off-the-mall strategy. "But we present the merchandise a lot differently [than a regular store] and will hopefully generate far more cross-shopping than in full-line stores."

But unlike Wal-Mart, which successfully lures customers from one end of a supercenter to the other, Sears Grand is laid out more for the shopper's convenience, with category adjacencies that logically flow into each other. "Wal-Mart has the confidence that people will traipse across the store and fill that basket," said Eric Gordon, research director at the Center for Retailing at the University of Florida. "Sears has no reason to have that confidence, it's more about the intercept [buy]."

In addition to the layout, Gordon questions the prototype itself.

"I think they're getting out of the frying pan and jumping into the fire," he said. This does not play to Sears' strengths. This is 200,000 square feet in which major appliances and tools play some role but not the role.

"That means they've built this big store that, if anything, dilutes its strengths," contends Gordon. "Big is not always better."

While Sears says it will be competitively priced in these new convenience categories, with just one store they do not have the buying power to secure such pricing from suppliers. "We understand that for one store you can't be in these businesses and enjoy the margins that our competitors do," said Post. "The issue becomes, 'how powerful are the cross-shopping opportunities?"