Brand Loyalty Faces Many Challenges

Apple vs. Sears—It’s a Two-Way (Main) Street
written by Marilyn Canna

Most of us just survived another holiday buying splurge. What influenced your purchasing? Did you buy items from the same stores and manufacturers you usually do—whether big box, discount retailer, or online? Are you a loyal follower of companies and their brands? Are you unswerving in your trust or were you easily distracted by attractive competitors and, more practically, what was in your debit account? 

The recession and digital technology certainly altered the brand loyalty landscape this year. Some of us watched prices. Others bought a variety of stuff online they never would have just a year or so ago. Personal shopping apps and online buying made purchasing even more of a competitive sport than the swooping and grabbing that used to be prevalent at bricks-and-mortar places like Filene’s. That is, of course, when there was a Filene’s. In fact, as digital consumers, we often found ourselves more loyal to the channel—like Amazon or Zappos—through which we ordered our goods than to the goods themselves.  So much for brand loyalty. 

That loyalty so near and dear to companies can no longer necessarily be expected based on legacy, history, celebrity, etc. So how do companies continue to demand and get customers to repurchase? If you’re one of a handful of companies, like Apple, you are iconic and have a sort of emotional-design-technology connection that co-founder Steve Jobs created and nurtured. In fact, many customers remain Apple acolytes in spite of recent tech gaffes and customer service issues, according to a recent online piece in Forbes.

But, what if you’re Sears and just had one of your worst retail seasons in years while most of your competitors reported gains over last year?  Sears Holdings just won its proposal to stay headquartered in Illinois and keep jobs there if the state offered tax breaks and other concessions. That was before Christmas. This week came the coal in the holiday stocking news that the chain planned to close 120 of its Sears and Kmart stores nationwide. The retailer then revised the number to around 80, none of which are in Illinois. Retail analysts started asking what Sears actually means anymore to the average consumer.  

What it isnow is anyone’s guess. What it was for generations was as iconic as Apple is today. Sears is steeped in American retail history. At one time you could order everything from dry goods to a build-it-yourself home from the Sears-Roebuck catalog. Its first stores made it a reliable retail giant for decades, known for many household brands such as Kenmore appliances and Craftsman tools. 

However, efforts in recent years to remarket Sears as a clothier fell flat. And, according to a recent piece in the Wall Street Journal, now that Sears Holdings is being run by an investor, not a seasoned retailer,old stores are not getting refurbished and they’re operating without a chief marketing officer, you could very well ask who’s minding the store. Its online buying site gets raves, and there’s some customer engagement and interactivity, but where is the Sears brand in today’s competitive retail climate?  Its mission states how big it is and what product categories it offers—some primarily at Sears, to be sure—but how are Sears stores different from other department stores? Where’s the emotional connection? What does Sears believe in that makes it different from Kohl’s or J.C. Penney? Who are Sears’ average customers and how will it get that brand loyalty message through to them? 

Sears is still a huge retailer, but it faces significant branding as well as financial issues. In fact, both both Moody's and Standard & Poor's downgraded Sears Holdings' already low credit ratingin the wake of low expectations for 2012. This news was in spite of the announcement this week that the retail giant hired a chief merchandising officerfrom Brookstone Inc. who will also hold the titles of executive vice president and president of Sears and Kmart stores. 

For older companies like Sears and for newer ones or startups, 2012 could be an interesting year for seeking—or getting back—brand loyalty.