Sears continues to fall, and may soon be out of business.
If I were their CEO and someone asked me how to turn the store around with one last Hail Mary pass, my answer would be one word…”auctions”.
Yes, make every item available in every Sears store available for auction.
Bear with me.
The challenge for retail chains like Sears is that you have the in-store experience, and you have the online experience, and the two rarely converge or complement each other.
When you’re shopping in-store and you find an item and you may wonder: should I buy it, should I wait for it to go on sale, should I try to find it at another store, or should I shop online?
And when you’re shopping online, you simply search for the product and buy it at whatever store has the cheapest price (which is often Amazon).
So how do retailers overcome this?
By using auctions that:
- encourage shoppers to by from you (and not competitors)
- encourage in-store visits
- converge in-store and online shopping experiences
- encourage loyalty using gamification
Here’s an example.
I walk into Sears looking for a coffee machine. I see one that I like and it’s $250.
Just like an eBay auction, the $250 is the “Buy Now” price, what I have to pay to buy it right now.
If I pay the “Buy Now” price I’ll automatically get 10 points (I’ll get to the points in a minute).
My other option is to not buy now, but bid on the coffee machine.
So I take out my Sears app on my phone, and I scan the coffee machine UPC code and enter into an auction for the coffee machine.
The coffee machine is automatically added to Sears website and available for bidding by online users.
And just like eBay, there’s a minimum price Sears has set (that no one knows) so that it won’t lose money on the sale, and the auction is open for seven days. And anyone online can bid on it.
Therefore, if I want to try to get the coffee machine at a lower price (say I bid a maximum of $200), I have to not only enter into an auction I may not win, but I have to wait seven days to purchase it if I do win.
To bid, or not to bid (and just buy)?
Here’s where the points system comes in.
You want to encourage certain behaviour:
- Shopping in-store
- Purchasing at “Buy Now” prices instead of always seeking lowest price through auctions
- Repeat purchases
So a point system would be used as a sort of gamification to reward certain behavior.
For example, someone who has shopped a lot in-store, and has purchased a lot of “Buy Now” prices would have a certain amount of points, or a certain score. So, if they did enter an auction, they would have more “buying power” over people who had smaller scores. Thus, a Sears shopper with a 90 score who bids $200 on my coffee machine would win the auction over shoppers with a score of 5, even if the shopper with the lower score bid $205 on the coffee machine.
And loyal shoppers with high scores will also be rewarded with offers that drive them back into the store: Sears Travel, Sears Photos, Sears Makeovers, etc. (in other words, those things that you can’t necessarily buy online but have to visit the store for).
Retailers like Sears need to understand that with online shopping, people are going to price and compare whether they’re in the store or not.
In fact, technically your items are already in an auction – with the prices of your competitors.
So why not bring an auction-style system right to your customer, and reward them and their loyalty in the process?
But so is the status quo, and that hasn’t been working too well for Sears.