Garry Kelly must help return the $41 billion department-store retailer to health, while simultaneously digesting a $1.6 billion direct-sales operation.
Three Key Focus Areas
Lands' End is best of breed when it comes to customer service. Its return policies and procedures are simple. It typically answers e-mails within four hours. Its call centers function smoothly. And its work force is loyal, passionate and well trained.
"The trick will be to take advantage of Sears' size without losing the culture and nimbleness that got Lands' End where it is in the first place," says Erin Kinikin, a vice president at technology advisory firm Giga Information Group.
Some integration in sharing suppliers and distribution networks must take place in order to be cost-efficient, says Karen Peterson, a vice president and research director at Gartner. Yet the two have very different supply chains in both acquisition and distribution. Lands' End handles customer parcels, delivered by Federal Express, UPS and others. Sears is far more retail-oriented, with hundreds of locations where returns can be handled.
If the pair decides integration is the way to go, Sears will need to merge distribution centers, reduce staffing levels, and pay attention to its reverse logistics processits system of handling product returns, says Peterson.
Data could be integrated without merging systems. Sears, according to Teradata's Schultz, already has signed on for data warehouses that combine customer information with sales and inventory reporting, and recognizes that the new retail landscape demands integration of databases that once allowed only for separate drill-downs. Customers' decisions can be linked now to suppliers' data to plan better for demand.
"The new trend is toward enterprise data warehouses," Shultz says. "Retailers learned from the failed dot-coms, where online business was kept separate from brick-and-mortar business. They didn't think in terms of their customers."