NOT SO GREAT INDOORS, CONT'D
Jeff Taylor shares my view of The Great Indoors and my lack of faith in Sears strategy:
The Great Indoors in Montgomery Co. MD was a wonderous makeover: old, ugly Sears shipping dock transformed into sparkling SubZero and Viking dreamland with a Starbucks up front. The store always seemed packed. But that is a function of the white hot real estate market in the area and the all the cashout re-fis, which is where you get $50K-$100K to spend on a kitchen. This necessary condition for success explains why there was never any hope for 200 Great Indoors outlets, or maybe even 50. Twenty sounds about right.
Home Depot's Design Expo might be a better proxy for the concept, one without Sears' backend problems. Expo's hook is the "custom design" services you get once you agree to spend X thousands of dollars on hardware.
And when will people get that you cannot just try to copy Target's products (Sears Grand?) to get Target's customers? It is (usually) aesthetically pleasing to go to a Target because the floor isn't choked with boxes and junk, and you can actually find what you want without a dozen false starts.
And my favorite strategy professor (whose web page could really use an update) is reassuring:
Any discussion of market trends that refers to particular businesses, especially nascent ones, especially in retailing, is subject to revision as time goes on. It's not like you said The Great Indoors was a model that all businesses should follow. At least it's good news for Expo.
I also note the idiocy expressed in the article that Sears' typical customer isn't interested in fancy housewares. Duh! The whole point of TGI was to tap people who have more money and taste than the typical Sears customer. I also wonder whether tweaking the concept could bring it to profitability.
Also, note that the new hobbyhorse is a Target imitation. As of a few years ago, Target's customers had higher incomes than Sears's. And to emulate Target, they're going to have to do lots of aesthetic things.
As it's likely to be executed by Sears, the "imitate Target" plan will produce a high-priced Wal-Mart. And it's not clear that the market has room for two Targets assuming Sears Grand could figure out how to offer style at a discount.