please don't do the textbook questions, but instead SPECIFY ALTERNATIVE COIRSES OF ACTION and EVALUATE THE COURSES OF ACTION. thank you!!!!

106 can CATE D BUSINESS PROBLEM-SOLVING CASE Wil Technology Save Sears! Sears, Rocbock used to be the largest retailerin in stores well bead of competitors Walmart in the United States, sath sales representing to 2007 and Tarpet Corp in 2013. Sears has also been out front with the introduction in 2011 of a service percent of the US press national product for almost that lets shoppers reserve poodi online and pay cash 40 years after World War I Since then, Sears has for them in store in 2012, it launched online layaway Keadily bout ground to discousten sech as Walmart Despite these improvements, Scars has tagged in and Target and to competitively priced specialty reducing operating costs, keeping pace with current retailers such as More Depot and lowes. Even the merchandising trends, and remodeling its 2429 stores merger with mart in 2005 to create Scars Holding many of which are run down and in undesirable Company failed to stop the downward spiral in sales locations. It is still struggling to find a viable busi and market share Over the years, Scars had invested heavily in ness strategy that will pult is out of its rut. The Scars information technology. At one time, it spent more company continued to use technology strategies to on information technology and networking than revive lageing sales online shopping, mobile apps all other noncomputer firms in the United States and an Amazon.com-like marketplace with other ccept the Boring Corporation. The company was vendors for 18 million products, along with heavy in noted for its extensive customer databases of 60 store promotions. So far, these efforts have not paid million past and present Sears credit card holders, off, and sales have declined since the 2005 merger which it ased to target groups such as tool buyers, with Kmart. The company posted a loss of nearly appliance buyers, and gardening enthusiasts with 51.4 billion for 2013. Total losses between early 2011 special promotions. For example, Sears would mail and November 2014 amounted to almost 7 billion customers who purchased a washer and dryer an Sears continued to pin its hopes on technology. offer for a maintenance contract and follow up with aiming for even more intensive use of technology annual contract renewal forms. These cfforts did not and mining of customer data. The expectation was translate into competitive advantage because Sears's that deeper knowledge of customer preferences and cost structure was one of the highest in its industry buying patterns would make promotions, merchan In 1993, under the leadership of Arthur Martinez dising, and selling much more effective Customers Sears embarked on a $4 billion five-year store would flock to Scars stores because they would be renovation program to make stores more efficient, carrying exactly what customers want. attractive and convenient by bringing all transac- A customer loyalty program called Shop Your Way tions closer to the sales floor and centralizing every Rewards promised customers generous free deals store's general offices, cashiers, customer services, for repeat purchases if they agreed to share their and credit functions. New point-of-sale (POS) ter personal shopping data with the company Sears minals allowed sales staff to issue new credit cards, would not disclose how many customers signed up accept charge card payments, issue gift certificates, for Shop Your Way Rewards, but loyalty-marketing and report account information to card holders. firm Colloquy estimated around 50 million people The POS devices provided information such as the are members. status of orders and availability of products, allowing The data Scars is collecting are changing how its associates to order out-of-stock goods directly from sales floors are arranged and how promotions are the sales floor. Some stores installed ATM machines designed to attract shoppers. For example, work to give customers cash advances against their Sears wear has been moved closer to where tools are credit cards. Sears also moved its suppliers to an sold. After data analysis showed that many jewelry clectronic ordering system. By linking its computer customers were men who bought tools, the company ixed ordering system directly to that of each supplier. created a special Valentine's Day offer for Shop Your Sears hoped to eliminate paper throughout the order Way Rewards members that offered S100 credit for process and expedite the flow of goods into its stores. $400 spent on jewelry Scars was among the first major retailers to change Sears wanted to personalize marketing campaigns, the way it sold based on shifting consumer habits. coupons, and offers down to the individual cus- For example, in 2001. Scars began testing a service tomer, but its legacy systems were incapable of sup that lets shoppers buy online and pick up their goods porting that level of activity. To use complex analytic sh ay models on large data sets, Sean revamped its data management technology. It used to take Seara si products may have been wand for shoppers, but the weeks to analyze marketing campaigns for loyalty Idea was head of time Lampes contes in the club members, using a traditional large mainframe Sears tradition of trying to wolve problems by tamp computer and Teradata data warehouse software ing up new technologies at the same time curtains With new technology called Hadoop for managing some of the muninvestments icoded to keep the very large datasets (see Chapter 6), the processing ant retailer senerting sales can be completed weekly. Certain online and mobile Experts believe that experiments like Mygole commerce analyses can be performed daily, and are a diversion from Sear's overarching problems a deteriorating store network and a brand image targeting is much more precise, in some cases down that doesn't resonate with today's consumer to the individual customer Other retailers, such as Macy's and Nordstrom, are Sears's old models were able to use 10 percent of also struggling to keep relevant in a world where available data, but the new models can work with 100 shopping is steadily moving to the web. However, percent. In the past, Scars could retain data from only Macy's and Nordstrom are still profitable Scars 90 days to two years, but with the new big data man Holdings spends nearly $1.90 a square foot on Scars agement technology, it can keep everything, increasing stores and roughly 60 cents a square foot on Kmart its chances of finding more meaningful patterns in the stores, according to Matt McGinley, an analyst with data Hadoop processing is about one-third the cost Evercore ISI Institutional Equities. That compares of conventional relational databases. With Hadoop's with $9.70 a square foot spent by Wal-Mart and 5875 massively parallel processing power, processing by Macy's. Although Sears spent more than St mil- 2 billion records takes Scars little more than one min- lion setting up the Mygofer store in Joliet, the com- ute longer than processing 100 million records. pany was starving a profitable crosstown Kmart Sears spent several hundred million dollars Lampert still wants to focus on technology proj improving its stores in 2011, including technological ects that he hopes will turn Sears around, acknowl- enhancements. Woodfield Mall Sears, one of several edging that that today's shoppers are less likely to hundred that was recently remodeled, reflects the browse and buy in stores. Onc new service lets Scars new approach. Outdoor clothing from Lands End customers browse for shoes and apparel online and dominates the area near the main mall entrance, and then reserve items to try on in physical stores. Scars pastel-colored women's tops from Covington line is also creating digital displays for products that the main hall. (Sears owns both of these brands.) are more likely to engage customers with reviews, Workers use iPads and iPod Touches to access online instructional videos, and Consumer Reports ratings. reviews for customers and check whether items are in A service called In-Vehicle Pickup lets custom- stock. Ron Boire, who oversees Scars merchandisingers order goods online and have them delivered to and store formats, believes that with a little more them while they wait in their cars. Sear's In-Vehicle time and customer information, he can make the Return/Exchange in Five enables customers to re- store experience much better, turn or exchange purchases in the parking lot within Working with McKinsey & Co. consultants, a guaranteed time period of five minutes. Sears Sears opened a test store in 2009 called Mygofer in improved its online ordering system so that orders Joliet, Illinois. Mygofer was touted as a revolution- could be shipped more quickly and economically by ary combination that would meld the convenience using Sears's physical stores as well as distribution of the Internet with the instant gratification of a centers to fulfill them bricks-and-mortar store. The company gutted an Sears is refashioning its consumer electronic 80,000-square-foot Kmart, but the store did not departments as Connected Solutions shops that sell stock items for sale. The idea was to have shoppers devices such as a Craftsman garage door that can be place their orders at computers in the front of the opened or closed remotely with a smartphone and store, then pick up their goods at a delivery bay out baby monitors that can connect to the Internet. The back. Sears Holdings CEO Edward Lampert hoped Connected Solutions shops are being tested at three to roll out hundreds of Mygofer stores if the experi- Chicago stores before being rolled out more widely. ment succeeded. However, some days, more people Sears is also piloting radio-frequency tags in returned goods than bought them. Shoppers didn't 15 stores in the hope of increasing sales and margins like the fact that they couldn't see and touch things. by giving a more accurate picture of the merchandise Sears management had projected that over four stores have in stock. Management said this fall years, Mygofer would eventually generate $8 million that initiatives like digital signs and radio tags on in annual sales. Annual sales struggled to top S1 inventory could bring in $500 million a year in sav- million. Lampert stated that going to a store with no ings and increased sales. Part 1: Information Systems in the Ok, technology is maks to show that Sears's big beton the company more 109 What is the business impact? Where are the who personalized promotions and are they working According to Don Ingham, a portfolio manager at Tenth Avenue Holdings, Sears Holdings is poised profitable? Will Sear's tech to benefit from its moves to cut its physical space and increase its e-commerce operations. Sear's poor cal forays be able to halt its downward spiral? financial position prompted it to start embracing e- Source "How Sears Holding Company Optimized Online Tv commerce much earlier than other retailers to reduce Rebound: Tenth Arche Portfolio Manager, thestreet.com January 2, Sapun.B, January 27, 2015, Mark Nacinovic, "Seaso its physical storefront presence. Sears' efforts should pay off in a few years, wwwcars.com, accessed January 23, 2015, Suzanne Kapetan Other experts disagree. Despite bold attempts to Sear Gorinto the Data Services Game, ilagr. Aprill 2015 M on Technology." W Ser Journal, December 16, 2014, Kate Kaye, innovate with technology, execution is where Sears Bestilo "The Plan lo Rescue Sears, Wall Street Journal March 12,202 has stumbled, according to Credit Suisse analyst Gary Balter. Balter believes the company didn't invest enough in systems to make sure all its ideas 3-13 Analyze Sears, using the competitive forces worked properly, and it has not attracted younger, tech-savvy customers who want to shop that way. By all accounts, Sears remains a fading brand saddled 3-14 What was the problem facing Scars? Whale with too many nonperforming physical stores in ple, organization, and technology factors com undesirable locations. Even with better data analytics, knowledge of cus- 3-15 What solution did Sears select? What was tomers, loyalty programs, and e-commerce innova- role of technology in this solution? tions, the question still lingers about whether Sears is using technology effectively to solve its enormous 3-16 How effective was the solution Sears selection business problems. Is it truly able to offer customers Case Study Questions value chain models. tributed to this problem? Explain your