Industry Views

SABO SEZ: Reflections on the Death of Sears and “Mass Appeal” Radio

By Walter Sabo
Consultant, Sabo Media Implementers
A.K.A. Walter Sterling
Radio Host, “Sterling On Sunday”
Talk Media Network

imSears used to sell everything. Tractors, tires, insurance, investments, chickens. In 2004, Sears was the dominant retailer in America. By the end of the decade, it was feverishly closing stores and dying.

Marketers blame the failure on aging store decor, failure to support the brand online, and merchandise offerings that were too broad. Circuit CityCompUSAFirestone and other highly targeted stores were super-serving specific product lines and diminishing the appeal of Sears’ profit leaders.

Nope. If a broad product line was the problem, Walmart would be a very small business. Operationally, Sears died from within by centralizing all buying and selling decisions. Local stores had zero autonomy and therefore were unable to stay ahead of customer preference trends. The bureaucracy was poison. Financially, Sears was a publicly traded company managed in the end by Wall Street speculators who probably wanted it to fail for their own gain.

SHOCKING WALMART NEWS: Walmart is the highest grossing company in the world. Larger than Chinese oil refineries, General MotorsVolkswagen, and Microsoft. It is the highest grossing company in the world.

Walmart’s decision strategy is surprisingly decentralized. It learned from Sears’ mistake. The employees you see working in Walmart are in charge. Each employee is assigned to a department. They see the profit and loss for their department and for each item they are selling. Employees are shown those numbers from day one. Walmart associates are expected to keep shelves stocked and to stay ahead of demand by ordering from distribution centers on their handheld computers.

No checking with corporate or clearing adds.

In times of crisis, such as hurricanes, Walmart colleagues can donate food, water, and other supplies to rescue workers without chain of command approval. Just do it. After one local disaster, a Walmart corporate type commented on the vast amount of donations made by a local store: “That’s a good use of autonomy.”

Walmart also learned from Sears how not to finance their company: 50% of Walmart is held by founder Sam Walton’s dependents and the Waltons control the board of directors.

So… what does this mean to you?

Walter Sabo was a founding architect of SiriusXM and began the recruitment of Howard Stern. He has consulted RKO General, PARADE magazine, Hearst BroadcastingPress Broadcasting, and other premium brands. He launched the first company to engage online video influencers, Hitviews. As an executive, he was EVP of NBC FM RADIO giving Dr. Ruth Westheimer her first media job and fostering the creation of adult contemporary. As VP ABC Radio Networks, Sabo hired Ringo Starr to be a DJ for a 24-hour special.