Let’s talk about the mental market space, sometimes called mind share. When you think of a product or a store, you’d better hope that consumers think of you first. Sure, there are a few commoditized goods and storefronts which predominantly compete on price; these aren’t attractive business to get into or be a part of. For everyone else, there’s nothing more important than being the dominant brand. You become the de-facto benchmark against your competition. You become the first place consumers look to buy a product. Awareness, familiarity, and trust are intangible, but invaluable, assets.
So how do you lose brand awareness? Consider Sears Department Stores. For many decades, Sears was the retail king in the United States until about 30 years ago, when it lost the crown to Wal-Mart.
The crown jewel of the Sears Empire – a big part of their success – was dominant mental mindshare generated by the Sears Catalogue. For almost one-hundred years, Sears printed a wide-ranging sales guide – the “big book” – which was hundreds of pages long and contained thousands of items for sale for distribution. It’s hard to believe, but there are case studies and books devoted to the study and history of this general merchandise catalogue. The catalogue created selling opportunities all across the country, especially in small rural communities with limited access to modern goods. At their leisure, Americans could browse through the catalogue in their own home and simply marvel at the breadth of goods offered. Look for products on your own couch! Mail-in orders from the comfort of your home! For decades, this was the best approximation of a modern “on-line” shopping experience as the developed world was going to get.
Sears kept building on their success, diversifying their department store business to include credit cards (i.e. Discover), brokerage firms, home services, portraits, travel agencies, optometry solutions, florists, and more. However, by the 1980s low cost stores and big box stores (Wal-Mart, Best Buy) would challenge Sears’ total sales figures, all while the multi-decade trend of urbanization kept reducing the comparative advantage for the Sears business model. Further, the costs of business diversification and expanding product lines, meant the catalogue just got bigger and more onerous. For example, the last Sears catalogue was published in 1993; it was 1555 pages, roughly the size of a phone-book. The expensive, comprehensive, annual catalogue was on its way out. Instead, competitors used low cost, targeted catalogues and flyers which they could reprint more frequently, and with updated prices, thus keeping in the mind’s eye of many consumers. After decades of dominance, Sears is now just barely hanging on after spinning off business lines and brands, mergers, and bankruptcy agreements.