Sears Holdings has one of the largest and most complex supply chains in the industry. We sell a wide variety of products across all categories, and our supply chain is specially designed to support storing and distributing these products from jewelry and apparel to larger items like refrigerators and sporting equipment. We are committed to offering our customers and members an enhanced shopping experience focused on value and convenience that connects all the ways they shop – whether in-store, online or mobile. This integrated retail approach enables us to not only meet the changing needs of our customers, but to anticipate ways to help make their lives easier.
Customers now expect to receive their online orders quickly, typically within two days of making their purchase. In order to meet these changing expectations, SHC needed to become more competitive with our online delivery service.
Our challenge was that we had a single distribution network in the Chicago area which slowed down our orders to the West and East Coasts with orders sometimes taking up to five days to ship via ground.
What we decided to do was leverage the inventory that was already available in Sears and Kmart stores that were close to our customers, and served large geographical areas. We knew that if we could do that effectively, we could be in a market-leading position with both two-day and one-day delivery services.
In 2012, SHC launched Project Cheetah, enabling Sears to make a two-day promise for ‘mailable’ items. The Cheetah – known for speed and agility – is exactly what this program delivers by leveraging our store assets and in-store inventory to deliver products to our members within a two-day timeframe, using inexpensive ground shipping.
SHC has deployed a network of 13 Sears stores and 17 Kmart stores that provides two-day coverage to 99 percent of the population using cost effective ground transportation. It also provides next day services to 80 percent of the U.S. population. Consolidating demand into a small number of strategic geographical locations enables stores to fulfill hundreds of orders per day. This focus enables dedicated resources, engineered processes, training, tools and metrics focused on delivering a great member experience.
Additionally, during peak periods, we have the capability to turn on a number of stores in order to provide additional capacity when needed. We have also worked very closely with our Online Business Unit to make changes to our sourcing logic so that online orders are automatically sourced based on the lowest total fulfillment cost, while ensuring orders will meet the promise date to the member.
We are transforming Sears and Kmart from traditional brick-and-mortar stores that simply sell products to a company focused on serving our members by connecting the ways they shop. Project Cheetah is another example of how we can grow and deliver on our promise of integrated retail. Consumers see something they want, order it online and we deliver it to their home or office or wherever they want it delivered within two days or less. 1
When we focus on our members and execute with speed, that’s when we win. Cheetah represents another important path along our digital journey to becoming a market leader in integrated retail. Shop Your Way is about added benefits for our members and one and two-day delivery through our Cheetah network is another benefit providing value to our members.
1 While we have capabilities to deliver within two days to most of the country, only Shop Your Way Max members are guaranteed two-day delivery without upgrading.
Raj Penkar is Senior Vice President and President of Sears Holdings’ Supply Chain Business Unit.