What does Eddie have that a lot of that businesses want? Data! This whole concept of him selling physical properties, lines of business, and product lines is all garbage. Why go out of your way to partner SYW with the likes of Uber, Expedia, UnderArmor, Groupon, etc. with a “dying” business? Because data that’s why. He has data to provide the who , what, when, where, why, and how a consumer shops and travels. This will be the cash crop, data will be the reason Eddie doesn’t lose money with SHLD.
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Op I think you are correct think how many years before Amazon made a profit selling stuff with free shipping even undercutting Wal-Mart sometimes selling at a loss they were building up data lots of it. Now they are using it very effectively. SYW is also giving away lots of stuff I get lots of freebies myself. They are building up data of shoppers habits and It may be valuable to sears or others.
Is anyone familiar with the financial arrangements at SYW?
Does anyone know how SYW was affected by various rounds of layoffs?
One thing that caught me off guard when was Eric Jaffe left the company, was this a sign of the next phase at SYW or poor execution?
Thanks
No idea what the percentages are but if you go to SYW website you will see all the partners of SYW. Many of them are in direct competion with Sears/Kmart i.e. Target, Macys etc.
Great post.
Any idea what % they get from partners such as a GasBuddy?
Tia
People, forget the data. SYW is a way to make C.A.S.H.. Everytime someone uses the SYW app or card or whatever SYW gets paid. So when you go to Sears and use your SYW card SYW gets paid a small amount from SHC to SYW. That is why they are totally different companies. When SHC needs cash they tell the cashiers not to ask if the customer wants to use their SYW card or cash in points. When SYW wants to take money from SHC they will tell the cashiers to ask everyone to use their points.
It is CASH, CASH, CASH. Nothin more nothing less.
When SYW partners with other companies like Target or Resturants or gas stations, as the customers use their card, SYW gets a percentage. That is why they are trying to partner with Uber, Gasbuddy etc.
Hey @1ynj,
Do you think SYW has a different viewpoint/customer angle on this than other companies? Thats presuming the SYW user base is the demographics mentioned...
"Why would anybody else want the member list and data of a company that can't make a profit?"
I like to think of this loss in margin more as an investment to attract these other companies/expand internal SYW usage and not as a day to day cost.
I am not disputing that they are in financial difficulties, but i think we should look to how amazon has spent money for the future vs how it was recorded in their financials. One should also look at what people thought of amazon as recent as 2014.
The fact SYW members are working it despite Sears demise is even more reason other retailers would want to be on board with the SYW program....and it comes with a ready made data base.
It appears many if not most of the active SYW "members" are working the system to get stuff for free or at drastically discounted prices, resulting in a gross margin on merchandise sales of 15% in the latest SHC annual report. Why would anybody else want the member list and data of a company that can't make a profit? SYW would be valuable if Sears/Kmart wasn't such a disaster. But it seems a stretch to think this information is valuable in itself.
As someone with an extended background in marketing, forecasting and business development, of COURSE SYW is valuable.
SYW will break off to become it’s own entity. Its already in the process since inception.
Data is gold. No such thing as invaluable. Even in the case of fictitious, repeat or inactive accounts, the system can easily delineate/discard erroneous data.
SO much selling of market data goes on far behind the scenes within commerce that your head would spin with ire if you understood the personal data each individual has amassed by corporations worldwide.
To the poster who thinks Sears customers are mostly lower class or old: both groups spend on shopping.
I live in a retirement community and most these folks have money. They spend money left and right. A good number of them will research online and, if available, buy in-store.
The lower class spends money often as an emotional purchase. Frugality is rare.
Both groups are well suited to be data mined.
Even if you apply the 80/20 rule to SYW, it still carries high value. Spend some time on the SYW app and you will figure where its headed.
I do agree that lots of the accounts are worthless, but you are forgetting that its data (bits); either people use those accounts and generate valuable data (to syw) or they don't use them. I don't think these companies are making deals for accounts when there is no transaction history to any of them
Just look up SYW members with 867-5309 or 555-1212 or your store's phone number. That will show how relevant SYW data is.
Working on the SYW data side I would say 20% of the data is accurate. That’s 20% of email addresses and names. It’s not exactly the Cambridge Analytica that Facebook provides.
What a crock of s**t.
Deluded fool.
Sorry OP, there's no there there. People who talk about the value of data don't know what they're talking about. Does data have value? Some data has tremendous value. Most doesn't. Why do you think SHLD data is worth anything at all? I'm not an expert, but I have some experience in this space. SHLD data is simply not robust nor unique. Other retailers won't care, Walmart, Amazon et al have way better and much, much more data. Vendors won't care, Whirlpool (for instance) has all the sales data they need. SHLD is now a tiny company with revenue across too many categories. It has some value for sure, but we're not even talking millions or hundreds of thousands. So, sorry, no leprechaun with a pot of data gold at the end of this rainbow.
Would SYW data not be valuable considering its unique niche? There is a lot of discussion about how these syw users don't use tech (which they clearly do). Does SYW have a monopoly on these people? Unlikely, but they do seem to have different users/data and that is worth a $, i just don't know how much
Also, FB data would not cover purchase history or product searches.
How valuable i lower class shoppers data for older folk? Go buy a data cut fromFacebook targeted to who you want to sell. Sears data is not specail or very valuable in todays world
It's funny you mention Citi, that was probably Eddie's only major mistake that he sold. Citi was the prime model of good company/bad company coming out of the financial crisis. How quick can newco grow to overcome the cash flow losses of badco? We seen it with the banks... Now hopefully before shc runs out of access to capital.
@ghb wins today’s prize.
One person gets it. Congrats!
SYW is a totally different company. It is not part of SHC. Please read the financial or go to Seeking Alpha, which did a really good job of breaking down what SHC is really about. Also, if you look at the definition of a holding company--as in Sears Holding--- you will see what the end game is. It is about the data and SYW and credit cards and any other little companies that are spin offs. Eddie has a stake in Citi bank, therefore, you must ask about the 5321 mastercard
If we could disregard the last comment and continue to look for some insights here that would be great.
SHLD is not the only company that collects customer data. Most retailers collect and analyze customer data and have customer loyalty programs in place. There are numerous entities that specialize in collecting consumer data, analyzing consumer trends and developing targeted marketing lists/plans. What would be so unique or revealing about SHLD data that other organizations would clamor for it? Why would they covet data from a failing retailer teetering on the edge of bankruptcy? If the data that SHLD possesses is that incisive and SYW so successful, then SHLD would be a retailing powerhouse instead of a monumental failure!
I suspect that would qualify as an inactive account? If that's the case then those companies would assign 0 value. However, the data they want would be valuable - spending and location habits etc..
Open to dissenting views here, trying to understand why there has been so much focus on this.
Not sure how reliable the shop your way database is. When I worked at Sears we would make up info to create an account for those unwilling to do so. I am sure it is still done.
Eddie should like out for #1 and every associate should be doing the same.
Hey OP,
I tend to agree with you, do you have any ideas into the economics of these deals? At what point could SYW be a standalone entity?
TIA
He'll probably sell SYW somewhere down the line.
Eddie won't lose money, that's true. But if you think he's doing it for the sake of Sears' employees you're delusional. Eddie is looking out for #1, and he knows full well how this ends. He will continue to toss overboard assets and people as he sees fit.