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Sears’ Move Into IT Services: A Baffling Step If You Think Of Sears As A Retailer
Probably the best articulation of the investment versus traditional retail argument came from James Tenser of VSN Strategies. “Sears Holdings’ strategies are hard for people like us to quickly grasp, because we persist in viewing them through a conventional retail lens. Better to discard the merchant frame of reference and try to take this on its own terms. An asset is an asset. A profit-generating spin-off may be worth pursuing, or not, depending upon the alternative uses available for investment capital,” among other factors, he said. “If existing Sears and Kmart stores require costly, high-risk investment and huge tie-up of capital to generate value, but MetaScale’s data services can generate high returns with modest capital, well, then, the choice becomes clearer. It’s no different from some other chains that have focused on real estate investing over merchant profits in the past. Yes, we’ve all heard the conventional wisdom about sticking with one’s core area of expertise. But Sears Holdings is an investment vehicle first.”
MetaScale itself is officially a wholly owned subsidiary of Sears Holdings, albeit one with a lot of management overlap with Sears. It lists Phil Shelley as its founder and CEO, but Shelley’s day job still is Sears’ Chief Technology Officer. Oddly, neither Shelley nor any other MetaScale employee was quoted in the news release announcing the venture. That honor was given to Sears CIO Keith Sherwell.
A Sears internal comparison document made it clear that Amazon’s cloud operation is what Sears sees as the main rival for MetaScale customers. The comparison paints Amazon’s offering as a “This is what we’re offering. Take it or leave it” package, with MetaScale positioning itself as more of a custom shop, pushing custom security and encryption along with code development and implementation consulting.
If this is viewed as an unrelated business for Sears Holdings—given that it’s a legal wholly owned subsidiary, which is certainly a fair view—it’s another IT shop offering to sell its services.
A Consumerist piece this week offered a great reminder why a healthy amount of distance from Sears retail is not necessarily a bad thing.
Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code.
-Marc
