Once abandoned and now embraced, the retail heart of Chicago is making an unlikely comeback as a thriving hub of diversity and commerce.
Nowhere is this rebirth more evident than at the corner of State and Madison Streets, where Sears, Roebuck and Co. will open its new store Wednesday, ending an 18-year absence from the Loop. Sears is just the latest retailer to rediscover the area’s commercial allure, as new residents flock downtown.
A new Borders Books & Music provides a pleasant place to browse the latest bestsellers while sipping a latte. Down the street, Old Navy lures urban and suburban teens with its inexpensive mix of cargo pants and photo albums. Across the way, the Atwood Cafe in the newly restored Hotel Burnham offers a cozy spot to have a drink after work or before the theater.
But Sears’ return says as much about how the company has changed. The Hoffman Estates-based retailer is reaching beyond its core suburban customer base to embrace a growing, ethnically diverse urban clientele.
The new store also presents a difficult challenge for the nation’s third-largest retailer–how to please a customer base that is almost equally divided between whites, blacks and Hispanics.
Sears says it is up to the task because it has learned a lot about multicultural marketing in the past 20 years. In fact, the retailer introduced a program to develop new products and advertising pitches in the early 1990s focused on minorities. Out of an 860-store chain, Sears currently has special merchandise and Spanish-language signs in 180 designated Hispanic stores. Another 175 stores have merchandise targeted at African-Americans.
But rarely has Sears tried to please so many different groups of people–blacks, Hispanics and whites, working-class people, college students and professionals–in the same store at the same time.
“The message that America is truly becoming a multicultural society rings very loudly at Sears,” said Gilbert Davila, Sears’ vice president of multicultural and relationship marketing. “While I will not claim victory, we are working very hard to put this customer front and center.”
A micromarketing trend
To be sure, Sears isn’t the first retailer to tailor its offerings to court ethnic shoppers. Target Corp., for example, has been doing it for years at a detailed level that reflects even religious preferences of shoppers on different sides of the same town.
Arguably, the need to reach out to minority groups has never been greater. Data from the latest U.S. Census shows minority groups such as blacks, Latinos and Asians are becoming an increasingly bigger piece of the population.
In fact, Chicago’s Latino population has expanded at light speed, growing 38 percent in 10 years to 26 percent of the population. Meanwhile, the number of black residents in the city has declined slightly to 36 percent as the number of Asians has increased to 4.3 percent.
“What was mainstream isn’t mainstream anymore. It’s a smaller part,” said Ira Mayer, publisher of “Marketing to the Emerging Majorities,” a New York-based newsletter that formerly was named “Minority Markets Alert.”
“People seemed to be surprised by the Census Bureau report this year, but it’s been building steadily for a long time. Now there’s a perceived critical mass.”
Those are the customers attracting Sears.
When the company closed its doors on State Street 18 years ago, the city’s best-known shopping district had fallen on hard times. Many affluent shoppers had decamped to North Michigan Avenue or suburban shopping malls, cutting into the store’s traffic and profits.
Rather than figuring out how to market its wares to an increasingly urban and ethnically diverse base of shoppers, Sears chose to fold its hand. “Our customers were going out to the suburbs, and we were going with them,” said Sears spokeswoman Peggy Palter. “Other retailers were doing that too.”
Indeed, the exodus continued, leaving State Street’s remaining anchors–Marshall Field’s and Carson Pirie Scott–surrounded by a downscale collection of wig shops and cut-rate electronics stores. The seediness was accentuated by a growing number of empty storefronts and a miasma of bus fumes. Many loyal State Street shoppers began avoiding the area altogether.
A showcase effort
Sears says its new State Street store will showcase its most advanced effort to reach out to black and Hispanic shoppers. It’s a sign of the times for Sears, a giant retail operation legendary for its centralized, bureaucratic way of operating and a one-size-fits-all mentality. But stagnant sales have forced Sears to rethink the way it does business.
Among the touches that Sears hopes will strike a chord with State Street’s smorgasbord of shoppers:
Store signs will be in Spanish and English. The cookware section will feature tortilla-makers and other items that relate to Mexican and Latin American cooking.
In the apparel area, Sears has tailored its offerings with brighter colors and extended size ranges to appeal to both black and Hispanic shoppers. An extended range of shoe sizes will be offered.
In addition, the store will feature a collection of special-occasion hats for black women who attend church regularly and trendy clubwear that strikes a chord with younger black men. It will also feature the Stacy Adams line of high-fashion dress shoes targeted at black male shoppers.
One of the most dramatic examples of Sears’ diversity efforts is Unity Square, a 750-square-foot boutique on the second floor of the new Sears store. It offers a panoply of African-inspired products ranging from women’s clothing to decorative figurines to bathroom accessories such as shower curtains in a traditional Mali print.
In an unusual twist, the Unity Square shop doesn’t actually belong to Sears. It’s a licensed business that is the brainchild of Dee Robinson, a Chicago businesswoman who approached Sears with the concept six years ago.
“A lot of people saw the Afrocentric thing as a fad. I knew it was more than that,” said Robinson, who holds an MBA from Northwestern’s Kellogg Graduate School of Management and has worked at marketing giants such as Johnson & Johnson and Leo Burnett.
“I’m African-American, and I know that African-American people really relate to their culture. People are looking for things that speak to them whether it is housewares or clothing. They want to make a statement,” she said.
Boutique draws customers
Unity Square already has made a statement at a Sears store on the South Side at 1334 E. 79th St., a working class neighborhood with an almost entirely black population. It is the only other Sears store that features a Unity Square shop.
The shop has been very successful, attracting more affluent shoppers from surrounding areas such as Chatham and Hyde Park, said Wilbert Reed, the manager of the 79th Street store.
“She draws clients that don’t even shop in the store with us,” he said.
And it’s not only black customers who buy from Unity Square or other parts of the store that carry merchandise targeted to African-Americans, Reed said. A fashionable career sportswear line designed by African-American designer Anthony Mark Hankins has transcended racial lines.
“There’s a cross section of white people who buy it, too,” he said. “Sometimes we have stereotypes that aren’t right.”
Retail consultants applaud Sears for its efforts to reach out to black consumers in a different way from white shoppers.
“They’re responding to the population around an individual store, which is exactly the right thing to do,” said Cynthia Cohen, president of Strategic Mindshare, a retail consulting firm. “It’s a great thing for Sears to be trying.”
Of course, Sears has no intention of ignoring its other customers either, some of whom include affluent empty-nesters and young professionals.
The hardlines section has been slimmed down for city dwellers and is skewed more toward outdoor grills and gardening tools than weed-cutters and lawn mowers. Apartment-size washers and dryers will be heavily promoted as will hand tools, items that are in short supply in the downtown area.
There’s another niche group of customers that Sears recognizes but isn’t quite sure how to address yet: the 50,000 students that live in the area, attending a variety of colleges including the School of the Art Institute and Columbia College.
To get the word out to everyone that Sears’ State Street store is not just a clone of a suburban store, the retailer is launching a multipronged marketing campaign.
Advertisements will be appearing on buses and in subway cars. Some billboards and bus shelters will carry the message in Spanish. Urban radio stations favored by black listeners will get a share of the marketing pie as will Univision and Telemundo, two Spanish-language television stations.
“Early on we understood one thing,” Davila said. “This store in particular is a wonderful mosaic of diversity. So we engaged all of our different ad agencies. Our Hispanic and African-American agencies all have had their hands on it.”
The State Street store will communicate its message of diversity in another way as well. A large majority of its employees are black and Hispanic. That’s a switch from the 1960s when Anthony Goosby was one of only two black salesmen in the hardlines department.
Back then black sales associates were a rarity, and “blacks in management were unheard of,” said Goosby, who has spent 34 years at Sears and will be selling appliances at the new store. “Today, the sales associates are all black and Hispanic, and young whites are the minority. It’s flipped. It’s done a complete 180.”
