Among legacy brands, Sears is in troubled company. Payless ShoeSource is liquidating its 2,100 U.S. stores. Toys “R” Us closed its 730 locations last year and is struggling to come back in some form post-bankruptcy.
One might have expected that the pull of nostalgia would have protected these brands from the retail re-sorting underway. Customers have emotional connections to certain stores—places where their parents brought them as children and where they did their first Christmas shopping, and developed certain buying habits and loyalties.
So what was the breaking point for customers? Price? Experience? Convenience? Why, in the end, are customers abandoning their shopping heritage and breaking up with brands?
“It is more like these brands are breaking up with the customers. I think that at some point the customer decides to pack up and leave,” says Santiago Gallino, a Wharton professor of operations, information, and decisions whose research focuses on retail. “To me, it looks like the brands are consistently giving the customer the signal that they are done with them, that they are not going ... to give them what they expect from the brand and what they used to offer.”
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