This story was originally published in Builder.
After six solid—if not remarkable—years of a housing recovery, and pretty good business times for many of the firms in the BUILDER community, it may seem odd to broach the subject of survival.
As in yours.
Sears was Amazon before there was Amazon. Like Amazon, Sears, Roebuck met household needs, sparked desire, removed friction, and reliably made itself at home in American houses for 125 years.
Sears, too, ranked among builders of homes and communities as an innovator, whose "kit homes" became synonymous with the American Dream for 75,000 families who'd selected from among 447 models and designs in the Sears Modern Homes Catalog between 1908 and 1940.
Now, Sears teeters on the brink of extinction. Kodak, Xerox, Radio Shack, Blockbuster, the Apples and the Netflixes and the Sprints and the Home Depots of their day, were once icons, beloved of many, jobs for many, and recognizable universally as both "best-of-breed" types and innovative cultures. Now, they're fading memories.
However, as much as those firms became familiar household names, none played so strong a role in the construction of homes as did Sears, which would ship a home's carefully produced and meticulously marked pieces and parts to a customer's site in a rail car that was individually secured with a red wax seal of quality assurance.
This seal was to be broken on arrival by the new owner, who would open up their boxcar to find over 10,000 pieces of framing lumber, 20,000 cedar shakes and almost everything else needed to build the home—all the doors, even the doorknobs.
The lumber came precut, kind of like a giant Ikea set, along with an instruction booklet. Sears promised that, working without a carpenter and only rudimentary skills, a person could finish their Sears mail order home in less than 90 days.
What's more, co-founder Richard Sears—a kind of Jeff Bezos of his era—recognized that his business, his operational processes, and the Cairo, Ill.-based, 40-acre mill that prefabricated many of the Sears homes that each made their way into a train car--were not simply about growing a company. Rather, Sears sensed a greater purpose, particularly as World War I soldiers returned from overseas deployments and started families.
Most American families at the time were still living in multi-generational housing. The reigning paradigm of the middle class was the Victorian home with all of these different little rooms for different family members. Sears looked at this idyllic scene of families living in harmony and saw … a wasted opportunity. Why should newlyweds move into old homes filled with old things when they could move into new homes and fill them with new things from Sears‽
Imagine, the original new starter home phenomenon came out of a period where "multigen" once reigned supreme among family households. And many of those original $600 to $6,000 homes—roughly $8,400 to $84,000 in today's dollars, are worth something today.
Most people knew about kit houses in their heyday because everyone had a Sears catalog in their house, says Andrew Mutch, an information-technology administrator who lives in a Sears kit house in Novi, Mich. About five years ago Mr. Mutch, 45, started driving around looking for kit homes using a field guide called “Houses By Mail,” posting his findings on his Kit House Hunters blog.
Mr. Mutch is part of a small network of kit-house enthusiasts across the country who are intent on documenting the remaining kit houses.
“It’s kind of like bird watching,” says Judith Chabot, a French teacher in St. Louis who moderates the Sears Modern Homes Facebook page and writes the Sears House Seeker blog about the kit houses she finds around the country. She says there are over 8,200 documented Sears kit homes and around 1,000 from the other kit companies. She says there is no estimate of how many kit homes are still standing in the country.
When Eric Romain, 32, an auto-industry engineer, and his wife, Jenna, 28, an accountant, bought their 1,400-square-foot house in Royal Oak, Mich., for $269,500 in 2015, they knew it was a kit house from the real-estate listing ads, but they didn’t know what that meant. The learning process that ensued has changed Mr. Romain’s life. He started by researching the model of his home, a Sears, Roebuck 1925 Vallonia, digging up the blueprints and photos as far back as the 1930s, and examining how the house had changed over the years. Now he is working to undo the changes, including restoring the porch railings, and he has plans to take off the aluminum siding.
So, what can today's home builders--local, regional, and national firms who've earned trust among buyers, land developers, manufacturer and trade partners, and financial investors over the years--take away from Sears' demise?
Here are four thoughts that occur to us, especially as we'd regard the next 24 to 36 months ahead to come as a stress test to the resilience of many builders' business and operational models as well as their value propositions in an exponentially changing technological, capital, and sociological landscape.
- Brand is table stakes. A trust-mark whose reputation is earned by standing for a promise and then over-delivering on the value of that promise is no mean feat, but it's now a baseline to securing a place in people's minds, hearts, and pocketbooks. Equity, currency, and mattering start—in today's consumer and business markets—from square one every day. That's the case even for brands whose reputation and track records date back decades.
- Data is just data without the tools and people to apply it to solving problems that avoid trouble and make money. Sears was the original emperor of big data, with a continent-wide knowledge base of items matched to the households that wanted them. Data exists. It proliferates, and it feeds on itself. By itself, however, it will not unleash either new applications or businesses, or greater efficiency in serving needs. Data needs people who understand and can use it to bend curves of cost, opportunity, and risk mitigation.
- Infrastructure and operations need constant grounding in supply capacity and demand activation. A 40-acre pre-fab kit production facility in Cairo, Ill., may sound hauntingly similar to some of the factory and automation focused conversation we're having today as a solution to labor shortages, and the need for construction velocity to create greater economic value. What's always true, however, is that these manufacturing capabilities are parts of a business value chain that must constantly validate themselves from an expense and productivity perspective.
- Innovation is not a one-time solution. Sears--which was an innovative company to start, and had innovation in its DNA--ultimately foundered on its inability to envision, self-disrupt, and re-organize its strategic and operational models to keep pace with where retail has gone.
So, Amazon is a trillion-dollar company. And this week we shed tears for Sears.
This story was originally published in Builder.
