Sears Holding shifts focus to omni-channel

HOFFMAN ESTATES, Ill. — Among the highlights of the first Sears Holdings shareholder meeting since Edward Lampert became chairman and CEO were details on the company's progress in combining its brick-and-mortar and online businesses.

Sears, which operates the Kmart mass merchandise chain, uses the term "integrated retail" to refer to the integration of its businesses, noting that is where half of its online business comes from as customers buy online and pick up in-store and order in the store and ship home. Online sales increased by 25% in the fourth quarter and 17% in fiscal year 2012, the company said in February.

Ordering in the store and shipping home got a lot of attention recently with Kmart's popular "Ship My Pants" ad, which despite some criticism for its use of toilet humor, has since gone viral with more than 20 million views on YouTube and a promotion for its creator. According to the company, "Ship My Pants" became the sixth most viral U.S. ad of all time and the 17th most viral worldwide, with coverage on CNN, ABC's "Good Morning America" and other outlets.

Meanwhile, the company is launching new tablet and mobile apps, SHOPSears and SHOPSears Lite, which it said are now live in more than 350 Sears stores, with 40 planned for this year. More than 1.5 million transactions and $550 million in sales were processed through the apps in fiscal year 2012. Member Assist, a new app for the Shop Your Way rewards program, was rolled out last month.

The program has helped drive sales for the company as well, with 60% of sales at Kmart and Sears coming from members, and annual sales per member increasing by more than 8% as members spend 18% more than non-members.