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Every year,
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Sears Home Services sends thousands of technicians into American homes to fix
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fridges, HVACs, washers, and more.
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And before very recently, this experience ended in a very clunky,
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outdated experience that did not match the trust the customers put into the
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brand. Today, we're going to dig into exactly how that changed.
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My name is Eniola Ibisanmi from Stripe's professional services team.
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And today I'm joined by BJ Naedele of Transformco.
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He is the president and chief commercial officer of
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Transformco, the business behind iconic brands like Sears,
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Shop Your Way, Kenmore, DieHard, CRAFTSMAN, and more. BJ,
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thank you so much for being here with us.
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Thank you, Eni. Thanks for making time today, team.
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All right. Well, this is a fireside, so let's get a bit cozy.
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Okay.
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I love your shoes.
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Thank you. Thank you.
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All right. So I heard that you have over 500 pairs of Jordan,
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400, 500?
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And can you tell us a little bit about that and also what brought you to
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Transformco?
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Yeah, that may be true. I got to figure out who shared that with you. Look,
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it's a real artifact of my career history.
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Prior to joining Transformco, I spent 10 years at Nike.
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One of the things I did at Nike was lead our sneaker culture.
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And so working with Brand Jordan, the Nike brand, Converse,
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really trying to bring innovation and inspiration to the marketplace.
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Part of that before was really leading all things digital at Nike.
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And so Nike.com, Nike Run Club, Nike Training Club.
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We actually cofounded and launched Nike+ here in San Francisco almost 20 years
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ago to the day. Before that, I spent a bit of time in pro and college sports,
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working in Moneyball at the NFL with Duke Athletics.
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And I started my career at GE Capital in the late '90s,
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right as the dot-com bubble was growing. So yeah, definitely have 400 pair,
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but a good reason for it.
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Yeah. If there's anything I know is that maybe I need to upgrade my shoe game.
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We can do it.
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All right. Well, today you all are going to learn three things. First,
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how Sears Home Services transform the payment experience for when a technician
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is standing in your kitchen. Second,
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how moving into a new payment system transformed and made company-wide change.
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And then third,
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how you felt leading this transformation and maybe some tips and tricks for
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others facing similar decisions.
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Sounds good.
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Alright. So let's get into it.
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I want to hear a little bit from you about,
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for those who don't know the business-maybe they know the brand-what was
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happening internally that led you to making this decision?
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Look, I think it says Transformco up there.
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We're called Transformco for a reason. We talk a lot about internally,
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turnarounds are hard. Turnarounds are challenging, but turnarounds,
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you're just fixing what's already broken.
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Transformations are something completely different.
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It requires a radical rethinking of your operating model, your tech stack,
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your go-to-market, and even business models.
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And so when you think about transformation and Transformco,
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most people don't know where you're trying to get to. And so for us,
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the amalgamation, we are the old Sears Holdings company,
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and we bring a lot of pride with that. You talked about the brand-trust, pride,
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reliability. And so,
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but that holding company of the brands you mentioned-Kenmore, CRAFTSMAN,
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DieHard, Sears,
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and Kmart-those are all amazing businesses for us.
The real
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growth engines right now as we're looking forward,
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and I think John talked about the acceleration earlier this morning-it's really
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our Shop Your Way loyalty program.
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We're one of the largest loyalty and credit card providers in the country.
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And as you mentioned with Sears Home Services,
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we've got almost 4,000 technicians that are committed to going into someone's
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home. That's a really private and personal moment.
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It's a moment typically of need,
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when a refrigerator or stove is broken before a holiday.
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And so the Sears Home Services business is the largest home services
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platform in the country. 4,000 technicians, over two million home visits,
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hundreds of thousands of subscribers.
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And so as we sit here and we think about what Transformco was and really where
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we're going, our aspiration is to become America's home manager.
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And when you think about that,
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the home is typically the place you spend the most time.
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It's also the single biggest financial investment. And emotionally,
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it's where you create the memories for life.
And so our mission really is:
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let's make home ownership easier, less costly, and more rewarding.
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And so when you talk about kind of what was going on in the business or the
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brand,
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all those businesses grew up as independent operating entities.
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That meant we had seven businesses, six different commerce experiences,
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five different processing experiences. None of it hung together.
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I would buy an appliance from Kenmore and I did not connect it to my warranty or
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to my repair. And so for us,
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really aligning on the mission and the vision for where the brand is
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going, we knew we had to make a change.
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It wasn't really just a payment processing project.
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It was really a transformational initiative that allows us to get a single
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view of the homeowner and connect everything that they've done with us.
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And so again, the brand and kind of where we've been,
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it goes back.
I was telling someone earlier,
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we first sold the first Sears home in 1908.
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We had the first Sears mortgage in 1911.
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And so you think about that heritage and trust.
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And so trying to go back to where we were just using technology to kind of get
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us there. True transformation,
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which is kind of what we're here to talk about today.
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Transformation and also unifying all of your different systems.
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Yeah.
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So I want to dig into the in-home experience a little bit more.
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What did that payment experience look like before,
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and what does it look like now?
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Let's start with the journey. So if you're a homeowner,
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it's the day before Thanksgiving or it's Thanksgiving and your
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range breaks. You got to call someone. It's not Ghostbusters. It's Sears.
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And so you are pressed for time, you're stressed.
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And so you're relying on the technician to be on time,
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to get into the house and to be an expert in what they do.
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And I would tell you our 4,000 technicians-extremely committed to
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serving the homeowner, first with the expertise and the knowledge to do that,
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but really with a commitment to the experience. And if I had to summarize it,
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while they were experts in appliances, over the last five years,
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they really became our payments help desk,
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which is not what we hired them to do.
And so they'd be there with their iPad
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taking a picture of the appliance or in with their tools on the
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HVAC.
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They'd have to put that down to then get a different tablet and system to be
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able to show you the quote and the estimate.
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You'd then have to go to a different tablet or screen or your own device to
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confirm the estimate. It was too many screens, multiple handoffs,
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and the repair would take 45 minutes,
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but that interaction of estimate to payment, to exit sometimes took 15 minutes.
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And I don't know about you, but whether it's Thanksgiving or just any Saturday,
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I'd rather be back with my family or doing something else.
And so it was really,
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really clunky. And I think for the technician,
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we had to equip them with the toolkit to do what they really,
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really wanted to do. I'd flip it back though a little bit,
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and it goes back to kind of what I said a couple minutes ago around America's
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home manager. We exist to serve the homeowner.
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And now if you're on the other side of that,
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all you want is the appliance to be fixed,
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the protection agreement to be in place. And so for our homeowners,
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it was a really, really fragmented experience.
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One that when the technician left the house,
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they were left with a really bad taste in their mouth,
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which is not what we wanted to deliver.
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So it looks like moving to this new system allowed for faster checkout as
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well as maybe more payment methods were unlocked?
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It's been game changing. And so,
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let me start with the homeowner side since we're right there.
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We talk a lot about trust and reliability and expertise from the technician
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side. As a homeowner, what we want to deliver is value,
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choice, and convenience every day.
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And so what we've been able to do by kind of moving from the legacy stack with
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five different endpoint solutions into one integrated is to unlock
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the rest of our capabilities.
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And what I mean by that is it starts first with our rewards currency.
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We've had over $3.5 billion... $3.5
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billion of Shop Your Way rewards redeemed since we launched.
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And so we've got tens of millions of homeowners with rewards in their account
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that previously they were unable to spend or use.
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We're not talking about rewards that you save up for a holiday vacation or a
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gift card.
It's really purpose-driven rewards.
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And so what we've been able to do is enable pay with points.
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And so while the technician is standing there at your kitchen counter or at the
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kitchen table,
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you can use the value that you've worked so hard to be able to pay for that
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repair today. Number two,
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and I talked a little bit about our credit card program.
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And so if you think back, the Sears credit card program,
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the first and largest retail co-brand product in the country at one point was
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bigger than American Express.
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Our Shop Your Way credit card program is one of the largest co-brand programs in
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the country. Previously, those products,
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if you come back to making homeownership easier and less costly,
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those products were not available in the in-home experience.
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And so that meant that our homeowners could not take advantage of the
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industry-leading offers that we had.
They had to use some other form of tender.
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And so we've been able to integrate what we're calling "apply, buy,
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and save now."
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And so it allows our homeowners to get the new credit card,
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use our bank partnerships to get up to 200 or $300 off their repair,
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and then use the promotions and the incentives of our business to really help
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the homeowner in their time of need. It's been game changing for us.
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I would say if you're an existing cardholder,
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what we've been able to build with your team's help,
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the card is on file everywhere. And so it goes with you in the home,
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out of the home, anywhere you interact and engage across the Stripe network.
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And I'd say third in this, if it's a $50,
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$100 appliance repair for a part,
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you don't want to pay with points.
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You maybe want to save them.
You don't want to get a new credit card.
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And so we've been able to implement buy now, pay later.
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And so with like one week of work,
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being able to offer alternative financing really delivers to the homeowner
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that value, that choice, that convenience.
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So game changing from those three pillars, I think again, to where you started:
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the technician is the expert, the homeowner is served. It's a win for the brand.
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It's a win for the business. It's a win for our partners.
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Amazing. And I want to dig into a little bit about the technician side of it.
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After talking to the technicians and making this change,
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did you hear any surprising feedback that you weren't expecting?
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Yeah, it's interesting.
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And if you guys seen that episode of Seinfeld where Constanza's walking around
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with all the papers and junk-that's what the technicians were doing.
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They had like more devices than my kids.
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And so what we've heard is really a simplification and a focus,
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and it allows them to focus on A, what they're passionate about and B,
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what they're experts in-passionate about serving and experts in repair.
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And so I think what's been interesting in that feedback over the last three
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months since we've gone live and scaled,
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we actually haven't heard about payments, which is good.
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It kind of reminds me of what my grandma would say,
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which is the meal that's amazing, no one's talking because it's so good.
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And so the technicians are truly immersed.
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What we've heard from them and the homeowner is more about time and more
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about satisfaction.
And so,
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I used the analogy before that that payment experience could take five minutes,
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15 minutes. If you're now cutting that out,
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the technician is saving over 150 hours
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of work a year.
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That's one extra week of productivity that our business and our technicians get
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back. The homeowner then gets their time back to go do what they need.
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So the feedback's been really encouraging. Almost no news is good news,
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but the feedback is higher satisfaction from the techs,
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better brand affinity and satisfaction from the homeowner.
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That's always what we want to hear. Okay.
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So that is going to be the transactional moment.
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But as you've kind of touched on a little bit before,
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Transformco is more than just Sears and Sears Home Services.
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You also have Shop Your Way. So I want to hear a little bit more about that.
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For sure.
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Can you tell me a little bit about how moving to
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Stripe and onto a new payments processor unlocked system-wide transformation for
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your company?
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Yeah. I mean, look, as I said,
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Shop Your Way has been around since 2009-literally tens of millions of
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active members and billions of dollars of rewards redeemed.
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And so we've been in the fabric of American homes for literally almost two
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decades.
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One of the things that when we were embarking on this transformational
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initiative, not a payments project,
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was really thinking about what else could it unlock and how do you bring this
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idea of affordability and financial services together with homeownership
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in a really unique way?
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What it meant for my team at Shop Your Way was home services and Sears was just
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a partner and a client.
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And it allowed us to really rethink the foundation of what we are.
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And from day one, Shop Your Way was, number one,
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about a universal currency, and number two, everything-as-a-service.
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And so the opportunity for us,
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with the replatform and the transformational work,
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unlocked three things for us that we were really trying to do over the last,
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let's call it 18 months, but we hit a blocker.
Number one,
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it's to take the rewards and really democratize them.
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And so take them from out of the retail box, out of the home,
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and bring them everywhere.
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And so one of the things you're going to see us continue to do here with Shop
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Your Way and Stripe is think about wallet-to-wallet integration and really
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giving the points the opportunity to go to more places every day, everywhere.
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Number two, and I mentioned the credit program,
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and we just relaunched the credit program as a service back in November with a
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new bank and new partners.
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The idea is that we can serve every franchise owner,
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every mom-and-pop, every regional provider,
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every local provider in the home space, in the retail space,
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with a loyalty and a credit program-we call it LCAS,
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loyalty-card-as-a-service-that only the biggest brands typically have
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access to, but then really bring it down and democratize it.
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Give the big tools to the little guys.
And so it's one of the things we're
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really excited about,
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especially getting this live and scaling it with Sears and Sears Home Services.
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It's the blueprint for where and how we scale up that side of the business.
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And I think third, not knowing how many are our partners or clients here,
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the idea that the member is ours is really antiquated.
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Or that the homeowner is ours. They're interacting with Instacart,
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they're interacting with Uber, they're interacting with a marketplace.
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And so every one of those transactions historically was closed off from
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us. They would happen on the merchant platform. And so now what we get to do,
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we truly get to know and serve 365.
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We get to partner with other brands and connect our members to their products
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and services.
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And the fact that both pay ith points or the credit program or the Stripe
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payment platform connects it all back together is a game changer.
It's a game
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changer for the member and the homeowner. It's a game changer for us,
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but it really does create a force multiplying effect with respect to
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the ecosystem. So I would tell you, for us, we're really,
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really excited about the foundation that's built, but the opportunity ahead,
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it's a completely different business model.
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It's not even a different product set,
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and it wouldn't have been possible without the core platform that we implemented
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here.
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Yep. We have so much to scale with you all on,
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and we're excited on the journey ahead.
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You talked a little bit about before how one of the most difficult parts here
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is moving onto a new platform, a new [payments] system.
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So there's [the] technology, and then there's also the transformation.
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The technology was the easier part,
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but actually transforming the system and all that comes with it is a little bit
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more difficult.
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And I know you know that by being on some of the calls that we have.
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So I think a lot of people in this room would benefit from hearing
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some of your tips and tricks on how you worked with the change management to
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make this whole transformation happen.
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Well, I tell you the technology today and with you and our team has been easy,
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the technology of the past was absolutely cumbersome. And again,
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I go back to some of this stuff had been around since 2003.
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And so you're talking about as antiquated and legacy of systems as possible.
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What I think really helped us at Transformco,
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and it comes back to what I said about our mission and vision around the home
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and becoming America's home manager and the relaunch of the cart-as-a-service
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platform: once we made that decision 12, 18 months ago,
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the infrastructure we had was just not viable.
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And so it really allowed me and the team first to look for partners,
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not vendors. I think second,
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a platform that could scale and adapt and be configurable,
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not an endpoint solution. So I think for us strategically,
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that was where we started. If I think tactically,
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which is maybe kind of day-to-day and how things get done,
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there's maybe a couple things I'd share. Number one,
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and I get this from my Nike days. At Nike, the Olympics didn't move,
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the World Cup didn't move, the Super Bowl didn't move. At Transformco,
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we're a date committed culture, and you set a date, you hit the date,
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come hell or high water. And so we set a very aggressive date.
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We started with you and the team late October. One week later,
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all seven business units were up and live in Stripe Connect. Three weeks later,
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we had a first sandbox environment, and like two months later,
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the first business unit was live on the new platform.
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And so it was really the date, hard date commit.
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And what happened when we did that, because again,
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we've got people and processes and systems-that wiring and that
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muscle memory is really hard to rewire.
And I would tell you, and you know it,
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there were a number of people early on: "But this is how we always did it." And,
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"I'm running this day-to-day,
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so I don't have time for this." And all of that disappeared when you said,
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"We are launching on November 15th.
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We are launching on January 31st,
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and we're launching on March 30th." And so everything in that first tranche was
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about date, what needs to be decided.
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The second thing I'd say maybe is,
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and I get this a little bit from both sports and special forces,
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we created speed pods-not a committee.
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Committees are where initiatives go to die,
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and we are anti-committee. And so a speed pod is a team of eight.
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It's one person per function.
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They are accountable and they are empowered to move with speed and purpose,
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which means the decision-making,
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the bureaucracy in a holding company with seven different business units and
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five different stacks immediately fell by the wayside. Because again,
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it was that group and that team that was ultimately both responsible and
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accountable for it.
And so again, that was really game changing for us.
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The idea that an enterprise transformation has a executive team,
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that's got a committee, that-we didn't do any of that.
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And I think the third one was kind of parallel pathing.
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And I say that because we got the technicians,
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the business operations, the technology team,
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all of that was working while we're building and integrating the technology
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stack. And so we didn't wait till the end. It wasn't kind of a waterfall,
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let's test it, alpha/beta, then roll it out.
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It was truly all three things working in parallel. And so,
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I said earlier about transformation and understand that it's a fundamental
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operating system change. The partnership angle, and look, your team was amazing,
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right? The professional services team facilitating workshops.
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But those four things of having the right partner focused on the platform,
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having that date-World Cup's not moving,
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our launch is not moving-getting empowered speed pods and then
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activating and inspiring the front lines in parallel.
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Couldn't have gotten it done without those four things.
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Yeah. And we really enjoyed the partnership with you as well.
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Being able to work with you all day-to-day,
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come up with new ideas to bring you onto the platform,
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especially with your aggressive timeline that you all let us know was not moving
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from the jump was really amazing.
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Yeah.
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It's awesome when teammates both internal and external share the same values
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and all are marching to the same objective. So it was great.
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Yeah. And you've probably heard through a lot of talks today,
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we always say here at Stripe, "We haven't won yet.".
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Yeah.
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So we haven't won yet here and we continue to aim towards
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reaching new and new heights with Transformco. But before we can do that,
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let's take a step back and look back at our journey together.
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If you could go back and change one thing that would make this whole process
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smoother or maybe easier towards this transformation,
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what would you say it was?
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Start sooner? Yeah, I would say start sooner, right? The analogy,
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the best time to plant a tree was yesterday, second best time is today.
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The reason I say start sooner is,
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and it goes back to my narrative around America's home manager and our new
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credit platform-those decisions and that strategic transformation
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was made in early 2024.
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And so I would've in hindsight kicked the engagement off and
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the replatform work off co-terminously with all of the other things we did.
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It may have been too much at the time,
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but I think given what we know to the prior question around your team's
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engagement support, the ease of the technology implementation,
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and kind of the operating system that we had,
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we could have done multiple things concurrently and been faster on our
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transformation agenda. I'd say go faster.
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Okay. Very, very ambitious,
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which does match Transformco's personality.
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So I love that. Next time, start earlier, start faster, get to the goal quicker.
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Yeah, absolutely.
400
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All right. Well, thank you so much, BJ, for being here with us today.
401
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You've allowed us to learn how you actually moved onto Stripe,
402
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what were the intricacies of that,
403
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how you actually changed this process and deploy new tools and devices on
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Stripe. So before we part here,
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is there anything else that you want to share with the team today about this
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process and how it's been for you?
407
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Yeah. I mean, what I'd say in closing,
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to Eni's support and help-we're just getting started.
409
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And the opportunity that we have ahead of us,
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whether it's new products and services, whether it's new partnerships,
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I think a lot about-and we think a lot about one wallet, one currency,
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one identity-and really if you can take that everywhere,
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every day, what does that mean?
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And so I'll just give you one example that's top of mind for us. Right now,
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most products are created at the one-size-fits-all level.
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And so the idea that every single one of you here would get the same
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appliance, the same protection agreement,
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the same home warranty-where we're going is to a version
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of this where it's a segment of one.
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You can customize your plan, you can customize your payment method,
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you can customize your tender.
And so again,
422
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I think back to what you hear from us,
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the transformation agenda continues to be aggressive and opportunistic,
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but we've got the right support, the right platform and the replatform in place.
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So it's all about what's coming next and continuing to push the transformation.
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Great. We're excited to continue this partnership together. All right.
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Thank you everyone.
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Thanks, team.
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And enjoy the rest of Sessions.