Sears Has Come A Long Way but the Fall Could be A Quick One

Roughly twenty years ago Sears Roebuck & Co ruled the American retail sector. The department store chain dominated consumer markets by disrupting the status quo. In the 1890s, the company introduced the Sears catalog, which was delivered to households across the United States; and inso doing, Sears changed the way that Americans thought about shopping and rising to the top within the next century.

At the time, most Americans lived in rural areas. As such, most Americans would buy their goods—clothing, housewares, etc—from little shops located at rural junctions. The general stores at these junctions, of course, had only very limited selection and charged very high prices because there was no competition.

As a matter of fact, Northwestern University professor Robert Gordon says, in his book The Rise and Fall of American Growth: “The Sears catalog had an even bigger impact in 1900 than Amazon has had today.”

That may seem surprising, so it bears another examination: The Sears catalog actually gave consumers more power than the massive data you can get from Amazon. Because the Sears catalog gave American consumers more choices—and lower prices—than ever, freeing shoppers from the expense of local merchant shopping. Gordon continues, “The cost of living went down the minute Sears became available.”

Nothing like that occurred during the rise of Amazon; as a matter of fact, cost of living has increased, if it has moved at all. By 1994 Sears (combined with Kmart) posted roughly $111.4 billion in revenue. In 2002, though, Kmart filed for bankruptcy, thanks mostly to the massive growth of discounter Wal-Mart.

Alas, though, the rise of companies like Amazon has shifted the retail market once again. Consumers are more willing than ever to shop from home—or on the go—rather than make a special trip to the mall. And this has contributed to the downfall of the Sears business model.

And so, like all organisms, Sears now must learn to adapt or die. According to Sears spokesman Howard Riefs, the company has made—and continues to make—strides to reduce overhead and combine physical stores with digital initiatives. Riefs assures that the company is focused largely on improving its stance in the market, saying, “We are confident in our financial position and remain focused on executing our transformation plan,” a plan which involves making shopping easier for customers.

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