If we must use that analogy, it's more like they answer "yes!" to "are they free?" but then a stalker follows you with binoculars, a camera, and a notebook for months because you took the cupcake, and if you show up with private security guards and ask for a cupcake they say they're free but only for people without private security because they want to have a stalker follow you around, which is obviously a weird and concerning thing for them to require and would tend to make one turn them down for being such creepy/threatening weirdos, and then tell other people that they're creepy/threatening weirdos so those others don't take their cupcakes and get followed around by a stalker as a result.
It would also tend to make one hope the business model of being creepy weirdos is outlawed or otherwise destroyed.
I read an interesting forum post about Sears a few years back [1]
TLDR: In 1985 Sears had vast mail order experience, co-founded an ISP (Prodigy), and had their own credit cards (Discover). All the components they'd need to dominate online retail. In 1993 they closed their mail order division. In 1995, Amazon launched.
This was the same time the company was leaving the Sears Tower. I think Sears faced a number of bad decisions over the decades leading to its early and later decline.
Building the Sears Tower was a bad idea. It ended up being a waste of money. Reading those articles it's clear that they were hemorrhaging money in 1990, compared to being profitable 20 years earlier.
They weren't hemorrhaging money at the time. Sears was profitable from 1980 to 1990, including fiscal 1990.
1990 is approximately the year when their earnings started to plunge toward losses. Earnings nearly got cut in half from 1989 vs 1990. At the time Walmart was still the #2 retailer, having just passed Kmart (for the curious, Walmart went from $32b in sales for 1990 to $485b by 2015; now Walmart is in a position where their earnings are falling and sales growth has been flat for years as Amazon starts to eat into them).
This NY Times article from January 1991, describes the atmosphere well:
The Sears Tower was built in 1970-1973 though? I'm still not seeing what it had to do with the profitability of the company in 1990. And you originally said that leaving it was a bad idea, not constructing it.
I wonder if the seemingly shortsighted decision was influenced by the desire to appease stock analysts (who are more interested in next quarter's results than next decade's) by shedding costs quickly. Analysts seemed to think the company was heading in the right direction... few companies (aside from Amazon) have the luxury of telling analysts "We're forgoing profits now so we can build up our business"
A quote from that 1993 article:
Still, most analysts hesitated to say that the revamping alone would put Sears back on its feet. "Put it this way: They're off their knees," said George A. Ashur, director of corporate bond research at Chase Securities Inc. "This is without a doubt good medicine for the company, but I have to see a few quarters of good returns before I'm ready to ditch the conservative show-me attitude."
At the time, mail order shopping was dying. Montgomery Ward and JC Penny were also bailing on mail order. The Sears model was for a pre-car America, where it was either Sears or some local overpriced retailers with no selection. By 1993, the US had malls everywhere there were people, Wal-Mart was taking on the job of servicing small towns, and the customer base of people reachable only by mail had shrunk.
Sears had the first good fulfillment system, but it was geared to the postal system and rail transport. It took about two weeks to get delivery on something from Sears, and you never knew what was out of stock until the package showed up. That allowed malls to beat them on convenience.
> The operation, which also published 50 small specialty catalogues, only recently began accepting Visa and Mastercard for purchases, and for many years, customers had to pick up their purchases at a Sears store even though other catalogues would mail items directly to homes.
Its easy to be nostalgic but it really sounds like sears had already fallen significantly behind by the time they shutdown their catalog.
> Its easy to be nostalgic but it really sounds like sears had already fallen significantly behind by the time they shutdown their catalog.
It's not unique to Sears either.
I know a few people who work at the Target HQ in Minneapolis and have heard stories in the past of executives being astounded by online shopping, especially the idea that people would do comparison shopping while in the store. Target has significantly increased their digital offerings since then but it's still far from the experience of Amazon.
But they are very different experiences. Amazon is the grand prize winner in the contest of looking up something you already know you want to buy, bundling it up with some shampoo you forgot to pick up at the grocery store earlier, and having all of that on your doorstep in two days.
Amazon's Achilles Heel is browsing. Their selection may feature 100,000 relevant items to my search but I seem to only find shitty versions of products, or at too high prices, regardless of how I mess with the search filter.
Target is great when you have an idea of what you might like to buy: you can try on shoes, sit on furniture, feel the bedsheets - you get the idea.
Sometimes the hassle of not getting the right size/feel of a product bought online, and having to repackage it and wait for another delivery simply isn't worth it compared to driving out to your local Suburban Mall Hell to just go and buy things like mom and dad used to do.
> Amazon's Achilles Heel is browsing. Their selection may feature 100,000 relevant items to my search but I seem to only find shitty versions of products
I would say their major problem is the lack of curation. The Amazon Marketplace brought all the garbage of eBay sellers to Amazon, and mixed it in with everything else.
As a result, you have to carefully watch out for things fulfilled by third parties (often subject to high shipping and strange return policies), and items with sketchy review histories. I can't find an article on it now, but I've come across items where it seems like the manufacturer pulled a bait-and-switch. The initial reviews are all very positive, and all the recent reviews are low and talk about poor product quality -- yet the item still has a reasonably high score. Did they seed reviews themselves? Did they actually change to a lower quality product? Who knows.
There's certain categories of products that I find to be an an utterly frustrating shopping experience on Amazon -- cell phone accessories is the one that immediately comes to mind.
Also now long-dead Borders; linking this post I'd come upon years ago because it has links to all the relevant posts in the first paragraph (even though one of them is more focused on the online shopping aspect): http://theferrett.livejournal.com/1641949.html
I know a few people who work at the Target HQ in Minneapolis and have heard stories in the past of executives being astounded by online shopping, especially the idea that people would do comparison shopping while in the store.
I look at Barnes & Noble as another company that is screwing the pooch by not doing a better job with Internet sales, and a better job integrating internet and meatspace (aka "click and mortar"). I do a lot of business with B&N but I almost never buy books from their online store. Why? Partly because their site sucks, looks & feels dated and klunky, lacks the selection of Amazon's site, and doesn't offer good recommendations like Amazon does.
And if I go into a B&N store and want to special order a book, I can get free shipping, if it goes to my home. But if I want them to ship it to the store so I can pick it up there, it costs extra. WTF? And if memory serves correctly, you can't return items bought online to a physical B&N store.
There's just so many ways that they are missing the boat and nobody seems to care.
Don't get me started on B&N. As ridiculous as it sounds, I want to support B&N because at least they employ people who are somewhat local vs. an Amazon fulfillment center X miles away. Plus with that story of fake/reprinted books on Amazon, I'd rather buy directly from the retailer instead of a commingled pile.
My ideal B&N experience: go to their site, find the book I like, purchase it for the same price as Amazon (usually the prices are the same), then go pick it up at the store. But no, I can't do that. If I want to pick it up in store, I have to pay the "in store" price (which is often at 10-20% higher). No thanks.
I'm with ya. I kinda like supporting B&N and I do to a point. I live near a store and I go in the cafe for coffee all the time, and I do wind up buying books and magazines there. But I just find nothing at all appealing about shopping on bn.com, even with my member discount and whatever.
Whoever is running their e-commerce operation really ought to be fired. Or if the lack of awareness is coming from higher up, somebody (CEO?) ought to be fired.
When I was a kid my mother had a dozen different department store charge cards, and you could only use them at that store. What a nightmare that must have been when it came time to pay bills.
It's really crazy when you look back and think about it.
They actually tried a diversification strategy by discontinuing the big-book and spinning up specialty books. The idea was that they could get a higher $/book by targeting specific interests. This helps in the world of prospecting (i.e. buying names from co-ops like Epsilon). It was also a strategy that would allow them to take advantage of bundling innovations at USPS like co-mailing. Obviously, none of it worked which was more of a function of merchandising than anything else.
By the 80's, Service Merchandize had green screen "Silent Sam" terminals in all their stores you could walk up to, order what you wanted, pay right there, then walk to the back of the store and pick it up from a conveyer belt from the warehouse area, a bit like picking up your luggage.
Imagine if this kind of system went through a dial-up and the items were simply shipped to you. We would have had mass e-commerce in 1985. The French did actually have something like this via their minitel system, fwiw.
In the end, open-ish standards and SSL won the race, which is probably a good thing. I'd rather be stuck with a broken-ish web than locked into these various proprietary designs controlled by one corporation. Even if Sears/Prodigy would have delivered these services, they would have been crushed by the web.
In the 1980s the number of people who had dial-up online services at home was tiny. It wasn't anything close to mainstream until the mid/late 1990s -- well after the start of Sears' financial difficulties.
Yes, in 1993, when Sears decided to close their catalog, much of the internet was still considered off-limits for commercial purposes [1]. We take today's use of the internet for shopping (and other commercial uses) for granted, but in 1993 it was not at all 100% clear that such a use would be allowed.
But home computer adoption was skyrocketing at the time. My argument here is that once people saw the utility of this then they'd buy modems, the same way they saw the utility of printing and bought printers for their computers.
At the time, a modem was the same price, if not cheaper, than a printer or a floppy disk drive. It wasn't exactly a luxury expense.
Ah, you're suggesting Sears could have run their own dial-up shopping service? Maybe, but I think it was too early. It would have been a text mode system (home computers, such as they were in the 1980s, were systems like Apple II or Comnmodore or TRS-80 or maybe CP/M or DOS if you had a "business" computer at home).
Macintosh computers were available, but expensive and not a typical home computer. And bandwidth on dial up at that time was maybe 2400 baud, way too slow to send any kind of detailed images of products that consumers would want in a catalog.
It might have gained some adoption, but in that era I think most consumers would have found filling out an order form and faxing or mailing it in easier.
But let's be real, the graphics of prodigy were not really up to the task of showcasing products.
nb: the graphics of prodigy were a semi-standardized limited color pallette vector graphics system called NAPLPS. Benefit was that it was extremely low bandwidth, the limitation was that it had no way to handle bitmap graphics (like GIF). By 1994, prodigy just became an http provider (on top of the existing service).
I was active in the BBS scene during that time. What could be done over 1200-2400 baud was fairly impressive considering the technical limits. Especially when ANSI and RIP graphics became the norm. Later 4800 and 9600 modems became cheap. By the late 80s these were the norm.
Ordering systems would have been trivial to implement if the political and commercial will was there. Not too long after this you had Prodigy, Compuserve, and AOL offering these kinds of services. I remember they let you order flowers, buy software, etc from their online systems.
The web and tcp/ip internet replacing it all didn't come until much, much later. From 1983-1995 online services were ruled by non-TCP/IP dial-up BBS services and proprietary services like Prodigy. Home internet didn't take off until 1995-1996 and even then it was fairly limited.
>Apple II or Comnmodore
On top of all the PC clones running DOS and Windows (Windows 1.0 was 1985), Amigas, Macs (as you mention), Timex/Sinclair, etc.
Macs were home computers, there were just less of them. Back in those days people paid large prices for home machines, so the pricetags might seem high today but the utility/novelty factors made up for it.
In the mid-eighties to mid-nineties home computers still cost several thousands of dollars. Installing a modem was no small feat either in computers from that time.
Some were cheap. The TI 99/4a was almost being given away in the mid-80s. But I don't ever remember it being popular for accessing dial-up. Its Terminal Emulator implemented a proprietary protocol and was actually more popular for its text-to-speech capability.
Meh it was pretty easy. Due to the fact that there were a limited number of peripherals to begin with, getting a modem hooked up to a serial port pretty much always worked. (first one I had was an Atari XM301 in 1982). By 1991 you could buy an IBM PS/1 in any retail store with included internal 2400 bps modem for about $1200. Related to this, PS/1 models included Prodigy (the sears venture) and Promenade a short-lived effort between IBM and Quantum link (ie what became AOL).
For some reason I really hate the name "Service Merchandise". I'm only familiar with it from Wheel of Fortune, I don't know where the stores were located. Something about the name, though, like "soft serve". Grammatically ambiguous is the best way I can describe it.
It was a regional company, so depending on where you're from, it's not surprising that you never saw any of their showrooms. In other areas you had places like BEST (not to be confused with Best Buy). In my region (Northwest), there was a similar company named Jafco, which was purchased by BEST, along with a number of other chains.
Service Merchandise was awesome in the '80s and early '90s. My parents bought a lot of household items there and they always had a great toy selection around the holidays. That was a decent model.
Sears is a textbook case of the evolution of a company. As the Atlantic points out they were really successful at capturing trends, but what Sear's secret was they were building infrastructure that let them respond to changes quickly.
Then sometime between 1975 and 1985 they seem to have started thinking they were successful because they were 'the best' and took their eye off the core competencies that made them nimble (logistics, accountable management practices) That is according to people who worked there at that time. Suddenly people who should not have been promoted (they weren't 'Sears people') were being promoted, and things were focused less on operations and more on public image.
The challenge is that you start managing to the effect rather than the cause. It is like companies that spend all of their time doing 'market research' and spend their time trying to be better than their perceived competitors at what their competitors are doing. They lose sight of why they were doing so well in the first place. "chasing your tail", "following the followers", lots of names for it, but they were being challenged by many up and coming brick and mortar competitors (K-Mart, Target, Walmart,
Montgomery Wards, Etc.) By worrying about those threats they forgot to watch for the changes in the market, and that led to a lot of what would be difficult pain.
And yes, it is "easy" to see that looking backwards in time at their choices, but even in the 70's and 80's there were voices telling them that they were not focused on the right problems.
They also moved from their old headquarters to the Sears Tower in 1973/74. Uprooting the whole physical social dynamic of a company to move to a new headquarters often does not go well. Good luck Apple.
I read an article about it many years ago. Who you bump into and are physically near can create and maintain certain workflows and company culture. This was probably more important before personal computers and the internet. You are likely to have lunch with people you see and different business units can cross fertilize with greater ease. Moving from an organically grown bunch of buildings near each other, to a huge building with only elevator access to each floor, will change how people interact quite a bit.
"Act 14" on this This American Life episode tells the story of what happened when the Vienna Sausage Company moved production to a new, purpose-built facility. If you'd rather read than listen, scroll down to "Act Fourteen" here, https://www.thisamericanlife.org/radio-archives/episode/241/...
It arguably exemplifies precisely what you're saying, except in a much more literal fashion.
My father (economics professor) said you can date the start of a company's demise from when they build a palace for a headquarters.
For one thing, the design of the palace becomes a huge distraction for top management. Once they move in, they start to believe they are the godlike businessman the palace suggests they are.
Is there a name for the phenomenon of companies building themselves a headquarters right as they begin to fail? I've heard that idea before, but haven't been able to find either a name for it, or any data on it.
The urbandictionary link refers specifically to college presidents & universities, but there've been a few articles about how it applies to corporations as well.
The thing Apple has going for it is that they already build a headquarters a long time ago, and also outgrew it a long time ago. Their employees are already used to working in buildings near but not in the headquarters, and being moved around in and out of the HQ campus.
Also, the new HQ is only a mile from the old one and they're going to keep the old one too.
So it's not the huge cultural shift of a new HQ -- it's more like just a new set of buildings.
It's true, they spent a lot of money making a nice new HQ, but not even 1/2 the employees will move into it.
I sometimes wonder if retail stores just have a timeline?
Even in the 80's, when I walked through Sears, I could tell someting was wrong. I do know they never paid their employees well, but housing was definitely cheaper. And the average employee didn't treat the job as a career. It's gotten so bad, even the extremely desperate worker just looks at Sears as a chit job.
That said, there's so many stores I walk through today, where it's obvious they are on the downward curve.
An example is Home Depot.
I used to enjoy the stores. The employees seemed happy. Now--I just dread going in. The customers are treated terribly, or as potential criminals.
The employees seem to hate their jobs with a passion. Plus--their prices arn't the cheapest anymore. There's nothing about HD that entices me these days.
Oh, and the cameras. If anyone from HD corportate happens to read this; it's employee theft. Your company managed to piss off every employee, including security. They just don't give a dam anymore.
I'm suprised someone hasen't tried to capture the magic HD had twenty years ago?
I really think the only reason they are still, supposedly, on the rise, is they are practically a monopoly in many counties.
I truly think too much management, too much gimmicky sales ploys; will ruin a retail establishment.
A good company manager should be able to walk through a store, and figure out what's wrong. It's not that complicated?
I sometimes think we should take away the title of Manager. The most capable, natural leader should be the one in charge. Hell--stop using the word "Manager" all together?
We all know the best, most capable, natural leader never becomes a Manager. Or, if they do, they leave because of lousy working conditions.
Anyways--I will miss Sears when it closes in my county. They carry some specialized automotive tools that have saved my butt a few times. Times where I couldn't wait on a Amazon delivery. And they have every size combination of Levi's 501 made.
I don't have the answer, but just know when the employees start to dislike their job, it's the kiss of a slow retail death.
>In 1993 they closed their mail order division. In 1995, Amazon launched.
If one compresses the timeline, it does seem like Amazon killed off Sears when in reality, Sears was already getting killed off in the 10 years before 1995.
In the 1980s...
- Home Depot, Lowes, Builders Square, etc home improvement stores were taking away business from Sears power tools (Craftsman)
- Best Buy and Circuit City were taking the consumer electronics business and appliances. Less customers buy Sears Kenmore.
- Target, Walmart, Williams-Sonoma, etc were taking housewares (pots, pans, etc) business
- consumers (especially kids) didn't want "department store brand" clothing from Sears/JCPenney because they were "uncool". They wanted the boutique brands (Guess jeans, Calvin Klein, etc)
- peak mall traffic was 1986 and malls started dying off after that. An easy way for me to remember that point in time is the 1985 movie "Back to The Future". When you watch the DeLorean spinning around the parking lot of Twin Pines Mall, remind yourself that you're seeing "peak mall".
- credit-cards criteria were loosened and easy credit was expanded. Sears no longer had a captive audience with the Sears credit-card that kept shoppers within Sears' "walled-garden". Before 1990s, if a young person had zero credit history, one of the first credit cards one attempted to get was the "Sears department store credit card". Once one built up credit history with it, he/she could then try to get Visa/Mastercard. In the meantime, they used the Sears card to spend money at Sears. To contrast the difference, today an 18-year-old college student can get a Visa/MC without a parent as a cosigner. That type of easy credit approval for a person with no job was unheard of in the 1960s/1970s.
There were lots of competitive forces that Sears' management didn't respond to long before Jeff Bezos arrived on the scene.
>today an 18-year-old college student can get a Visa/MC without a parent as a cosigner.
FWIW, when I was 18 I had to get a secured card[0] and I was barely able to get it (I had to go to my bank twice to appeal the decision). It's definitely different from 40 years ago but it's not super easy for most college students, and a lot of it came down to the fact that I had a few grand sitting in a checking account and a job that paid $12.50/hr. Some of my friends who didn't have that got flat out declined multiple times (I have one friend who has applied for three different cards and she's been denied all three times, with no credit history at all).
[0]: Basically, the card had a $500 credit limit and you had to give the bank $500 for a year, after a year if you've made all your payments they give you your $500 back. It still sat in my savings account generating "interest", but I couldn't spend it
When did you turn 18? I started college in August 1999 and nobody I knew had any trouble getting a credit card. Many fraternities and sororities used credit card applications to freshmen as fundraisers. It was typically a $1000-$1500 credit limit. Some people I knew had $10k in credit card debt by the time they graduated...
I turned 18 about two years ago. Things might be different now because of the credit CARD act of 2009 which makes it slightly harder to take advantage of younger people (giving a $1500 card to people who have never had credit before and don't know how important it is to pay off the balance in full seems particularly evil)
>Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from ... wooing students with T-shirts, free pizza and other free gifts at university-sponsored events
Well at least the interest rate was only around 30% </s>.
[edit] The end of the story for me:
The credit card I got from that was amazingly bad. I had a bill put in the wrong mailbox in my dorm, so didn't get it until 3 days before it was due. I called up customer service:
Me: I can mail this today, but it is unlikely to make it there by the due date, I've always paid my bills on time, can I get a 1 week extension
CS: We can do an ACH for $20 or you will pay a late fee if the check you mail is even a day late.
Me: Seriously?
CS: Yes
Me: Okay, do that and cancel my account.
CS: Okay.
It's like they didn't even want me as a customer if I was going to pay my bills every week. Not a single attempt to retain me when I canceled my account. At this point, I had a Discover card, the CS reps for which were very kind, and my bank had just gotten my debit card on the Mastercard network (previously it was only an ATM card), so I had no absolute need for their card. Had this happened a few months earlier I might not have been willing to cancel as so many places don't take Discover.
> It's like they didn't even want me as a customer if I was going to pay my bills every week.
I semi-suspect you know this, but if you pay in full every month, they don't get to bundle your debt up and sell it off as a security. Interchange fees are competitive enough that it's probably close to break even (and getting more so every year), but the securities are comparatively pretty sweet for the issuers.
While I did not get woo’ed, sadly enough, to get an unsecured credit card with Bank of America, all I needed to do was enter my personal information and some notion of income (without verification).
In less than a minute, BoA’s automated credit card application approved me and mailed out a $1000 limit card.
>Things might be different now because of the credit CARD act of 2009 which makes it slightly harder to take advantage of younger people
No "might" or "slightly" about it. It's significantly different now. When I was 18 you only needed a faint pulse to get 10s of thousands of dollars in credit. People would hand out credit applications in dorm rooms, at events, in front of classrooms, just anywhere and everywhere you could think of. It was a different time.
Yea this stuff changed drastically over the last 10 years. I got credit card limit that were like almost half of my (very low) annual income in 2007 with almost no history, while 4 years later my coworkers pulling >150k/yr couldn't get any credit card without doing the secured bullshit.
My brother-in-law got his first card in his early 20s, and around 2009. He had to go the route of getting a secured credit card, too. In his case, the issue was probably that he was trying to go for his first credit during the recession. He married my sister in 2010; they got their first apartment based on his income, but on her credit rating.
Had you taken on college loans? I know that's how I established my credit and, once I had that in my history, they were all to happy to give me a card with an absurd limit (for me, at the time, with only a work-study job) with little more than my name and SSN.
It seems strange that taking on a ton of unsecured debt would make creditors think it's more likely that you'll be able to pay off even more unsecured debt, but that seems to be how the system works, or at least worked two decades ago when I was in school. Perhaps the emergence of for-profit colleges that don't really offer their graduates the kind of post-schooling opportunities that traditional colleges do has changed the way that college loans are perceived since they no longer reliably predict future earnings the way they used to.
There was a change back in like 2006 or something that made it harder for college kids to get credit -- have to demonstrate income, which as we know most don't. Conversely, when I was in college creditors were mass calling dorms to get signups. One kinda tricked me into "allowing them to send me an application in the mail" and a pre-approved credit card showed up instead. I never used it till a few years after I got a paying gig, but it did kinda work as a means of building credit via account age.
Anecdotally, when I went appliance shopping 8 years ago I went to Sears not Best Buy. When I went tool shopping I preferred the lifetime guarantee of Craftsman. I wasn’t a pre-existing customer. I live within ~30 minutes of three large malls that all seem to be doing well. There is a Sears Hardware store that just closed in the last couple years.
I bought a pretty good mattress and also a good vacuum from Sears. They're not high-end but they're pretty damn good.
The only reason I had a vacuum at all in college was because Sears still stocked parts for 10 or 15 year old vacuums so I was able to repair someone's broken vacuum.
I went appliance shopping there too, around the same time. Cheap-ish fridge that's still going strong, and an LG washer and dryer (LG repaired the washer under warranty last year). The Sears I bought them from was razed a couple of years ago.
There are some "Sears home appliance showrooms", and an actual Sears about half an hour away, but there used to be 3 or 4 in that same area.
The "lifetime guarantee" of Craftsman just doesn't have much sway anymore. All of their tools are made in China junk that breaks if you look at it funny. The quality is just non-existent these days. Might as well just go to Harbor Freight if that's the kind of tool you need.
> consumers (especially kids) didn't want "department store brand" clothing from Sears/JCPenney because they were "uncool"
FWIW all my clothes were from Sears and JCPenney, my taste be damned. I know a lot of other kids my age (grew up in the 90s and 00s) were the same way, at least until quality tanked in the mid 00s.
These days, a store brand of clothes with respectable cachet is "Kirkland" from Costco. Basics like Kirkland jeans, underwear, sweatshirts, etc. I don't know if the kids like them, but a lot of adults wear Kirkland with pride. (Sort of like a billionaire driving an ecogreen Toyota Prius... an adult wearing Kirkland as a badge signaling "I shop at Costco which means I can afford Ralph Lauren but I'm smart enough to know that Kirkland is better quality for the money.")
I have pants from Kirkland mainly because I'm too lazy and too tired to go to another store and pay more for the same stupid thing. It's not like Kohl's or JCPenney carries some special brand cachet anyways. Guess jeans? Nobody cares!
> peak mall traffic was 1986 and malls started dying off after that.
One of my American relatives worked for Sears mail order business from the early '80s till it closed. They were saying in the '80s it was an awesome place to work, good benefits, there was so much potential there it seemed.
Ben Thompson goes all the way back to 1962 to chart the forces that would end up killing Sears:
1962 was perhaps the most consequential year in retailing history: in Ohio the five-and-dime retailer F.W. Woolworth Company created a new discount retailer called Woolco; S.S. Kresge Corporation created Kmart in Michigan; the Dayton Company opened the first Target in Minnesota; and Sam Walton founded the first Walmart. All four were based on the same premise: branded goods didn’t need the expensive overhead of mass merchandisers, which meant prices could be lower. Lower prices served in turn as a powerful draw for customers, driving higher volumes, which meant more inventory turns, which increased profitability.
Sears, which had introduced a huge number of those brands to America’s middle class, first through their catalog and then through a massive post-World War II expansion into physical retail, was stuck in the middle: higher prices than the discounters, but much less differentiation than high-end department stores. By the time Buldak gave his statement the company’s fate as an also-ran was sealed, even though no one at Sears had a clue: Buldak’s stated mission of being “an integrated, powerful specialty merchant, with brand names and our own lines of exclusive merchandise” failed to consider whether customers gave a damn.
Fun fact, American Express still to this day uses the name Charles F Frost (usually written C F Frost) for all their credit card ads. He was an advertising executive in the 60s.
The failure of Sears is really the success of Chinese manufacturing and the rise of disposability and dramatically lower prices that followed. Craftsman used to be tools that would last you for decades, but you paid. Now it’s the same crap everyone else is selling with a different logo thrown on.
> Craftsman used to be tools that would last you for decades, but you paid. Now it’s the same crap everyone else is selling with a different logo thrown on.
Only certain items. They certainly have fallen victim to slapping the Craftsman label on cheap plastic "things" out of desperation which has definitely impacted their reputation as of late, but for those of us who can't pay Snap-on prices for everything what remains of Sears' actual tools are still light years better than the malleable/rusty junk Lowe's, Home Depot, Amazon and Walmart sell.
No, I didn't have power tools in mind when I said that. Anything with a motor or more than a few moving parts is worth shopping around.
The basic hand tools and precision instruments are the Craftsman products I find are still worth using. The wrenches, torque wrenches, calipers, hammers, screwdrivers and the like. Nothing electronic or mostly plastic.
If you watch DIYers, technicians or engineers on youtube you'll see that.
You also get to see differences between product you cannot see. I just saw a super glue benchmark and well loctite won, but some "neat" brands failed early.
This is a problem with software as well -- someone creating quality long-term-viable systems has to fight harder than someone creating shaky facades. Everyone wants long-term-viable systems, but it is an easier, faster, cheaper task to build junk that lets you meet/beat this quarter's numbers.
I wonder if that mentality just grew beyond the point of no return.
The thing about tools is that most people only need moderate to low quality--nobody outside of the trades or a mechanic needs durable tools. When I fix my cars, I often have to buy or fabricate some special tool. What do I care if it only lasts for one job? How many times am I going to do that same job in my lifetime? Once. So I don't get all worked up about "quality" tools. Bear in mind I do like decent tools, but there are almost none to be had these days anyways.
Prodigy was truly awful. As I recall, it attempted to appeal to non-techies with a graphical interface at a time when computers really weren't fast enough and color graphics sucked (CGA). Just terrible in comparison to commercial services like CIS as well as BBSs (both paid and free).
Sears was such a dominant player at EXACTLY what Amazon does that at one point... more Americans had Sears catalogs than indoor plumbing.
It use to be normal to take the Sears catalog out to the outhouse and use it for toilet paper.
Retail is flat circle, you just move the counter between the seller and the customer. Some generations like picking out the products, some generations like having someone pick it out for them. Some like it getting delivered, some like picking it up.
Not much changes... people need goods... but no one makes all the goods they need.
Sears had 120 years of experience selling stuff to people through the mail. It's unbelievable how they managed to not parlay that into what amazon is now.
I often wonder what the story of Sears means for Amazon. I think at first, my thinking was that what did Sears in was not noticing the shift to e-commerce like Amazon did, and that to unseat Amazon, it will take another shift that an upstart sees that they don't. Then however, I start to wonder what shift might that be? Voice assistants, it seems like Amazon is leading the way, not that it will be taken by surprise. Logistics? Seems like they are a logistics first company. I guess I can't see the future though, like everyone else.
I think for now I've settled on that the similarities are just that, similarities. Two things with some common history don't have to share the same fate. And looking for lessons in the history of one to apply to the other might be more of a false equivocation than we think. The times are fundamentally different, so perhaps though their stories echo each other, they are fundamentally different companies.
Yeah, I'm usually pretty quick with my upvote, even for articles that appear interesting at a glance, or articles that might spark interesting conversation, but I didn't do upvote this article. While I found it okay to read, the comparison between Amazon and Sears, fundamental to the whole thing, just feels like too much of a stretch to me.
I think the comparison between car insurance and AWS was the breaking point for me.
Probably reliant on a fundamentally new platform(?). If we do end up with a rich AR world (a la Rainbows End), perhaps it will simply be an instant purchase based on lived context (e.g. Run out of something? Instant order. See something you like? Instant order.)
That said, seems surprising that Amazon would miss that boat.
I think you're right that Amazon won't miss this boat (but someone might be able to do it better than them). Amazon are already looking at printing instant-order dash buttons directly on products.
I think the things that could threaten amazon's core business one day are:
3D printing. Whether the designs are free or paid for, its not a given that you'll buy the designs through Amazon. You might get the filament through them, but that's a fraction of the value they currently capture.
Sharing, rental and communal ownership. Many of the things I buy from Amazon are never used full time. Whether at a local or national scale the norm could shift to communal resources rather than private ownership. Particularly as city apartments get smaller and have less storage.
Direct ordering from China or other producers. Amazon have already lost this to alibaba. If we started ordering more everyday things direct, this could hit Amazon.
Full AI Ascension. If we completely leave corporeal existence behind, it would put a dent in Amazon's business. Although, on second thoughts, we'd probably be running on AWS...
This is a good list. But I'm wondering what makes you think Amazon has lost direct ordering from China to Alibaba? Amazon makes this process pretty smooth, where a Chinese vendor can directly compete alongside other marketplace sellers. For Alibaba, on the other hand, you're going to a special site based on the expectation of getting cheap stuff from China.
This means that at least for me, most of my direct-from-China purchases have been from Amazon. Though I'm also often happy to pay a little extra for FBA, which also seems like a great way to maximize value for both consumers and Chinese manufs.
It is so much cheaper to ship an item from China then from within the United States. Shipping is subsidized in China and then the US Post Office will take the item and deliver it the rest of the way for free. If I can wait 4 weeks for an item I try and buy direct from China.
1. If shareholders turn on the company for some reason, it could cause a chain reaction as the margins are so thin and operations costs growing.
Normal tech companies are more insulated from these kinds of problems as they don't require physical assets like traditional companies and take extremely healthy margins.
Amazon is balanced on a knife's edge, financially.
2. Actions by the US government could also be a threat worth considering as Amazon is a monopoly now. It currently is thought to not hurt the consumer. At the same time, the value in Amazon is the thought that they could 'turn on the profit faucet anytime' but when that happens, they'll almost certainly not be good for the consumer.
3. Jeff Bezos is also a single point of failure. He's amazing but probably still mortal. Amazon might not weather his absence well.
The article didn't mention that Sears almost sunk itself with overwhelming logistical challenges in the early mail order days. It was a close call; if they didn't get a handle on those challenges back then, the capital inefficiencies would have erased them. This article alludes to the problems [1], but there was one article I can't find now that gave some specific examples of the astounding inefficiencies they successfully grappled with. When starting, it was far from obvious that mail order would succeed, just like it was far from obvious that general retailing over the Net would be successful in many categories when Amazon started.
> Then however, I start to wonder what shift might that be?
Not possible, but what I would like to see as a shift: Much deeper logistical integration with stakeholders that involve sophisticated, complex, ever-evolving, and hard-to-impossible-to-reproduce trust relationships between manufacturers, the retailer, the transport infrastructure the retailer depends upon, and the end-consumer. Turns the Net retailer into an end-consumer's direct-from-producer supply chain manager, cut out vast swathes of distribution middle layers, and pass savings directly to the end-consumer, in exchange for embedded preferences shared by the end-consumer over a long period of time (decades). There is yet to emerge a retailer I would trust with sufficient monitoring capabilities to deeply embed within my household, auto-manage all the various supplies, lifting the cognitive load of that aspect of household management. Even if one did emerge, they wouldn't have the history established that I would trust they wouldn't change to monetize that trust later on, because existing incentive structures make that trust very difficult to maintain.
On a concrete scale, I'd be happy to establish that kind of relationship to auto-monitor and auto-order direct from producers various groceries and consumables, for example. And let machine learning pick up enough data from my habits to establish my preferred level of BIFL-ness/value/zero-wastage (or other quality axes), combining with others in my same selection criteria strata to crowdsource the selection results, and auto-suggest best-fit matches, with accompanying explanations, reviews, and historical reviews (an area Amazon currently has a gap at systematizing---very difficult to find out how many products do over long periods of time). For the producer and retailer, this shifts constant fighting for consumer attention to a vast steady demand that they can plan around and address in many ways logistically; if a producer knew the consumer trusted the product that came in the package was X brand dishwasher soap for example, then the packaging can be plain, completely recyclable, and perhaps even reusable, and even delivery routes can be optimized. However, the way the market currently structures incentives, many metrics are excessively gamed by the producers or it outright goes-to-the-highest-bidder, or producers and retailers work together to dilute initially-high-quality offerings over time. The Holy Grail of many marketing execs is this kind of locked-in preference that simply exists as a consumer's background radiation; I'd be happy to play along with that for specific strata of quality metrics, for an expressed explicit profit margin granted to that supply chain, if I knew I wouldn't get fleeced over time.
Amazon is actually obsessed with NOT becoming Sears. Internally, companies like Sears are referred to as "Day 2 companies." Day 2 companies are trying to maintain the status quo. Day 1 companies, like Amazon, are constantly trying to be disruptive and innovative.
Being called "Day 2" is one of the worst insults within Amazon.
I was impressed to see how small a space Panasonic/PanaHome could build you a house or apartment tower in Japan. The apartment itself was made from nice material and pretty livable for being 50 ft^2. (Meanwhile in California, no way to escape beige carpet and 80F interiors with no A/C.)
I think it's funny the author referred to Sears' "everything store" was a "genius marketing move." Back in the day, they used to call those "general stores."
This does sound ironic, but the scope of what Sears Roebuck offered was staggeringly greater than what you could get at any brick and mortar store. For a time you could even order a house: https://en.wikipedia.org/wiki/Sears_Catalog_Home
Well of course they did. We live in an industrialized society and they had an industrial offering of products. Actually, we live in a digitized society now and that's where Amazon stepped in. General stores existed in an era before branding, before supermarkets, before everything was made in a factories halfway across the planet.
Yeah - it's hard to imagine a world where rail shipment, parcel delivery, industrial warehousing, and efficient processing of mail orders are recent technological developments. But they were! And bringing tech into the domain of consumer retail has been profitable throughout history.
You should read the history of retail, general stores used to be places you ordered goods from or where you had the counter person pick out your goods from the shelves behind them. Piggly Wiggly revolutionized this model by letting customers pick out goods and bring them to the front of the store, and Sears changed the whole economy by giving rural Americans (most people at the time) access beyond the monopoly of their local general store.
Why does every discussion about Sears bring that up? The concept of a manufactured, knock-down house was not Sears' innovation, it was just another product they added to their line because it seemed like something rural Americans would want. It's not that noteworthy.
The descriptions of applied Randian Objectivism in Honduras are particularly... noteworthy:
"The greatest examples of libertarianism in action are the hundreds of men, women and children standing alongside the roads all over Honduras. The government won’t fix the roads, so these desperate entrepreneurs fill in potholes with shovels of dirt or debris. They then stand next to the filled-in pothole soliciting tips from grateful motorists. That is the wet dream of libertarian private sector innovation."
>They then stand next to the filled-in pothole soliciting tips from grateful motorists. That is the wet dream of libertarian private sector innovation.
Probably a more apt 'libertarian utopia' would be an entrepreneur buying land from consenting property owners (Converse to the government forcing people to move and not respecting their property rights via eminent domain), build a road (via a decentralized, competitive bidding process rather than a single point of economic co-option opportunity such as a state) and then charging access to the road (with guards in low-tech community, Toll-payment box in medium tech community, and a Bitcoin Lightning-Network payment channel in a high-tech society.) ;]
Nice way to take a swipe at libertarians, but it's incredibly obvious that it isn't true. How do you think civilization got started? Was it by some central authority that decreed to build roads and do everything or was it from the ground up by tens of thousands of individuals working together for their own interests? Outside of Rome, it was the latter.
People in Honduras need government reform very badly--because someplace there's some oligarchs living large who have some serious explaining to do. Also, you're talking about a nation of people who are uneducated and living on like $2 a day. You can't be both ignorant and free (in the economic sense), now can you?
I think this article ignores some of the other tenants of Amazon's corporate strategy. While Amazon is an online shopping behemoth, they are also expanding in to AI, web hosting and Platforms as a Service, financing, robotics, logistics, and lord knows what else. I think if you want a more accurate foil to Amazon, you should look at Alibaba.
1. Slowly but steadily run the retail operation into the ground.
2. Sell the real estate to your own REIT, and use the proceeds to prop up the stores - but now they're on the hook for rent.
3. Continue running the stores into the ground, and when they inevitably can't make the rent, shut them down. Your REIT now holds a lot of prime real estate that can be sold or rented to others.
It cuts the shareholders out. It leaves the valuable part of the business in the hands of a select few, and leaves the crappy part of the business in the hands of the shareholders.
That was a keen ploy to buoy the stock for a couple more years so the insiders could get out of their holdings. It was like a rear-guard holding action. It takes time to unwind large positions, then leave Mom & Pop holding the bag. It's an age-old Wall Street tradition.
The difference is that nowadays, information and insight is propagated and digested much faster than it was in the 80s. It is much easier for Amazon to detect and react to threats than Sears was ever able to.
In my opinion, there's a threshold of information absorption and digestion, beyond which a corporation can be sure to survive no matter what, as long as it doesn't cease to adapt.
> It is much easier for Amazon to detect and react to threats than Sears was ever able to.
True, but the competition of the 70s and 80s was also playing at the same speed. Sears was able to react to 80s-paced threats just as fast as anyone else could.
It might actually not be 'easier' today for anyone to keep up with and defend against as many potential threats as there may be today. Amazon, however, is mostly in a league of their own, and generally are the threat to other companies, not so much the other way around.
So does this mean Amazon will soon provide a section of the mall that always have parking close to the doors? ;)
(In all seriousness, it does not bode well for Sears that my local mall, which seems to not be dead at all, always has spots 1-2 cars away from the doors outside Sears while people circle the lot out front)
Unfortunately, The Atlantic doesn't work on the free web, where users control who gets to load content on _their_ computer, rather than having the website dictate who to sell out to before seeing the text requested. Is there a different source?
The Atlantic doesn't actually provide the second as an option without interacting with JS. There's no way for someone to subscribe if they are running ghostery+noscript like I am.
It absolute is, but linking to "locked content when viewed with a normal browser that has sane security addons installed" on hacker news is always bad form.
Or, you can use CURL. Then, view it offline if you don't want to see ads that it links to. Or, turn on no javascript/images in your browser. Or, use a text base browser.
I just tried it. It works great. Same content as what I saw on the open internet -- the one with ads.
1) "In 1969, Sears, Roebuck & Co. was the largest retailer in the world, with about 350,000 employees. Sears executives decided to consolidate the thousands of employees in offices distributed throughout the Chicago area into one building on the western edge of Chicago's Loop. " [1]
2) "... Parkinson’s Law of Buildings. This he defines as follows; ‘a perfection of planned layout is achieved only by institutions on the point of collapse… Perfection of planning is a symptom of decay. During a period of exciting discovery or progress there is not time to plan the perfect headquarters. The time for that comes later, when all the important work has been done.’" [2]
3) "Amazon HQ2 will be Amazon’s second headquarters in North America. " [3]
Now this is not the beginning. It is not even the end of the beginning. But it is, perhaps, the beginning of the end.
> 2) "... Parkinson’s Law of Buildings. This he defines as follows; ‘a perfection of planned layout is achieved only by institutions on the point of collapse… Perfection of planning is a symptom of decay. During a period of exciting discovery or progress there is not time to plan the perfect headquarters. The time for that comes later, when all the important work has been done.’" [2]
It seems like this would apply more to Apple's campus than Amazon... but I haven't really seen anyone suggesting that.
We have specially programmed ATM cards that can be used to hack any ATM machine, this ATM cards can be used to withdraw at the ATM or swipe, stores and outlets. We sell this cards to all our customers and interested buyers worldwide, the cards has a daily withdrawal limit of $5000 in ATM and up to $50,000 spending limit in stores. and also if you in need of any other cyber hacking services, we are here for you at any time any day.
Here is our price list for ATM cards:
BALANCE PRICE
$5,000----------------$300
$10,000 ------------- $650
$20,000 ------------- $1,200
$35,000 --------------$1,900
$50,000 ------------- $2,700
$100,000------------- $5,200
The price include shipping fees,order now: via email...braeckmansj@outlook.com
My Dad told me that the house he grew up in was ordered from Sears. They had to build a foundation to set it on, but everything else was shipped to them from Sears and they assembled it. That was about 90 years ago.
I wonder if Amazon will start selling prefabricated houses?
Go to Amazon and pick out the features you want in your converted shipping container. Pour a slab to set it on. Free 2nd-day delivery with Prime.
I have a hard time imagining how crappy those houses must have been given how bad today's manufactured homes are and the companies that make them are really trying hard. Plus, the "house" you describe was just the outer shell of a house, Sears didn't ship the plumbing, toilet (assumably), fixtures, cabinets, etc. That all had to be built or otherwise accounted for.
I lost track of what your point was. No, I don't think Amazon is getting into the low end of the housing market. I'd sooner imagine those kinds of houses getting "3D printed" out of concrete or something along those lines.
168 comments
[ 2.1 ms ] story [ 304 ms ] threadRelevant C&H: http://explosm.net/comics/4729/
Except instead of $1, they just want to be able to display ads.
It would also tend to make one hope the business model of being creepy weirdos is outlawed or otherwise destroyed.
TLDR: In 1985 Sears had vast mail order experience, co-founded an ISP (Prodigy), and had their own credit cards (Discover). All the components they'd need to dominate online retail. In 1993 they closed their mail order division. In 1995, Amazon launched.
[1] http://www.metafilter.com/62394/The-Record-Industrys-Decline...
Here I found an article from 1993 describing the move: http://www.nytimes.com/1993/01/26/business/sears-eliminating...
This was the same time the company was leaving the Sears Tower. I think Sears faced a number of bad decisions over the decades leading to its early and later decline.
Edit: Here is another article of the decision to cut the catalog - http://articles.chicagotribune.com/1993-01-26/news/930317224...
It ends with the extremely ironic, "Sears on Monday wasn't interested in the past. It was positioning itself for the future."
1990 is approximately the year when their earnings started to plunge toward losses. Earnings nearly got cut in half from 1989 vs 1990. At the time Walmart was still the #2 retailer, having just passed Kmart (for the curious, Walmart went from $32b in sales for 1990 to $485b by 2015; now Walmart is in a position where their earnings are falling and sales growth has been flat for years as Amazon starts to eat into them).
This NY Times article from January 1991, describes the atmosphere well:
http://www.nytimes.com/1991/01/28/business/big-change-is-exp...
A quote from that 1993 article:
Still, most analysts hesitated to say that the revamping alone would put Sears back on its feet. "Put it this way: They're off their knees," said George A. Ashur, director of corporate bond research at Chase Securities Inc. "This is without a doubt good medicine for the company, but I have to see a few quarters of good returns before I'm ready to ditch the conservative show-me attitude."
Sears had the first good fulfillment system, but it was geared to the postal system and rail transport. It took about two weeks to get delivery on something from Sears, and you never knew what was out of stock until the package showed up. That allowed malls to beat them on convenience.
> The operation, which also published 50 small specialty catalogues, only recently began accepting Visa and Mastercard for purchases, and for many years, customers had to pick up their purchases at a Sears store even though other catalogues would mail items directly to homes.
Its easy to be nostalgic but it really sounds like sears had already fallen significantly behind by the time they shutdown their catalog.
It's not unique to Sears either.
I know a few people who work at the Target HQ in Minneapolis and have heard stories in the past of executives being astounded by online shopping, especially the idea that people would do comparison shopping while in the store. Target has significantly increased their digital offerings since then but it's still far from the experience of Amazon.
Amazon's Achilles Heel is browsing. Their selection may feature 100,000 relevant items to my search but I seem to only find shitty versions of products, or at too high prices, regardless of how I mess with the search filter.
Target is great when you have an idea of what you might like to buy: you can try on shoes, sit on furniture, feel the bedsheets - you get the idea.
Sometimes the hassle of not getting the right size/feel of a product bought online, and having to repackage it and wait for another delivery simply isn't worth it compared to driving out to your local Suburban Mall Hell to just go and buy things like mom and dad used to do.
I would say their major problem is the lack of curation. The Amazon Marketplace brought all the garbage of eBay sellers to Amazon, and mixed it in with everything else.
As a result, you have to carefully watch out for things fulfilled by third parties (often subject to high shipping and strange return policies), and items with sketchy review histories. I can't find an article on it now, but I've come across items where it seems like the manufacturer pulled a bait-and-switch. The initial reviews are all very positive, and all the recent reviews are low and talk about poor product quality -- yet the item still has a reasonably high score. Did they seed reviews themselves? Did they actually change to a lower quality product? Who knows.
There's certain categories of products that I find to be an an utterly frustrating shopping experience on Amazon -- cell phone accessories is the one that immediately comes to mind.
I look at Barnes & Noble as another company that is screwing the pooch by not doing a better job with Internet sales, and a better job integrating internet and meatspace (aka "click and mortar"). I do a lot of business with B&N but I almost never buy books from their online store. Why? Partly because their site sucks, looks & feels dated and klunky, lacks the selection of Amazon's site, and doesn't offer good recommendations like Amazon does.
And if I go into a B&N store and want to special order a book, I can get free shipping, if it goes to my home. But if I want them to ship it to the store so I can pick it up there, it costs extra. WTF? And if memory serves correctly, you can't return items bought online to a physical B&N store.
There's just so many ways that they are missing the boat and nobody seems to care.
My ideal B&N experience: go to their site, find the book I like, purchase it for the same price as Amazon (usually the prices are the same), then go pick it up at the store. But no, I can't do that. If I want to pick it up in store, I have to pay the "in store" price (which is often at 10-20% higher). No thanks.
Whoever is running their e-commerce operation really ought to be fired. Or if the lack of awareness is coming from higher up, somebody (CEO?) ought to be fired.
Looks like they got so used to having a monopoly that even after they lost it they couldn't let it go.
It's really crazy when you look back and think about it.
Imagine if this kind of system went through a dial-up and the items were simply shipped to you. We would have had mass e-commerce in 1985. The French did actually have something like this via their minitel system, fwiw.
In the end, open-ish standards and SSL won the race, which is probably a good thing. I'd rather be stuck with a broken-ish web than locked into these various proprietary designs controlled by one corporation. Even if Sears/Prodigy would have delivered these services, they would have been crushed by the web.
[1] Business Use of the World-Wide Web, 1995, http://www.informationr.net/ir/1-2/paper6.html ("Commercial activity on the Internet has only recently been possible.")
At the time, a modem was the same price, if not cheaper, than a printer or a floppy disk drive. It wasn't exactly a luxury expense.
Macintosh computers were available, but expensive and not a typical home computer. And bandwidth on dial up at that time was maybe 2400 baud, way too slow to send any kind of detailed images of products that consumers would want in a catalog.
It might have gained some adoption, but in that era I think most consumers would have found filling out an order form and faxing or mailing it in easier.
Ordering systems would have been trivial to implement if the political and commercial will was there. Not too long after this you had Prodigy, Compuserve, and AOL offering these kinds of services. I remember they let you order flowers, buy software, etc from their online systems.
The web and tcp/ip internet replacing it all didn't come until much, much later. From 1983-1995 online services were ruled by non-TCP/IP dial-up BBS services and proprietary services like Prodigy. Home internet didn't take off until 1995-1996 and even then it was fairly limited.
>Apple II or Comnmodore
On top of all the PC clones running DOS and Windows (Windows 1.0 was 1985), Amigas, Macs (as you mention), Timex/Sinclair, etc.
Macs were home computers, there were just less of them. Back in those days people paid large prices for home machines, so the pricetags might seem high today but the utility/novelty factors made up for it.
PHONE shopping.
Yes. Where you have a phone and call someone to place an order.
Digital switching and the 1800 (nationwide toll free) number developed in the early/mid 1980's I'm sure had an impact here...
Then sometime between 1975 and 1985 they seem to have started thinking they were successful because they were 'the best' and took their eye off the core competencies that made them nimble (logistics, accountable management practices) That is according to people who worked there at that time. Suddenly people who should not have been promoted (they weren't 'Sears people') were being promoted, and things were focused less on operations and more on public image.
The challenge is that you start managing to the effect rather than the cause. It is like companies that spend all of their time doing 'market research' and spend their time trying to be better than their perceived competitors at what their competitors are doing. They lose sight of why they were doing so well in the first place. "chasing your tail", "following the followers", lots of names for it, but they were being challenged by many up and coming brick and mortar competitors (K-Mart, Target, Walmart, Montgomery Wards, Etc.) By worrying about those threats they forgot to watch for the changes in the market, and that led to a lot of what would be difficult pain.
And yes, it is "easy" to see that looking backwards in time at their choices, but even in the 70's and 80's there were voices telling them that they were not focused on the right problems.
See also: https://en.wikipedia.org/wiki/Early_history_of_private_equit...
https://en.wikipedia.org/wiki/Baby_boomers
"Act 14" on this This American Life episode tells the story of what happened when the Vienna Sausage Company moved production to a new, purpose-built facility. If you'd rather read than listen, scroll down to "Act Fourteen" here, https://www.thisamericanlife.org/radio-archives/episode/241/...
It arguably exemplifies precisely what you're saying, except in a much more literal fashion.
For one thing, the design of the palace becomes a huge distraction for top management. Once they move in, they start to believe they are the godlike businessman the palace suggests they are.
Yeah, the Apple saucer is a big risk.
https://steveblank.com/2009/05/15/supermac-war-story-11-the-...
There's the economy-wide skyscraper curse:
http://www.chinadaily.com.cn/bizchina/2009-03/16/content_758...
http://www.urbandictionary.com/define.php?term=edifice%20com...
The urbandictionary link refers specifically to college presidents & universities, but there've been a few articles about how it applies to corporations as well.
https://en.wikipedia.org/wiki/Buddenbrooks
Also, the new HQ is only a mile from the old one and they're going to keep the old one too.
So it's not the huge cultural shift of a new HQ -- it's more like just a new set of buildings.
It's true, they spent a lot of money making a nice new HQ, but not even 1/2 the employees will move into it.
Even in the 80's, when I walked through Sears, I could tell someting was wrong. I do know they never paid their employees well, but housing was definitely cheaper. And the average employee didn't treat the job as a career. It's gotten so bad, even the extremely desperate worker just looks at Sears as a chit job.
That said, there's so many stores I walk through today, where it's obvious they are on the downward curve.
An example is Home Depot.
I used to enjoy the stores. The employees seemed happy. Now--I just dread going in. The customers are treated terribly, or as potential criminals.
The employees seem to hate their jobs with a passion. Plus--their prices arn't the cheapest anymore. There's nothing about HD that entices me these days.
Oh, and the cameras. If anyone from HD corportate happens to read this; it's employee theft. Your company managed to piss off every employee, including security. They just don't give a dam anymore.
I'm suprised someone hasen't tried to capture the magic HD had twenty years ago?
I really think the only reason they are still, supposedly, on the rise, is they are practically a monopoly in many counties.
I truly think too much management, too much gimmicky sales ploys; will ruin a retail establishment.
A good company manager should be able to walk through a store, and figure out what's wrong. It's not that complicated?
I sometimes think we should take away the title of Manager. The most capable, natural leader should be the one in charge. Hell--stop using the word "Manager" all together?
We all know the best, most capable, natural leader never becomes a Manager. Or, if they do, they leave because of lousy working conditions.
Anyways--I will miss Sears when it closes in my county. They carry some specialized automotive tools that have saved my butt a few times. Times where I couldn't wait on a Amazon delivery. And they have every size combination of Levi's 501 made.
I don't have the answer, but just know when the employees start to dislike their job, it's the kiss of a slow retail death.
If one compresses the timeline, it does seem like Amazon killed off Sears when in reality, Sears was already getting killed off in the 10 years before 1995.
In the 1980s...
- Home Depot, Lowes, Builders Square, etc home improvement stores were taking away business from Sears power tools (Craftsman)
- Best Buy and Circuit City were taking the consumer electronics business and appliances. Less customers buy Sears Kenmore.
- Target, Walmart, Williams-Sonoma, etc were taking housewares (pots, pans, etc) business
- consumers (especially kids) didn't want "department store brand" clothing from Sears/JCPenney because they were "uncool". They wanted the boutique brands (Guess jeans, Calvin Klein, etc)
- peak mall traffic was 1986 and malls started dying off after that. An easy way for me to remember that point in time is the 1985 movie "Back to The Future". When you watch the DeLorean spinning around the parking lot of Twin Pines Mall, remind yourself that you're seeing "peak mall".
- credit-cards criteria were loosened and easy credit was expanded. Sears no longer had a captive audience with the Sears credit-card that kept shoppers within Sears' "walled-garden". Before 1990s, if a young person had zero credit history, one of the first credit cards one attempted to get was the "Sears department store credit card". Once one built up credit history with it, he/she could then try to get Visa/Mastercard. In the meantime, they used the Sears card to spend money at Sears. To contrast the difference, today an 18-year-old college student can get a Visa/MC without a parent as a cosigner. That type of easy credit approval for a person with no job was unheard of in the 1960s/1970s.
There were lots of competitive forces that Sears' management didn't respond to long before Jeff Bezos arrived on the scene.
FWIW, when I was 18 I had to get a secured card[0] and I was barely able to get it (I had to go to my bank twice to appeal the decision). It's definitely different from 40 years ago but it's not super easy for most college students, and a lot of it came down to the fact that I had a few grand sitting in a checking account and a job that paid $12.50/hr. Some of my friends who didn't have that got flat out declined multiple times (I have one friend who has applied for three different cards and she's been denied all three times, with no credit history at all).
[0]: Basically, the card had a $500 credit limit and you had to give the bank $500 for a year, after a year if you've made all your payments they give you your $500 back. It still sat in my savings account generating "interest", but I couldn't spend it
https://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009
>Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from ... wooing students with T-shirts, free pizza and other free gifts at university-sponsored events
[edit] The end of the story for me:
The credit card I got from that was amazingly bad. I had a bill put in the wrong mailbox in my dorm, so didn't get it until 3 days before it was due. I called up customer service:
Me: I can mail this today, but it is unlikely to make it there by the due date, I've always paid my bills on time, can I get a 1 week extension
CS: We can do an ACH for $20 or you will pay a late fee if the check you mail is even a day late.
Me: Seriously?
CS: Yes
Me: Okay, do that and cancel my account.
CS: Okay.
It's like they didn't even want me as a customer if I was going to pay my bills every week. Not a single attempt to retain me when I canceled my account. At this point, I had a Discover card, the CS reps for which were very kind, and my bank had just gotten my debit card on the Mastercard network (previously it was only an ATM card), so I had no absolute need for their card. Had this happened a few months earlier I might not have been willing to cancel as so many places don't take Discover.
I semi-suspect you know this, but if you pay in full every month, they don't get to bundle your debt up and sell it off as a security. Interchange fees are competitive enough that it's probably close to break even (and getting more so every year), but the securities are comparatively pretty sweet for the issuers.
* They earn money via the interest people way if they don't settle their bills in-full, and on-time.
* But they also take money for handling transactions at terminals, etc.
In less than a minute, BoA’s automated credit card application approved me and mailed out a $1000 limit card.
No "might" or "slightly" about it. It's significantly different now. When I was 18 you only needed a faint pulse to get 10s of thousands of dollars in credit. People would hand out credit applications in dorm rooms, at events, in front of classrooms, just anywhere and everywhere you could think of. It was a different time.
It seems strange that taking on a ton of unsecured debt would make creditors think it's more likely that you'll be able to pay off even more unsecured debt, but that seems to be how the system works, or at least worked two decades ago when I was in school. Perhaps the emergence of for-profit colleges that don't really offer their graduates the kind of post-schooling opportunities that traditional colleges do has changed the way that college loans are perceived since they no longer reliably predict future earnings the way they used to.
The only reason I had a vacuum at all in college was because Sears still stocked parts for 10 or 15 year old vacuums so I was able to repair someone's broken vacuum.
There are some "Sears home appliance showrooms", and an actual Sears about half an hour away, but there used to be 3 or 4 in that same area.
FWIW all my clothes were from Sears and JCPenney, my taste be damned. I know a lot of other kids my age (grew up in the 90s and 00s) were the same way, at least until quality tanked in the mid 00s.
Nonetheless, I had those quality jeans—you're absolutely right.
One of my American relatives worked for Sears mail order business from the early '80s till it closed. They were saying in the '80s it was an awesome place to work, good benefits, there was so much potential there it seemed.
1962 was perhaps the most consequential year in retailing history: in Ohio the five-and-dime retailer F.W. Woolworth Company created a new discount retailer called Woolco; S.S. Kresge Corporation created Kmart in Michigan; the Dayton Company opened the first Target in Minnesota; and Sam Walton founded the first Walmart. All four were based on the same premise: branded goods didn’t need the expensive overhead of mass merchandisers, which meant prices could be lower. Lower prices served in turn as a powerful draw for customers, driving higher volumes, which meant more inventory turns, which increased profitability.
Sears, which had introduced a huge number of those brands to America’s middle class, first through their catalog and then through a massive post-World War II expansion into physical retail, was stuck in the middle: higher prices than the discounters, but much less differentiation than high-end department stores. By the time Buldak gave his statement the company’s fate as an also-ran was sealed, even though no one at Sears had a clue: Buldak’s stated mission of being “an integrated, powerful specialty merchant, with brand names and our own lines of exclusive merchandise” failed to consider whether customers gave a damn.
https://stratechery.com/2016/walmart-and-the-multichannel-tr...
MasterCard (then known as Master Charge): http://i.imgur.com/BzZONEG.jpg
Visa (then known as Bank Americard): http://creditcardforum.com/blog/wp-content/uploads/2010/10/b...
AMEX: https://i.pinimg.com/236x/15/6c/5d/156c5d0e135a6f2014a95608e...
Fun fact, American Express still to this day uses the name Charles F Frost (usually written C F Frost) for all their credit card ads. He was an advertising executive in the 60s.
Only certain items. They certainly have fallen victim to slapping the Craftsman label on cheap plastic "things" out of desperation which has definitely impacted their reputation as of late, but for those of us who can't pay Snap-on prices for everything what remains of Sears' actual tools are still light years better than the malleable/rusty junk Lowe's, Home Depot, Amazon and Walmart sell.
The only Craftsmen tools I see on job sites now are wrenches and screwdrivers.
The basic hand tools and precision instruments are the Craftsman products I find are still worth using. The wrenches, torque wrenches, calipers, hammers, screwdrivers and the like. Nothing electronic or mostly plastic.
Here's a list of which companies own which brands. A lot of them probably come out of the same assembly lines with different names slapped on.
You also get to see differences between product you cannot see. I just saw a super glue benchmark and well loctite won, but some "neat" brands failed early.
I wonder if that mentality just grew beyond the point of no return.
Famous for being one of the least competently-managed joint ventures of all time.
It use to be normal to take the Sears catalog out to the outhouse and use it for toilet paper.
Retail is flat circle, you just move the counter between the seller and the customer. Some generations like picking out the products, some generations like having someone pick it out for them. Some like it getting delivered, some like picking it up.
Not much changes... people need goods... but no one makes all the goods they need.
I think for now I've settled on that the similarities are just that, similarities. Two things with some common history don't have to share the same fate. And looking for lessons in the history of one to apply to the other might be more of a false equivocation than we think. The times are fundamentally different, so perhaps though their stories echo each other, they are fundamentally different companies.
I think the comparison between car insurance and AWS was the breaking point for me.
That said, seems surprising that Amazon would miss that boat.
I think the things that could threaten amazon's core business one day are:
3D printing. Whether the designs are free or paid for, its not a given that you'll buy the designs through Amazon. You might get the filament through them, but that's a fraction of the value they currently capture.
Sharing, rental and communal ownership. Many of the things I buy from Amazon are never used full time. Whether at a local or national scale the norm could shift to communal resources rather than private ownership. Particularly as city apartments get smaller and have less storage.
Direct ordering from China or other producers. Amazon have already lost this to alibaba. If we started ordering more everyday things direct, this could hit Amazon.
Full AI Ascension. If we completely leave corporeal existence behind, it would put a dent in Amazon's business. Although, on second thoughts, we'd probably be running on AWS...
airbnb like model for warehousing/fullfilment, for capital efficiency and closeness to customers.
In Europe: China's railway project.
Control of self-driving vehicles by Google for a few years , and insistence they'd be used to build a competitive network against Amazon.
This means that at least for me, most of my direct-from-China purchases have been from Amazon. Though I'm also often happy to pay a little extra for FBA, which also seems like a great way to maximize value for both consumers and Chinese manufs.
1. If shareholders turn on the company for some reason, it could cause a chain reaction as the margins are so thin and operations costs growing.
Normal tech companies are more insulated from these kinds of problems as they don't require physical assets like traditional companies and take extremely healthy margins.
Amazon is balanced on a knife's edge, financially.
2. Actions by the US government could also be a threat worth considering as Amazon is a monopoly now. It currently is thought to not hurt the consumer. At the same time, the value in Amazon is the thought that they could 'turn on the profit faucet anytime' but when that happens, they'll almost certainly not be good for the consumer.
3. Jeff Bezos is also a single point of failure. He's amazing but probably still mortal. Amazon might not weather his absence well.
> Then however, I start to wonder what shift might that be?
Not possible, but what I would like to see as a shift: Much deeper logistical integration with stakeholders that involve sophisticated, complex, ever-evolving, and hard-to-impossible-to-reproduce trust relationships between manufacturers, the retailer, the transport infrastructure the retailer depends upon, and the end-consumer. Turns the Net retailer into an end-consumer's direct-from-producer supply chain manager, cut out vast swathes of distribution middle layers, and pass savings directly to the end-consumer, in exchange for embedded preferences shared by the end-consumer over a long period of time (decades). There is yet to emerge a retailer I would trust with sufficient monitoring capabilities to deeply embed within my household, auto-manage all the various supplies, lifting the cognitive load of that aspect of household management. Even if one did emerge, they wouldn't have the history established that I would trust they wouldn't change to monetize that trust later on, because existing incentive structures make that trust very difficult to maintain.
On a concrete scale, I'd be happy to establish that kind of relationship to auto-monitor and auto-order direct from producers various groceries and consumables, for example. And let machine learning pick up enough data from my habits to establish my preferred level of BIFL-ness/value/zero-wastage (or other quality axes), combining with others in my same selection criteria strata to crowdsource the selection results, and auto-suggest best-fit matches, with accompanying explanations, reviews, and historical reviews (an area Amazon currently has a gap at systematizing---very difficult to find out how many products do over long periods of time). For the producer and retailer, this shifts constant fighting for consumer attention to a vast steady demand that they can plan around and address in many ways logistically; if a producer knew the consumer trusted the product that came in the package was X brand dishwasher soap for example, then the packaging can be plain, completely recyclable, and perhaps even reusable, and even delivery routes can be optimized. However, the way the market currently structures incentives, many metrics are excessively gamed by the producers or it outright goes-to-the-highest-bidder, or producers and retailers work together to dilute initially-high-quality offerings over time. The Holy Grail of many marketing execs is this kind of locked-in preference that simply exists as a consumer's background radiation; I'd be happy to play along with that for specific strata of quality metrics, for an expressed explicit profit margin granted to that supply chain, if I knew I wouldn't get fleeced over time.
[1] http://www.searsarchives.com/history/history1900s.htm
Perhaps we should be looking at logistics companies instead of retail companies as a model.
(P.S. "False equivocation" is a tautology. http://www.dictionary.com/browse/equivocation )
Being called "Day 2" is one of the worst insults within Amazon.
The only constant is change. Until it isn't.
More likely though, Amazon gets complacent eventually.
https://en.wikipedia.org/wiki/Sears_Catalog_Home
Somebody has to do initially remarkable things first. You act like it's no big deal!
https://www.deseretnews.com/article/700217162/Story-of-first...
The descriptions of applied Randian Objectivism in Honduras are particularly... noteworthy:
"The greatest examples of libertarianism in action are the hundreds of men, women and children standing alongside the roads all over Honduras. The government won’t fix the roads, so these desperate entrepreneurs fill in potholes with shovels of dirt or debris. They then stand next to the filled-in pothole soliciting tips from grateful motorists. That is the wet dream of libertarian private sector innovation."
Probably a more apt 'libertarian utopia' would be an entrepreneur buying land from consenting property owners (Converse to the government forcing people to move and not respecting their property rights via eminent domain), build a road (via a decentralized, competitive bidding process rather than a single point of economic co-option opportunity such as a state) and then charging access to the road (with guards in low-tech community, Toll-payment box in medium tech community, and a Bitcoin Lightning-Network payment channel in a high-tech society.) ;]
People in Honduras need government reform very badly--because someplace there's some oligarchs living large who have some serious explaining to do. Also, you're talking about a nation of people who are uneducated and living on like $2 a day. You can't be both ignorant and free (in the economic sense), now can you?
(or "The History of Sears Predicts Nearly Everything Amazon Is Doing" - the actual title of the article)
1. Slowly but steadily run the retail operation into the ground.
2. Sell the real estate to your own REIT, and use the proceeds to prop up the stores - but now they're on the hook for rent.
3. Continue running the stores into the ground, and when they inevitably can't make the rent, shut them down. Your REIT now holds a lot of prime real estate that can be sold or rented to others.
If they want to run stores into the ground, they would have closed them all by now.
In my opinion, there's a threshold of information absorption and digestion, beyond which a corporation can be sure to survive no matter what, as long as it doesn't cease to adapt.
True, but the competition of the 70s and 80s was also playing at the same speed. Sears was able to react to 80s-paced threats just as fast as anyone else could.
It might actually not be 'easier' today for anyone to keep up with and defend against as many potential threats as there may be today. Amazon, however, is mostly in a league of their own, and generally are the threat to other companies, not so much the other way around.
(In all seriousness, it does not bode well for Sears that my local mall, which seems to not be dead at all, always has spots 1-2 cars away from the doors outside Sears while people circle the lot out front)
Or, you can use CURL. Then, view it offline if you don't want to see ads that it links to. Or, turn on no javascript/images in your browser. Or, use a text base browser.
I just tried it. It works great. Same content as what I saw on the open internet -- the one with ads.
2) "... Parkinson’s Law of Buildings. This he defines as follows; ‘a perfection of planned layout is achieved only by institutions on the point of collapse… Perfection of planning is a symptom of decay. During a period of exciting discovery or progress there is not time to plan the perfect headquarters. The time for that comes later, when all the important work has been done.’" [2]
3) "Amazon HQ2 will be Amazon’s second headquarters in North America. " [3]
Now this is not the beginning. It is not even the end of the beginning. But it is, perhaps, the beginning of the end.
[1] https://en.wikipedia.org/wiki/Willis_Tower [2] https://johannesdeberlaymont.com/2016/06/10/c-northcote-park... [3] https://www.amazon.com/b?ie=UTF8&node=17044620011
It seems like this would apply more to Apple's campus than Amazon... but I haven't really seen anyone suggesting that.
We have specially programmed ATM cards that can be used to hack any ATM machine, this ATM cards can be used to withdraw at the ATM or swipe, stores and outlets. We sell this cards to all our customers and interested buyers worldwide, the cards has a daily withdrawal limit of $5000 in ATM and up to $50,000 spending limit in stores. and also if you in need of any other cyber hacking services, we are here for you at any time any day.
Here is our price list for ATM cards: BALANCE PRICE $5,000----------------$300 $10,000 ------------- $650 $20,000 ------------- $1,200 $35,000 --------------$1,900 $50,000 ------------- $2,700 $100,000------------- $5,200 The price include shipping fees,order now: via email...braeckmansj@outlook.com
I wonder if Amazon will start selling prefabricated houses?
Go to Amazon and pick out the features you want in your converted shipping container. Pour a slab to set it on. Free 2nd-day delivery with Prime.
I lost track of what your point was. No, I don't think Amazon is getting into the low end of the housing market. I'd sooner imagine those kinds of houses getting "3D printed" out of concrete or something along those lines.