As Sears filed for bankruptcy in November this year and Amazon announced that it was going to choose two locations for the homes of its second headquarters, the two businesses could not seem any more different.
Sears did announce a partnership with Amazon in May, one of the many last-ditch efforts to save the company, as reported by USA Today. But it’s too late. Sears represents the crumbling past while Amazon is the future. But just over 100 years ago, Sears was a promising new business. As we look at what went wrong at Sears, we can see how Amazon can apply these success tactics and learn from failures.
Before Amazon was dubbed as “the Everything Store,” it exclusively sold books and put bookstores like Borders out of business. Sears started by selling watches and transitioned into the catalog business, seeking orders from Americans all over the country, particularly those in rural areas according to The Atlantic. The catalogs were something of a pre-internet internet: consumers could choose from a variety of selections and Sears would deliver the goods they wanted.
As Americans moved to live closer to each other, malls were built. Now, shopping is more convenient than ever and we prefer to shop online in the comfort of our own homes and get our purchases delivered in just a few days (thanks, Amazon). The catalogs and stores were right in step with trends of the time, but Sears missed a huge opportunity when business was starting to transfer to the internet.
Even the two companies’ strategies after initial success are similar: Sears offered Allstate car insurance in addition to its large auto parts business. Amazon acquired Whole Foods and created pop up shops in its efforts to work its way into brick and mortar industries. However, I believe that one of Sears’s largest mistakes were expanding too much and realizing too late that consumers were less interested in physical retailers.
After finding consumer interest was decreasing, Sears (like many other large retailers) had to shut down their operations, close stores and sell off classical brands as mentioned by the New York Times. Its stores are full of inventory, but not consumers who are interested in buying them. Its efforts to downsize in the past few years have not proved fruitful. Sears sold its Craftsman brand, but has found it difficult to sell others like the Kenmore appliance brand.
Another large part of Sears’s downfall is because it has failed to grasp the attention of younger consumers. Many teens still go to mall and more frequently shop at websites of many popular mall retailers, but Sears is not among them.
“Most younger shoppers don’t have Sears on their radar,” said Neil Saunders, managing director of retail consultancy GlobalData, “The brand is completely irrelevant to them.”
For Sears to actually revamp itself, it would need to completely overhaul its current marketing strategy and directly reach younger consumers by letting them know that Sears has brands that teens like. In fact, Sears has 13 out of 18 the most popular brands voted by teens in Piper Jaffray’s fall 2018 survey on their website, including Nike, Tarte Cosmetics, and Kate Spade.
However, these brands aren’t featured on their website homepage or recent ads and potential consumers wouldn’t know they sell these brands. Amazon, in that retrospect has marketed itself better to teenagers, such as starting Amazon Teen. However, only time will tell to see whether Amazon can continue to market itself to each new generation of young people. By doing so, I believe it can succeed where Sears failed.
As Amazon continues to be one of the largest leaders of the 21st century, it would be wise of them to consider the successes and missteps of Sears in the past 100 years.