[PLUG-TALK] Sears doomed

Ronald Chmara ronabop at gmail.com
Sat Jun 2 14:53:22 PDT 2018


On Fri, Jun 1, 2018 at 11:45 AM, Aaron Burt <aaron at bavariati.org> wrote:

> On 2018-06-01 11:02, Rich Shepard wrote:
> <snip>
>
>>   JC Penny is in the same leaky boat.
>>
>>   The large, nationwide brick-and-mortar (or cinderblock) retailers didn't
>> respond to the likes of Amazon so it's not surprising that they're on the
>> close-out rack.
>>
>
> Sears was built on mail-order, and prospered on the spread and
> decentralization of America.  The storefronts were originally an adjunct to
> the core catalog-sales operation.
>
> I remember when Sears abruptly shut down its catalog operation and the
> distribution warehouse in Seattle.  It was one year before the founding of
> Amazon.
>
> Oops.
>

Amazon famously (perhaps infamously) "lost" money for decades (it's a 24
year "overnight success"), because their company was about growth first,
and profit second. They could have put more profits into owner (later
shareholder) pockets,, but instead they put huge amounts of resources into
self-investing, and building and buying things. Some crappy things, some
fabulous things, but always with an eye towards growth first, profits and
stability later.

Sears was "established", "stable", and wanted to be seen as "reliable".
There were not a lot of perceived risks in buying their products, (or their
stock), because they weren't taking risks, they were "sticking to the
things they knew well", "focusing on core products and services", "not
getting distracted", and in the 1990's, this kind of thinking was
management mantras (see also: "Nobody ever got fired for buying IBM").

I still hear echos of that thinking in established businesses today, and it
has short term merits, but without wild-eyed and crazy ideas ("What if an
internet bookstore started selling everything, including their spare
computing cycles?", "What if a tired computer company made portable music
players?", "What if we opened our college yearbook software to everybody,
not just students?", "What if we made a marginally better way of looking
for websites?"), companies atrophy, and decline, or get consumed by those
who are taking the weird and unreliable risks. Companies that do take risks
either because they *have* to, or have nothing to lose, manage to survive,
or thrive (or die in utter messes), based on their risks.
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