Sears Roebuck and Company was an American retail icon. The Sears catalog was the predecessor to online shopping. In 1893, Sears was selling everything under the sun in its catalog. The company was generating $400,000 in sales in 1894, and in 1896 Sears catalog sales were more than $750,000. The executives of the company knew they had a tiger by the tail, so going public in 1906 wasn’t a surprise. Sears began building their brick and mortar empire in the 1920s and by the 1950s, Sears was a retail superstar.
Sears was the king of the retail jungle in the 1960s. But like all kings, time and mismanagement put the company on life support. Sears is on the verge of going belly-up in this new age of retailing. Sears is no match for Amazon. Brick and mortar stores are expensive dinosaurs in the 21st-century. Sears is going to be the first retail dinosaur to reach extinction, according to retail analysts. The analysts say Sears did not react fast enough to the ever changing retail market.
But Sears is not the only retailer on the chopping block. J. C. Penny is hanging on by an investment thread, and the largest shoe retailer in the country, Payless Shoe Source is heading in the wrong direction too. Macy’s, Dillard’s, and Kohl’s are still consumer favorites, but no one is sure how long they will stay relevant in a retail environment that has no need for brick and mortar locations. This is the age on drone deliveries and overnight shipping. And instead of spending a day at the mall, consumers are shopping online thanks to super marketing schemes and daily price promotions.
The retail figures don’t lie. Wall Street is losing confidence in brick and mortar retailers because second quarter results continue to disappoint investors. It takes a lot of money to keep inventory levels where they should be, and it takes more money to mark down the inventory that doesn’t sell.
J. C. Penny and the other big retailers may be on life support, but they may still have five or ten years before that life-support ends. In order to survive, these retailers must reinvent sales strategies, inventory management controls, and marketing plans. But old habits die hard, and the old retailers have a lot of bad habits to address. Being a big retailer with lots of locations used to be the way to generate profits, but today, most of those locations only generate losses.