Have you ever heard of Sears? If you haven’t, then you are essentially saying that you have never heard of the largest retailer in the 20th century; and that is not your fault. For the ones that do remember Sears and their phonebook sized catalogues that come to your door, will know that their popularity has gone far down as of recent years. If you’re wondering what happened to this 125-year-old titan company, the answer is quite simple; digitalization.
E-commerce has been on the rise ever since the turn of the 21st century. Yearly growths of approximately 15% led to ecommerce accounting for 13% of all retail sales in the U.S. The importance of an online presence has never been higher and will only continue to grow. So, did Sears fail to adapt to the digital age, or did it just start to adapt too late? Unfortunately for Sears, it appears their faults lay in both aspects.
It wasn’t until 2015, when Sears had already lost a whopping 96% of its value, where they announced they were going to institute an “integrated retail service”, or in less fancy terms, an online store. To put this in perspective, Amazon was already earning over 100 billion in revenue at this time. Then, looking at their actual digital tools such as their website, the app, online loyalty programs, and other digital tools, they all fall flat as well. The app, which is similar to the website in terms of functionality, had 1.5 stars in the iOS app store. Their online loyalty program showed promise, however with the overall lack of digital presence, made only a small dent. In sum, their overall digital tools failed to attract shoppers and as such, have pushed them to the point of bankruptcy.
Digital technologies have a larger influence on industries than ever before, and Sears is a perfect example of what can happen when you fall behind and poorly implement these tools. On the other end of the spectrum, companies such as Wal-Mart, Target, and Kohl’s, show that it is possible to stand up to companies such as Amazon, and be successful. This is only one example of a company falling to the inability of keeping up with digitalization, and many companies are taking note. Companies such as Facebook, Google, and many more are doing everything they can to stay ahead in their field by, for example, investing into technologies such as AI, which is believed to be another revolutionizing technology of the future. The era of digitalization presents a sea of opportunity together with dangers for existing companies and must be prepared for accordingly.
Author: 430863js
References
Albanese, J. (2018). How Sears and Macy’s Are Transitioning into an Improved Digital Strategy | Centric Digital. Retrieved from https://centricdigital.com/blog/digital-strategy/how-sears-and-macys-are-transitioning-into-an-improved-digital-strategy/
Ali, F. (2018). A decade in review: E‑commerce sales vs. retail sales for 2007-2017. Retrieved from https://www.digitalcommerce360.com/article/e-commerce-sales-retail-sales-ten-year-review/
Greenfield, M. (2018). Amazon: annual revenue 2017 | Statista. Retrieved from https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/
Sears tanked because the company failed to shift to digital. (2018). Retrieved from https://www.businessinsider.com/sears-tanked-because-the-company-failed-to-shift-to-digital-2016-8?international=true&r=US&IR=T
Zalubowski, D. (2018). Sears, once the world’s biggest retailer, now faces bankruptcy. Retrieved from https://www.nbcnews.com/business/business-news/125-year-old-sears-file-bankruptcy-report-n918446
