The American company Sears, was recently approved to liquidate all its remaining 130 Canadian stores, employing over 12,000 (Press, 2017). The once retail giant has been crippled in recent years by the rise of companies like Amazon and Walmart (Shaw, 2017). Sears at its peak in the late 1960’s and early 1970’s offered consumers fairly priced home goods that could be shipped to your home (Floyd, 2017). Sears value proposition of convenient home shopping was for the most part wildly successful, and the company even attempted to get ahead of the tech crave. In 1984, in partnership with IBM, Sears launched a pre-web private network Prodigy that offered games, shopping, and email(Floyd, 2017). They put nearly a billion dollars into Prodigy, and ended up selling it in 1996 for 250 million (Floyd, 2017). The failure of prodigy was a large reason of why Sears struggled mightily when it went online (Floyd, 2017). The once retail giant faced a crisis in the mid-2000’s as up and comers such as Amazon, Costco and particularly Walmart began to take market share from Sears (Shaw, 2017). These companies offered similar great services, low prices, but with more innovative products and more convenience (Shaw, 2017). In 2005, Amazon’s only accounted for 17% of Sears, but by 2011 Amazon had surpassed sears in sales, and by 2013 had doubled(Floyd, 2017). While sears value proposition was geared for the late 20th century, it failed to adjust f to the increasingly technology-based market.
Sears is an example of a company that became too comfortable in a wildly competitive market. Sears was perfectly geared for the 19th century, as they were largely alone in the convenience based home shopping business. However, their unsuccessful and too early entry to the tech-based shopping industry with prodigy, and reluctance to join the E-commerce marketplace orchestrated their demise. Their failure to adapt to the new marketplace allowed companies to steal market share and take over the business sears once dominated. While their value proposition remained relevant and effective, other businesses managed to deliver it more effectively.
Word Count: 330
Works Cited:
Dangerfield, K. (2017, October 13). Sears Canada: The rise and fall of the department store empire. Retrieved October 15, 2017, from https://globalnews.ca/news/3796409/sears-canada-history/
Floyd, D. (2017, June 12). Who Killed Sears? 50 Years on the Road to Ruin. Retrieved October 15, 2017, from http://www.investopedia.com/news/downfall-of-sears/
Press, T. C. (2017, October 13). Small cities and their malls brace for pending Sears store closures. Retrieved October 15, 2017, from http://www.cbc.ca/news/business/sears-closures-impact-small-communities-1.4353011
Shaw, H. (2017, October 11). ‘Following the Eaton’s death spiral’ Sears to end 65 years of retail history. Retrieved October 15, 2017, from http://business.financialpost.com/news/retail-marketing/brief-sears-canada-to-seek-court-approval-for-liquidation