Tuesday , April 24, 2018 - 5:00 AM1 comment
Friday of last week, the local Sears in the Newgate Mall closed. When I visited I could still see the outline of the five letters of “SEARS” as gray smudges on the side of the mall. I could see the empty interior through the milked-out glass doors. To the rear, a small cadre of employees — the last ones left to turn out the lights — scrapped the last of metal shelves and hangers and trashed the rest.
With the recent report that Utah outpaced the nation this year in employment, I assume some likelihood that the former employees will find jobs to replace the ones they have lost. I hope so. And, hopefully they will find jobs that offer the same level of camaraderie that one of Sears’ staff members had described to me.
This latest closing points to the difficulty of major retailers to operate profitably because of technological disruption and changes in consumer behavior. People shopping from home on websites such as Amazon have changed the market. Yet, it also seems ironic. It reminds us that in the 19th century when Americans first shopped from home using a catalog, Sears was the disruptive force. How did the purveyor of home shopping, the Amazon of its day, lose its preeminence and market share?
Alexander Hamilton noted in 1791 that four-fifths of Americans’ clothes were sewed at home. Tailors roamed the country creating clothing for the remaining one-fifth, essentially finer things. During the 19th century these specialists (including many new cloth-skilled immigrants) settled into the cities. Coupled with the invention of the sewing machine, the production of ready-made clothing for the upper-class increased.
Blue-collar workers took advantage of hand-me-down shops. Commentators of the time noted that chimney sweeps, horsemen, and other city dwellers working in dirty environments dressed quite well, much like upper-class people. Only farmers in the country wore “appropriate worker” clothing. By the end of the 19th century, ready-to-wear clothing and ready-made goods of all types became the norm for all classes.
Urbanites flocked to large department stores and later chains of particular stores. These places of consumption represented the future. They drove newspaper advertisements and thus newspaper fortunes. They were controlled by CEOs in the world’s tallest, most modern buildings of their time such as 1913’s 60-story Woolworth Tower and 1971’s 110-story Sears tower.
Isolated rural Americans sought to join the country’s progress and own the same variety of goods as their urban cousins. Montgomery Ward first addressed this need in 1871 with a single-sheet catalog for rural folks. Richard W. Sears took greater advantage of the newly expanding railroads. Starting in 1887 with a tiny catalog of watches, by 1895, he had issued a 532-page catalog that included everything from automobiles to kit houses.
In a move that mirrors the current move to expand rural access to better Internet speeds, farmers pushed the post office for better service. The cost of delivery changed from the receiver to the sender. “Rural Free Delivery” (RFD) – created direct delivery to all dwellings. As a result, local stores and small towns dried up, while rural America gained access to many previously unavailable wares.
Sears expanded into shopping centers in the 20th century as the suburbs grew. Interestingly, it ended its general merchandise catalog in 1993 because of falling mail-order profits just as a new means of reaching the consumer arrived. In 1993, Congress created incentives for the commercial internet. The following year, Jeff Bezos started selling books through Amazon. In the 1990s, Sears began a downward slide. Last year Amazon made more than $177 billion in revenue. Sears lost billions.
The founders of both Sears and Amazon took advantage of new technology to reach far-flung customers. Sears used the train and postal delivery. Bezos began his company because he didn’t want to miss the opportunity to use the internet. In their original forms, both companies disrupted established practices. Sears disrupted the local general store. Amazon disrupted the suburban malls and, now, Sears, itself.
Sears, Roebuck & Co. has gone from 3,500 stores in the 1990s to a little more than 500 today. It had a good run for the hundred years before that. In the 1990s its focus moved away from the home customer. Because of that, Sears likely didn’t see the value of the internet, which is unfortunate as it practically invented reaching the home customer. We can only guess if Amazon will last as long before the next technological disruption — or change in focus — occurs.
The empty Sears building in the Newgate Mall now stands as a powerful reminder to the importance of leadership and innovation.
Dr. David Ferro is dean of the College of Engineering, Applied Science & Technology at Weber State University. Twitter: @DavidFerro9.
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