Post by robeiae on Sept 25, 2017 9:01:02 GMT -5
A good piece (imo) at The Atlantic on how the rise of Amazon mirrors the rise of Sears: www.theatlantic.com/business/archive/2017/09/sears-predicts-amazon/540888/
A few bites:
It's probably hard for most today to understand how big Sears was back in the "good old days." My father was still going to Sears until quite recently whenever he needed a tool or a car battery. Old habits are hard to break. And when I bought my first home in the early 90's, it was Sears that I went to for a set of household tools, for sheets and towels, for window treatments, etc., mostly because that was what I learned growing up. And I still have my grandmother's china which she purchased through the Sears catalog prior to WWII.
Now, my kids assume that when they need something or I need something, the first stop is Amazon as a matter of course.
So the question is, will Amazon follow Sears all the way (back down)? My money is on "yes," though that's probably a ways down the road.
A few bites:
By building a large base of fiercely loyal consumers, Sears was able to buy more cheaply from manufacturers and wholesalers. It managed its deluge of orders with massive warehouses, like its central facility in Chicago, in which messages to various departments and assembly workers were sent through pneumatic tubes. In the decade between 1895 and 1905, Sears’s revenue grew by a factor of 50, from about $750,000 to about $38 million, according to Alfred D. Chandler Jr.’s 1977 book The Visible Hand: The Managerial Revolution in American Business. (By comparison, in the last decade, Amazon’s revenue has grown by a factor of 10.)
[snip]
Sears was not content to be an everything store for durable goods. Like Amazon today, the company used its position to enter adjacent businesses. To supplement its huge auto-parts business, Sears started selling car insurance under the Allstate brand. One might say the shift from selling products to services is analogous to the creation of Amazon Web Services—or even Amazon’s television shows. Analysts have wondered, why would Amazon want to sell books, diapers, and TV? But even the company’s seemingly eccentric decisions are centered on Sears’s old expertise: becoming an inextricable part of consumers’ lives.
[snip]
Sears was not content to be an everything store for durable goods. Like Amazon today, the company used its position to enter adjacent businesses. To supplement its huge auto-parts business, Sears started selling car insurance under the Allstate brand. One might say the shift from selling products to services is analogous to the creation of Amazon Web Services—or even Amazon’s television shows. Analysts have wondered, why would Amazon want to sell books, diapers, and TV? But even the company’s seemingly eccentric decisions are centered on Sears’s old expertise: becoming an inextricable part of consumers’ lives.
Now, my kids assume that when they need something or I need something, the first stop is Amazon as a matter of course.
So the question is, will Amazon follow Sears all the way (back down)? My money is on "yes," though that's probably a ways down the road.