Amazon vs Brick & Mortar Stores
If you live in an area with malls or at least plenty of department stores, you’re sure to have seen quite a lot of transformation in just the past few years alone as some seemingly untouchable giants fall to earth and companies embracing the modern market soar.
The Changes
Mall staple J.C. Penney has closed 138 stores over a period of a few months last year – that’s 14% of its locations going down — and that was after several closings and layoffs in previous years. Once a popular stop just decades ago, Toys R Us just announced it is going completely out of business, and beyond some last-second attempts that don’t seem to be working, they will be gone soon enough.
Another store that is seeing reality hit them is Sears, which announced earlier this year that they would shut down dozens of locations, adding up to over 100 stores under their brand that also includes Kmart.
With the shock of these franchises failing comes people quickly looking for someone to blame, especially for the more “old-fashioned” crowd that prefers the way they’ve shopped for things all along — in person. It’s pretty clear that those who are angry at these store closings are taking the easy route and blaming the new giants in the business. Who easier to pick on than Amazon?
The Story
The newest community taking aim at Amazon comes from Toms River, New Jersey, where a Sears just officially shut its doors for good on Sunday following four decades in business.
NJ Advanced Media brought the story of various shoppers capitalizing on liquidation sales, or others who just wandered in the doors for some nostalgia of a time when a Sears catalog was a hot ticket item.
One shopper cited in the story was more calm about the closing, seeing it almost like a transfer in power between one former giant in shopping to another, saying,
“Sears was like the first Amazon.”
She then laments Amazon’s power anyway, adding,
“It’s too bad Amazon is so big.”
Others are a bit more direct with their feelings, as another shopper went right at Amazon, saying,
“Everyone internet shops a lot, and Amazon, they’re the killers. It’s killing everybody.”
This same person quoted there then goes on to mention how they will now have to go to stores like Target instead – not sensing the irony of going to another store that could equally be blamed for Sears demise as they’ve succeeded in recent years.
Who’s to Blame?
Everybody wants a scapegoat when things fall short, and shoppers who are continuously seeing some of their favorites disappear are very willing to be vocal about their opposition to the new kids on the block. Sure, Amazon’s success in capitalizing on buyers in the Internet age takes away potential Sears buyers, but many of these disappearing mega-store franchises have themselves to blame more than anything else.
In a piece published in 2016, Fortune took a look at what Sears has done wrong to go from one of the world’s top retailers to a company that was hemorrhaging billions of dollars each year.
The author gives 3 reasons as to why Sears fell short, but all 3 seem to share 1 common theme: ignorance to change.
Fortune writer Geoff Colvin notes a piece he wrote in 1991 that discussed Wal-Mart’s run at the top of the retail throne. But instead of noticing and making changes, Sears called the piece “misleading.” 25 years later, Wal-Mart’s profits were nearly 20 times larger than Sears’.
Forbes offered their own take on Sears’ failures as well — clearly their easy-to-find mistakes they made – and they look even deeper. The piece references a move back in 1981 that took their focus away from what made them popular.
“Sears, Roebuck & Co. made the first strategic mistake – an aggressive expansion outside its “core” retailing business, into financial and real estate services… by purchasing the Dean Witter Reynolds securities firm and the Coldwell Banker real estate operation.”
Sears made a plan of dominating other industries, but they took their eye off the ball from what made them so successful and their retail business slowly suffered as others picked up their slack.
But a more important element that correlates directly with how Amazon and others have succeeded comes later in the analysis: Simply, Sears let the trends of the times pass by.
“Sears is missing the same thing as Penney’s. I believe this establishment to be antiquated business models. The world is a different place now. Growing up, Sears was part of American life. If I go there now, it’s as a last resort.”
Colvin also goes on to say that not only had their business practices fallen behind, but they’ve allowed their merchandise to become old and behind the times as well. Though Amazon has a grasp of the market for so many different reasons, Sears allowed these different mistakes to harm them on their own. Players who were willing to take risks early on are seeing profits now.
Amazon vs Brick & Mortar Stores – The goings on of business and profits aren’t always fair, and even the best businesses can end up failing for different reasons. But many of these once-great retail giants have the resources, money and brainpower to continue to stay atop the market, but choose to stay stuck in the era that made them successful.
Sears, Toys R Us and more can be cautionary tales for current retail giants to make change now if they must, or for powers like Amazon to continue to be willing to be risky in the future.
Kyle Kandetzki is a freelance writer and broadcaster. He graduated from Hofstra University in 2017 with a degree in journalism. He was active in the media atmosphere at the Long Island school as an editor for the school’s newspaper and an on-air personality at 88.7 FM WRHU.