Sears, Other Retailers Reel From Gales Of 'Creative Destruction'

Investors Business Daily ^ | 1/05/2017 | TERRY JONES

[expat_panama]

Sears. Macy's. Kohl's. Traditional department store retailers have taken hard hits over the Christmas holidays, with sales lagging the generally robust performance of retailers overall. Now, these mall stalwarts are slashing thousands of jobs and hundreds of stores, trying to right-size themselves. It's no coincidence.

Sears on Thursday became the latest retailer to announce that it was restructuring... ...Macy's is letting 10,000 people go. And Kohl's warned about its decline in sales over the holidays. Analysts expect Kohl's to announce cuts.

A few years back, it was discounter Wal-Mart, the biggest retailer on earth, announcing it was closing 100 stores.

What's going on here? In a word, Amazon.com.

The online e-retailing giant has become a dominant force...

...as brutal as it sounds, this is actually a good thing... ...new generation of retailers is using technology to personalize the customer's buying experience and use artificial intelligence to compete on the web.

Sears will never be the same. Nor will the rest of the industry. And economic changes such as those experienced by our venerable high-end retailers aren't pleasant. But they usually are beneficial and even necessary, bringing new growth where there was none and offering new possibilities for workers and customers alike. So while we lament the nostalgic past, we should also embrace the possibilities of the future.

[Dacula]

We have been Amazon Prime customers for a couple of years and it has been nice, but I am tired of putting money in Jeff Bezos’ pockets.

I am going to try Jet.com. it looks like they carry the same stuff as Costco.

[stayathomemom]

The Limited....

My daughter mentioned this to me yesterday. She said it happened fast, just a couple of days after they announced. It's her go-to store for pants for work, so she is relieved that they will have an on-line presence.
I wonder if Trump's trade policies affect the supply chain and manufacturing of all those garments?

[expat_panama]

Welcome back to work everyone!

Don't worry about having missed anything because we're all beginning on the same page where nobody knows nothin'. Namely, stock indexes have gone up the top of their recent range w/ the Dow hitting an all time high of 19,995 (!), but now futures traders refuse to say there'll be more progress on the upside. 

On the other hand they won't predict downside action either -they're flat.  On the other hand (by now we all know that econ geeks never stop at two hands) metals futures predict a quarter% rise even though (!) gold & silver prices are fading already to $1,176.50 and $16.54.

Humph.

Our bean counters aren't up to speed yet, they only got Consumer Credit for us this afternoon, but we got plenty of FR econ threads:

• Britain Booms After Brexit — Will Last Country To Leave EU Turn Out The Lights?
• U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES November 2016 [9 MONTH HIGH --TRUMP EFFECT?]
• Fiat Chrysler to build 3 new Jeeps, create 2,000 jobs in US
• Obama's Final Jobs Report Is A Fitting End To His Presidency
• How Obama’s Jobs Record Stacks Up
• How the University of California exploited a visa loophole to move tech jobs to India
• Exclusive: Top Trudeau advisers have high-level meetings with Trump officials
• Trump has already created thousands of jobs, but needs big reforms to keep them
• Canadians will eventually warm up to Trump. Until then, stop treating him like a monster
• Worrying About the ‘Trade Deficit’ Is Absurd to the Nth Degree
• Barclays considers Elon Musk a potential commodity ‘black swan’ of 2017
• Ford plant turns 'cemetery' as Trump wrenches Mexican autos

[moovova]

Jet.com...just bookmarked it. Thanks.

Truth is, I just don’t buy much “stuff” anymore. Don’t need or want a lot of what I have...certainly don’t need to cram more stuff into diminishing household space. Been slowly trying to Goodwill or throw out stuff for awhile now.

[JayGalt]

Actually there is tremendous opportunity to start a small business by piggy backing on Amazon.

Amazon sellers are an integral part of Amazon. Amazon has provided a platform that they can use to reach customers across America and the world. They can work with manufacturers and drop ship, mail themselves or utilize Amazon drop off sites so that Amazon handles their shipping needs.

Originally the focus was drop-shipped items but now groceries, food specialty producers, crafts people and a myriad of other sellers market through Amazon. In addition companies, one example is Fabric.com, offer the opportunity to use Amazon checkout on their own websites for customer convenience and to simplify their billing process.

[Mr. Jeeves]

Why should a pair of Polo shorts cost $60 when it cost maybe $10 to make them?

A very large chunk of that is mall rents, which have grown far faster than inflation. Smaller retailers have zero chance to make it in a big mall - that's why they are all filled with the exact same national chain stores, no matter what city you visit.

Retail, like heavy manufacturing, has been well studied by governments and other rent-seekers - thus, there are now a hundred vultures between the manufacturers and the cash register, all waiting to pounce and grab their cut. They haven't completely figured out Amazon yet (or software makers at all) - but I expect they will eventually catch up.

[Mr. Jeeves]

Except that Amazon watches what you do very closely. If your product is successful, they will have it made for themselves or knock it off and put it on Amazon at lower prices than you can match. As operators of the (expensive) distribution platform, they are in a position to learn exactly who your suppliers are and how much you are paying. You lose the trade secrecy you get from the far more complex option of running your own operation.

It's almost a perfect scam: "We'll help you out, just come bring your business ideas to us - so we can see which ones are good and steal them."

Unless you are selling hand-made cuckoo clocks from your own private studio, it can be dangerous to do business with Amazon. Many small businesses have been complaining in the national media about Amazon stealing their ideas and kicking them to the curb once their product has been proven in the marketplace.

[ctdonath2]

Would be fascinating to hear the speech. I was at Smith-Corona and Kodak when they crashed due to not knowing how to hold onto what they had in a changing world. The signs of “gonna lose it” were claxons, ignored.

[odawg]

“Sears created his empire because Montgomery Ward refused to budge from being an at home catalogue mail order company.”

In other words, they wanted to be Amazon.com before the internet came around.

[ops33]

Have you tried Lands End? I have used them for over 30 years and rarely did I purchase something that did not fit. Their clothes seem to last forever plus, when they do run out everything comes with a lifetime guarantee. Send it back and get store credit, no matter how long you’ve had the item.

[bert]

stuff at lands end is now on sale

[ops33]

For great work clothes try Duluth Trading Company.

[GreenHornet]

Yup Sears had all the pieces and lost management control of the operation. They probably needed to do a Cntl+Alt+Del, but they didn't. When I tell millennials that you could order a complete house from Sears they don't believe it. I have to show them the evidence.

There was even a time when Sears sold its own brand of automobile in its stores. The "Sears Allstate" was a rebadged version of the Henry J, a small car produced by Kaiser Motors in the early 1950s.

[TheNext]

Screw even Amazon. Some produçts are 3D printed.

[wtd]

And the brick and mortar chain stores like Sears and Montgomery Wards killed off the mom and pop millinery, haberdasheries, shoe, appliance, notions stores, photo developers, as well as individual clothing stores - many specialized to cater to children, men, women, uniforms, etc. ...just as robotics will purge gainful employment from those fulfilling the Amazon orders

.

I recall walking down the main street in my childhood hometown with many mom & pop enterprises thriving. Particularly I recall the little sewing notions store in which an elderly man stood behind a counter. Customers would request what they needed and he would personally locate each needle, thread, thimble, ribbon etc. and carefully wrap each item separately in brown paper and slip the items into a paper bag.

I miss the personalization of each of those successful businesses. Sigh.

[Daffynition]

With their catalogs, Sears had the corner on mailorder. I mean, they were the *Amazon* of their time; they didn't make that portion of their business model to grow, for whatever reason.

I recall when the arrival of the Sears catalog was a big deal in our household. And how we kids *fought* over the Toy catalog. :)

Gracious, you could even order a kit house from Sears.

[TheNext]

As you get older you need less stuff and more activity. A couple dogs and loong walks to brick and mortar establishments keeps you active that a mouse click cannot.

[wtd]

Indeed, the Sears/Penny’s/MontgomeryWard catelogs were the Amazon of their day. These tomes were treasured and squirreled away to ponder possibilities/compare shop - also a lot less impulse buying.

[ThunderSleeps]

...have you been to a mall lately? since the push for inner city blacks to move out to suburbs things have changed in some peoples minds...

There are two malls in the nearest town. One of them is basically a no-go zone. Too many of obama's son's hang out there resulting in far too many muggings, robberies or B/E of cars, stolen cars, fights, stabbings, an occasional shooting but most of the violence is more conventional. The problem is there is just so much violence in the area. No one in my family has been there in several years. Even the other "good" mall I wouldn't think of going near without my concealed carry. In fact, I don't go into town unarmed - ever.

[Daffynition]

I think the automobile and malls, killed the *downtowns* of America...and therefore the mom & pops.

Parking on *Main Streets USA* was impossibly hard; humans being what they are, wanted convenience and took to the malls [where Sears positioned themselves] where customers could car travel, park easily, and shop *all-in-one-place* for their needs.

That may be another perspective.

When I think about it, my grand daughter will never know what a millinery shop is.....picking out your *Easter bonnet* was such a big deal in the spring. :)