More About The Great Collapse In Retail

Thursday, March 23, 2017
By Paul Martin
March 23, 2017

With so many chains running into serious trouble, here is more about the great collapse in retail…

A portion of today’s note from Art Cashin: Retail Revolutions Are Neither Rare Nor Permanent – Sears, Roebuck and company recently issued a very strong caution about its ability to survive while moving forward. That instantly brought to memory the near dominance in retailing Sears had once attained. The fascinating story of the rise and reverse of Sears is wonderfully outlined as part of some recent presentations by my good friend John Mauldin.

I contacted John, who in his normal gracious manner gave me permission to preprint his wonderful outline. Read, learn and enjoy.

(John Mauldin) The Amazonian Jungle
Let’s start with a story to illustrate my concern. There is a company in the United States that began by offering a few products directly to consumers, and then quickly expanded its offerings until they included almost everything a person could want. This company went directly to the consumer, bypassing local brick-and-mortar stores, and became enormously successful, meeting the needs of its customers all over the country. Of course, the local stores were often (as economists will say) “disintermediated,” which is a fancy way of saying they couldn’t compete on price and selection, let alone delivery and convenience, and went belly up. And with them went the jobs of the people they employed.

Recently I’ve been using that story in my speeches and conversations, and everyone nods their heads and says, either out loud or mentally, “Amazon.” Except that I’m not talking about Amazon. I’m talking about another icon of American retailing called Sears, Roebuck & Co.

In the late 1800s, Richard Sears began to sell watches by mail order. He sold that company, but a few years later he started another mail order business to sell clothing and other products. The initiation of rural free delivery in 1896 and parcel post in 1913 enabled Sears to send its merchandise to even the most isolated customers. The Sears catalog became a staple of American family life. By the 1960s one out of 200 US workers received a Sears paycheck, and one out of every three carried a Sears credit card. The Sears catalog was a book of dreams that allowed those of us who grew up in rural America to access products that were either not available or were very high-priced in our local general store.

The Rest…HERE

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