Is Amazon the Sears of the 21st Century, and Will It Become the Sears of the 22nd Century?

On October 15, 2018, The New York Times published an editorial called, “How Sears Was the Amazon of its Day.” Frankly, I have been writing about this for a while because it seemed like such a clear and obvious comparison (or so I thought). In fact, as of 2018, with Amazon’s growing brick and mortar presence, the similarities between the two entities seem ever more accurate. Yet despite this comparison and the truly transformative impact Sears has had on the nation, few, if any, have ever called Sears a “distruptor”…although today some might argue that their decline is unfortunately disrupting the lives of their employees.

“Sears became the Amazon of its day because its co-founder Richard Warren Sears harnessed two great networks to serve his enterprise — the railroads and the United States Postal Service,” writes The Times editorial board. Before any other company, Richard W. Sears had the sense to consider whether he could use powerful existing resources and technologies to improve the lives of his customers (and obviously, increase his business sales).

This is precisely how Jeff Bezos built his business. He utilized existing resources and technologies—the internet and an expanded shipping ecosystem that included USPS, FedEx, and UPS—to build a 21st century retail empire. “Amazon, the world’s leading e-tailer, is now one of the biggest clients of the Postal Service,” the Times notes. And, similar to how Sears utilized catalogues to promote the products being offered (Sears “put a catalog in the hands of 20 million Americans in 1900, when the population was 76 million”), Amazon has managed to harness the wide reach of the internet to make online shopping cost-effective and convenient for its 100+ million Prime subscribers). As a must be considered and fascinating side note, Amazon will be sending out its first ever print catalogue this holiday season—although they do still commonly use direct mail and traditional television to promote their products and services.

Another interesting comparison between the two companies is the globality of their businesses. Sears was one of the first American retailers to go global. The store opened its first overseas location in Mexico City in 1947 and established a Canadian presence in 1952, long before the days of a globalized economy. Amazon, as you know, services consumers all over the world.

The truth is, Sears wasn’t a disruptor. And neither is Amazon. They are builders. Revolutionaries. As University of Chicago business professor, James Schrager writes, Sears “wasn't just a corporation — it was a revolution.” “Sears taught Americans how to shop,” he adds. Neither company has disrupted consumers…they have each transformed the way consumers shop, and along the way, have changed how all retailers do business.

Sadly, Sears filed for bankruptcy this year—a victim of financial engineering and lack of forward-looking vision. But before its death rattle in this digital age, Sears lived a remarkable life. It saw the reign of Queen Victoria, the takeoff of the Wright Brothers’ first flying plane, the assassination of Franz Ferdinand, the birth of Bolshevism, the fall of the Russian Empire, the rise of Nazism, Pearl Harbor, the Moon Landing, and in its twilight years, the invention of the World Wide Web. And even though Sears is gone, its eponymous tower still looms large in Chicago, reminding us all of what a small retail business with an innovative vision could possibly be—and what awaits those who lose their core vision in pursuit of profit at the expense of their customers.

Sears is the original revolutionary who lost its way. Amazon is the radical evolutionary who seems to be keeping its eyes on the prize—the consumer. As another great retailer, Sam Walton, once said, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Let me end with a final comparison and lesson. Perhaps the greatest and most important parallel between the two historic giants are their founders’ shared appreciation of innovation and risk. Sears was an early business to embrace the idea of going public to earn more capital to grow. Last year, Bezos took a 13.4 billion dollar bet by boldly acquiring Whole Foods. Listen:

"No man can learn to be a 'crack shot' unless he wastes some ammunition. The employer should stand the expense of the experiments made by a new man who shows ability; it will pay in the long run." –Richard W. Sears

 Sadly, Sears lost its way and started firing blanks. Bezos and his company have kept up the target practice, and in my book, are crack shots. What do you think?