Sears’ Ongoing Struggle to Compete

Sears is continuing to feel the heat from its competitors, including those that may have learned from its mass distribution model.

The company, which was the front-runner in mass distribution starting in the 1800s with its mail-order catalogs, is now struggling to keep up with companies that have dramatically upgraded that original mail-order subscription model —  for example, what Amazon has done with its Prime memberships, according to Entrepreneur.

In recent years, Sears’ sales have steadily weakened, “unable to keep up with companies that sell appliances, like Home Depot,” as well as sellers in other categories, The New York Times reports.

“Sears used the railroads and post office in ways no one had, disrupting the status quo, with distribution tactics that resembled the ecommerce experience we know today,” Entrepreneur says. “Like the mail catalog king, today’s online giants found success by disrupting distribution. And, the more they continue to do so, the stronger footholds they have in the market.”

Sears will be closing at least 50 stores within the next few months, following a “challenging” holiday selling season impacted by “historically warm weather and intense competition pressing margins and driving comparable store-sale declines,” the company says in a statement provided to The New York Times.

Sears’ stock is down by 20 percent this year, and store sales dropped 6.9 percent in the fourth quarter. Kmart, which is also owned by the company, saw sales drop 7.2 percent, The New York Times reports.

The business still has plans for a turnaround, looking at ways to change its sourcing, pricing and inventory, according to The New York Times. Sears has a goal to sell at least $300 million of its assets during the first half of fiscal 2016.

“Sears keeps pruning its business in a years-long makeover, a bid to transform itself from a 123-year-old retail store into a nimble, 21st century operator,” The New York Times writes.