Sears’ Demise Reveals Yet Again U.S. Favoritism of E-Commerce over Traditional Retail

by Mike Wendy on October 15, 2018

You may have heard that Sears just filed for bankruptcy, setting in motion a last-ditch attempt to save itself from erasure from the American retail landscape.

The odds seem stacked against the company, as one story notes:

“Reorganizing Sears will not be easy. The company’s e-commerce business has only a tiny fraction of the sales of Amazon, one of the world’s most valuable companies. And bringing back customers to Sears stores will take investment that Sears probably cannot afford.”

Yes, Sears made some bad business decisions over the past couple of years. It was, in essence, America’s first “Amazon” retailer, but it simply stopped innovating, especially when it came to the Internet. Like others – such as Toys ‘R Us, Payless Shoes and The Sports Authority – the rise of e-commerce (Amazon, etc.) played an integral role in Sears’ demise. Today, e-commerce sales represent about 13% of all sales, growing at four times the pace of physical retailers. As the Internet further embeds itself in our lives and habits, most experts believe that trend will not soon abate.

And how could it?

Quite simply, American policy favors new Internet business models, like those of Amazon, over “traditional” retail. Our communications, intellectual property, labor, environmental, competition, tax and zoning laws, among others, act as powerful subsidies to e-commerce.

Legislators cannot be incognizant to this favoritism, especially policies which were deliberately designed to support the “nascent” Internet (it’s not any longer).

The present “balance” doesn’t seem right.  But until it is better addressed, there will be more “Sears” to come.

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