Growth & Retail
Sears vs. Walmart vs. Amazon
Before there was an Amazon, there was the paperback version – the Sears catalog. Started in 1893, Sears was America’s top retailer for nearly eight decades. At one time, three out four Americans shopped at a Sears in the course of a year, and Sears’ gross sales would account for one percent of the United States’ gross national product. Sears was big business and now they’re barely limping along. What happened?
This statement from a 1978 top-secret executive report might give us some clues: “We are not a fashion store. We are not a store for the whimsical, nor the affluent. We are not a discounter... We are not a store that anticipates... And we must all look on what we are, and pronounce it good! And seek to extend it. And not to be swayed from it by the attraction of other markets, no matter how enticing they might be.”
In 1962, Sam Walton opened the first Walmart store in Rogers, Arkansas. By 1967, Walmart had expanded to 24 stores with $12.7 million in sales. Walmart’s IPO came in 1970, with the opening of a home office in Bentonville, Arkansas.
During the 1980’s, assuming that retail growth was limited, Sears began to diversify with the acquisition of Coldwell Banker, Dean Witter, Allstate and Discover.
At the same time, Walmart opened its first Supercenter, combining groceries and general merchandise. By 1983, Walmart replaced cash registers with computerized, point-of-sale systems.
By the 1990s Sears simplified its structure and eliminated the famous Sears catalog, and Walmart overtook Sears as the nation’s number one retailer.
In 1994, Amazon began as an online bookstore, with an IPO in 1997. By 1998, Amazon began expanding its services beyond books and started offering Free Super Savers shipping.
By the time Kmart purchased Sears in 2004, Walmart had already grown bigger than The Home Depot, Kroger, Target, Sears, Costco and Kmart combined, proving Sears wrong in their assumption that retail growth was limited. In the same year, Amazon expanded to China.
By 2005, Amazon moved into cloud computing and created the Amazon Kindle. By 2010, more people would buy eBooks than physical books. In 2011, Borders filed for bankruptcy.
By 2017, Amazon was the most valuable retailer in the US, with a market cap of $478 Billion, more than double that of Walmart.