CAPE TOWN – The biggest and most successful American retailer of its time, Sears, Roebuck and Company is recognised across the globe for being the disruptive force of the 19th century which ultimately taught Americans how to shop.
Now, as disruptive innovations built around the needs of a technology-and-convenience-driven world take hold, the once thriving business is in disarray, entering bankruptcy in October.
Having experienced such impressive success, what went wrong? And how can 21st century businesses avoid making the same mistakes in the current market?
Vian Chinner – a South African innovator, data scientist and chief executive of the machine learning company specialising in consumer behaviour prediction, Xineoh – suggests that modern day businesses can learn a lot from the Sears story. He highlights that the biggest learning is to constantly adapt with the times and, regardless of past success, to continue evolving with technology.
A general merchandise, tools, home appliances, clothing, and automotive parts and services retailer, Sears was the first to provide consumers convenient access to goods at fixed prices. “Prior to its establishment, most people would visit their small, local shop where a clerk would assist them from behind a counter, billing them at the end of each month and basing this monthly total on their perceived credit risk.”
Chinner continues, “Sears adapted to the second industrial revolution at a far faster pace than its competitors, taking advantage of – and building on – new infrastructure like railways, the printing press and the telegram. This saw the company push others out of business and grow at an incredible pace. However, this is where its evolution came to an end. Sears did not fully embrace the potential presented by the third industrial revolution or computer age. It’s application of new world technology started and ended with the introduction of a website and, with the rise of tech-focused retail giants like Amazon, Sears was left behind in the dark ages.”
“The lesson here is that just dragging and dropping technology, like a website, on a company isn’t enough for it to compete with others which have been built on this new technology. A greater incorporation of the technology is needed, across all levels,” he says.
Chinner emphasises that modern day businesses which have survived the computer age are at risk of falling behind and beginning their own decline if they do not look to evolve with the innovations of the current, fourth industrial revolution or digital age.
He says, “The most disruptive technology of this age, artificial intelligence, may be seen as a buzz word for some businesses which are tapping into it just enough to add to their marketing communication and give the impression that they are, in fact, cutting-edge. Company leaders should be asking whether they are just dragging and dropping the innovation on their existing operations, like Sears did, or if they are truly incorporating the data-centric approach in their business and shifting their operations to optimise the opportunities it presents.”
“Artificial intelligence is without a doubt as important to this generation as the adoption of electricity was to industry many years ago and the full integration of the internet would have been for Sears just a few decades ago.”
Content supplied by Xineoh.