Going to war with the department store you have

Last weekend’s Wall Street Journal contained, as a rather interesting two-page spread, a brief oral history of Sears Roebuck, the iconic American department store that has been circling the drain since perhaps the mid-1990s. (See Suzanne Kapner, “Sears: How it Lost the American Shopper,” WSJ, 16–17 March 2019, pp. B1 & B6-B7.) Some of the interviewees therein insisted that Sears was actually not long-fated to failure, but the first comments in the chain from a former chief executive are telling about Sears’ perceived prospects back then:

 

    Arthur Martinez, a former Saks Fifth Avenue executive, ran the Sears Merchandise Group from 1992 to 1995 and was CEO from 1995 to 2000:

    “When I was being recruited to Sears, I was really on the fence. One of the directors was Donald Rumsfeld. He called me up and told me it was my duty as an American to take the job.” 

 

Oh, dear—I thought as I read this—there is so much wrong with that. 

 

For background, let me note that I had some indirect personal experience with the issues of the time. In 1995, I left a job as a systems analyst for ANSER, a federal services contractor in Arlington, Virginia, to attend the MBA program at the University of Chicago. Sears was a notable recruiter at the graduate business school, but plenty of us had the sense that Sears would soon have serious issues. There was a tiredness about that company evident even then.

 

So why would Rumsfeld make that pitch to Martinez? The everything-old-sucks mania of the late 1990s hadn’t yet taken hold. Amazon was founded only in 1994. The Pets.com debacle was still years away. Saving Sears somehow meant saving American retail—as if American retailing needed saving. Rumsfeld was just plain wrong, but what makes his misplaced patriotism remarkable today is his once-and-future service as defense secretary. Some corners of the defense industries show a remarkable lack of structural dynamism, and that stasis can convince casual observers that corporate failure means military failure. The relative demise of Sears didn't mean that I couldn't buy socks. As for this Chicagoan, I was already shopping at Target.

Comments

[Dave Foster]

Jim,

True, but to break the analogy a bit, in ways we are in a post-sock world. So, it's not just a matter of being able to get socks via alternate paths. The military's primary answer to virtually all questions is presence, and it's secondary answer is kinetics. Presence needs quantity, and waning numbers of exquisite gadgets creates a twofold problem: less presence (or presence at the expense of training and maintenance, which accelerates the waning numbers) and elevating the target value of the individual gadgets. So, in spite of being in an era of distributed operations concepts promotion, the distributed nodes each become a force concentration/mass - they are now all worth attacking because our industrial base is in no position to replace attrition (we are now where Washington's army was during the Revolution or the Japanese were in 1904-1905).

As for kinetics, for all our prowess in low threat environments, the tactical excellence has shown not to accrue to any favorable strategic outcome.

We don't need Sears to get socks, but socks are not as useful anymore. But this is a military mentality problem not a logistics model problem. Industry will supply what is wanted even if what is wanted is decreasingly germane.