1962 was perhaps the most consequential year in retailing history: in Ohio the five-and-dime retailer F.W. Woolworth Company created a new discount retailer called Woolco; S.S. Kresge Corporation created Kmart in Michigan; the Dayton Company opened the first Target in Minnesota; and Sam Walton founded the first Walmart. All four were based on the same premise: branded goods didn’t need the expensive overhead of mass merchandisers, which meant prices could be lower. Lower prices served in turn as a powerful draw for customers, driving higher volumes, which meant more inventory turns, which increased profitability.
Sears, which had introduced a huge number of those brands to America’s middle class, first through their catalog and then through a massive post-World War II expansion into physical retail, was stuck in the middle: higher prices than the discounters, but much less differentiation than high-end department stores. By the time Buldak gave his statement the company’s fate as an also-ran was sealed, even though no one at Sears had a clue: Buldak’s stated mission of being “an integrated, powerful specialty merchant, with brand names and our own lines of exclusive merchandise” failed to consider whether customers gave a damn.
https://stratechery.com/2016/walmart-and-the-multichannel-tr...
FWIW, when I was 18 I had to get a secured card[0] and I was barely able to get it (I had to go to my bank twice to appeal the decision). It's definitely different from 40 years ago but it's not super easy for most college students, and a lot of it came down to the fact that I had a few grand sitting in a checking account and a job that paid $12.50/hr. Some of my friends who didn't have that got flat out declined multiple times (I have one friend who has applied for three different cards and she's been denied all three times, with no credit history at all).
[0]: Basically, the card had a $500 credit limit and you had to give the bank $500 for a year, after a year if you've made all your payments they give you your $500 back. It still sat in my savings account generating "interest", but I couldn't spend it
https://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009
>Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from ... wooing students with T-shirts, free pizza and other free gifts at university-sponsored events
[edit] The end of the story for me:
The credit card I got from that was amazingly bad. I had a bill put in the wrong mailbox in my dorm, so didn't get it until 3 days before it was due. I called up customer service:
Me: I can mail this today, but it is unlikely to make it there by the due date, I've always paid my bills on time, can I get a 1 week extension
CS: We can do an ACH for $20 or you will pay a late fee if the check you mail is even a day late.
Me: Seriously?
CS: Yes
Me: Okay, do that and cancel my account.
CS: Okay.
It's like they didn't even want me as a customer if I was going to pay my bills every week. Not a single attempt to retain me when I canceled my account. At this point, I had a Discover card, the CS reps for which were very kind, and my bank had just gotten my debit card on the Mastercard network (previously it was only an ATM card), so I had no absolute need for their card. Had this happened a few months earlier I might not have been willing to cancel as so many places don't take Discover.
I semi-suspect you know this, but if you pay in full every month, they don't get to bundle your debt up and sell it off as a security. Interchange fees are competitive enough that it's probably close to break even (and getting more so every year), but the securities are comparatively pretty sweet for the issuers.
* They earn money via the interest people way if they don't settle their bills in-full, and on-time.
* But they also take money for handling transactions at terminals, etc.
No "might" or "slightly" about it. It's significantly different now. When I was 18 you only needed a faint pulse to get 10s of thousands of dollars in credit. People would hand out credit applications in dorm rooms, at events, in front of classrooms, just anywhere and everywhere you could think of. It was a different time.
In less than a minute, BoA’s automated credit card application approved me and mailed out a $1000 limit card.
It seems strange that taking on a ton of unsecured debt would make creditors think it's more likely that you'll be able to pay off even more unsecured debt, but that seems to be how the system works, or at least worked two decades ago when I was in school. Perhaps the emergence of for-profit colleges that don't really offer their graduates the kind of post-schooling opportunities that traditional colleges do has changed the way that college loans are perceived since they no longer reliably predict future earnings the way they used to.
The only reason I had a vacuum at all in college was because Sears still stocked parts for 10 or 15 year old vacuums so I was able to repair someone's broken vacuum.
There are some "Sears home appliance showrooms", and an actual Sears about half an hour away, but there used to be 3 or 4 in that same area.
FWIW all my clothes were from Sears and JCPenney, my taste be damned. I know a lot of other kids my age (grew up in the 90s and 00s) were the same way, at least until quality tanked in the mid 00s.
Nonetheless, I had those quality jeans—you're absolutely right.
One of my American relatives worked for Sears mail order business from the early '80s till it closed. They were saying in the '80s it was an awesome place to work, good benefits, there was so much potential there it seemed.
MasterCard (then known as Master Charge): http://i.imgur.com/BzZONEG.jpg
Visa (then known as Bank Americard): http://creditcardforum.com/blog/wp-content/uploads/2010/10/b...
AMEX: https://i.pinimg.com/236x/15/6c/5d/156c5d0e135a6f2014a95608e...
Fun fact, American Express still to this day uses the name Charles F Frost (usually written C F Frost) for all their credit card ads. He was an advertising executive in the 60s.
If one compresses the timeline, it does seem like Amazon killed off Sears when in reality, Sears was already getting killed off in the 10 years before 1995.
In the 1980s...
- Home Depot, Lowes, Builders Square, etc home improvement stores were taking away business from Sears power tools (Craftsman)
- Best Buy and Circuit City were taking the consumer electronics business and appliances. Less customers buy Sears Kenmore.
- Target, Walmart, Williams-Sonoma, etc were taking housewares (pots, pans, etc) business
- consumers (especially kids) didn't want "department store brand" clothing from Sears/JCPenney because they were "uncool". They wanted the boutique brands (Guess jeans, Calvin Klein, etc)
- peak mall traffic was 1986 and malls started dying off after that. An easy way for me to remember that point in time is the 1985 movie "Back to The Future". When you watch the DeLorean spinning around the parking lot of Twin Pines Mall, remind yourself that you're seeing "peak mall".
- credit-cards criteria were loosened and easy credit was expanded. Sears no longer had a captive audience with the Sears credit-card that kept shoppers within Sears' "walled-garden". Before 1990s, if a young person had zero credit history, one of the first credit cards one attempted to get was the "Sears department store credit card". Once one built up credit history with it, he/she could then try to get Visa/Mastercard. In the meantime, they used the Sears card to spend money at Sears. To contrast the difference, today an 18-year-old college student can get a Visa/MC without a parent as a cosigner. That type of easy credit approval for a person with no job was unheard of in the 1960s/1970s.
There were lots of competitive forces that Sears' management didn't respond to long before Jeff Bezos arrived on the scene.