Every article I see about Service Merchandise's decline blames the catalog business (despite doing well in internet sales) as being "too old fashioned" and the root cause, and certainly that's what people seemed to be thinking in the 90s (again, wow how they ignored those internet sales looking at the quoted figures). I'd love to see a better retrospective on the company's 1990's management given we saw Amazon succeed.
Maybe more so than Sears, the fact that Service Merchandise didn't compete better with Amazon is fascinating. Service Merchandise and Sears thought they were competing with Circuit City (dead), Wal-Mart, K-Mart (bought by Sears, dead), Target, rather than each other in the 1990s, and Amazon was left almost entirely uncontested to eat Sears and Service Merchandise's original core competencies.
I'd really like a refresher on what the retail climate was like at that time that lead Sears into thinking getting rid of their catalog was a good idea.
And why didn't Penny's jump into that vacuum?
Although I expect I already know that answer. I was warned by the oldest worker at my first tech job never to work as a software developer for a manufacturer. They don't understand where the uncertainty and the QA effort lives in the dev process and they keep trying to force it to look like what they know. Probably working for a retailer, even one with supply chain chops, would have been awful in that era.