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Like the rest of Big Retail, Sears thrived for a century and a half on a low-wage, low-productivity strategy, hiring thousands of workers to wade through mountains of inventory and stock shelves. But its policy of sluggishness finally caught up with it, as the company today filed for bankruptcy with plans to close another 142 stores.
Why it matters: Brick-and-mortar retail still rakes in a whopping majority — 91% — of shopping dollars. But Sears' fate is the latest and perhaps most dramatic example of how, since 1990, the productivity of department stores has stayed remarkably flat, while online shopping has surged, Axios' Erica Pandey writes.
Background: Sears' bankruptcy filing comes after a decades-long decline, during which a retail empire of about 3,500 stores in the U.S. and Canada and some 350,000 workers shrunk to 700 mostly unprofitable outlets and 68,000 employees. As the company bled assets, it saw a plunge in sales and productivity, which in retail is a ratio of sales to employee hours worked.
When Amazon raised its minimum wage to $15 per hour, it was a shot across the bow of traditional retailers — many of whom are barely getting by paying workers $10 an hour, Erica writes.
"Amazon is changing the whole supply chain, and retailers who say, 'Don't wake me up,' are in trouble. Anybody who sticks with their old business model is going to be run over."— Michael Mandel of the Progressive Policy Institute
As is clear in the chart above, e-commerce is far more efficient per worker. And Stern's Kleinberger says its disruption runs deep:
Worth noting: Some brick-and-mortar chains have quickly shifted gears as Amazon continues to disrupt retail — and they're thriving.
Technologists and reporters started a Twitter fire yesterday to criticize consumer robot companies that post videos depicting super-impressive human-like action, but then fail to explain the limitations of their creations.
What’s going on: Boston Dynamics, a revered but very secretive robotics company, published two videos of their walking bots last week, writes Axios' Kaveh Waddell.
The short video of the humanoid robot, Atlas, bounding nimbly up a set of blocks drew the ire of observers tired of seeing flashy demos without technical explanations.
This ignited a pile-on:
Boston Dynamics isn’t explicitly claiming its robots can do anything that they can’t. It’s just not saying anything at all and letting experts and the public draw conclusions that may reflect better on the company than the truth.
Go deeper: The video that set off the storm
Screen capture: Vala Afshar Twitter feed
Amazon delivery drivers ineligible for $15 wage (David Dayen — In These Times)
A dozen jumpers (Vala Afshar's Twitter feed)
Dot.com deja vu in China (Phred Dvorak, Liza Lin — WSJ) (subscription)
The anglo-American brain drain (Simon Kuper — FT) (subscription)
The seven U.S. tribes (Stephen Hawkins, Daniel Yudkin, Miriam Juan-Torres, Tim Dixon — More in Common) (h/t George Packer)
Photo: Thomas Trutschel/Photothek/Getty
What's going on: Capsules, which plug into fancy machines to brew instant cups of joe, are the fastest-growing category of coffee — and hot drinks at large, per market research firm Euromonitor International, writes Erica.
Driving the news: JAB just delivered a blow to Nestlé with a deal with Italian coffee company Illy to distribute its capsules.