How the Histories of Sears and Amazon Can Inform the Future of Financial Institutions

At one time, Sears was unstoppable. Its name stood alongside America’s industrial greats. It built the tallest building in the world. It sold everything from socks to houses. It did so by mastering logistics and delivering goods directly to the rural consumer’s front door.

Sound familiar. While Sears exists mostly as a memory today, Amazon has thrived by replicating the original Sears delivery model and digitizing it.

Ultimately, Sears died under the weight of its physical infrastructure and its failure to integrate online delivery into a seamless omnichannel experience for its customers. Yet Amazon has pivoted from a digital only delivery model to building physical stores, including grocery stores, bookstores and clothing stores. It is a curious turn of events. The very company that made the mall feel obsolete is now walking back into the marketplace.

For financial institutions, the stakes are real. The number of banks in the U.S. has been contracting at an accelerating rate. According to FDIC data, there were approximately 4,587 FDIC-insured banks at the end of 2023, dropping to 4,487 by December 2024. New bank formation remains nearly flat, while closures and consolidations increase.

Credit unions are not immune to this trend. According to NCUA data, the number of federally insured credit unions declined from 4,604 in Q4 2023 to 4,455 by Q4 2024,a loss of 149 institutions in just one year. Smaller credit unions are especially vulnerable, with many experiencing negative membership growth, particularly those under $50 million in assets.

The lesson is clear: Failing to modernize and integrate physical presence with digital delivery risks making your institution irrelevant.

Meanwhile Amazon surges forward.

What Financial Institutions Must Consider

Branches are not obsolete, but neither are they sacred. Like Sears’ stores, they risk becoming expense anchors if they aren’t connected to a broader digital strategy.

The most successful financial institutions today are asking different questions:

• Not “Should we close branches?” but “What role should physical space play in our digital ecosystem?”
• Not “How do we reduce cost?” but “How do we convert physical infrastructure into strategic leverage?”
• Not “What do we do when branch sales are declining but “Is there an opportunity to decentralize service and utilize branch staff more effectively?
• Not “What tech do we need?” but “How do we realign our culture, data, and delivery model around the customer?”

Let’s be clear: many institutions still operate with siloed tech stacks, disconnected business lines, and underfunded innovation budgets. Some still fear that digital channels will cannibalize in-person services. These patterns mirror the same logic that sealed Sears’ fate.

But others are reimagining the roles of their traditional delivery channels (branches, ATMs, call center) within the context of the digital revolution, understanding that presence, whether physical or digital, must serve a coherent experience.

Final Thought: Infrastructure is Not Strategy—But It Can Be

Sears had real estate, and Amazon had code. What matters now is not either asset alone but how it’s used.

Financial institutions must look inward and ask: Are we using our infrastructure, branches, data, and delivery models as a platform for growth? Or as a monument to how we used to work?

Because one of those paths leads to Amazon. The other to Sears.