There Sears catalog was a big deal when we were growing up, especially around the holidays. What kid did not pour through the giant phone-book sized full color catalog to drool over the toy offerings and point them out to relatives as the things we wanted under our tree in the 4 months or so after that catalog would come out?
Sears Catalog had that brand identifier nailed down solid with several generations by the time internet sales began in earnest. The hard part was done in terms of branding and getting name recognition. All they had to do was follow the same idea that the catalog stood for - and do online sales - calling itself "The Sears Catalog". I'm not talking about a catalog retailer like Service Merchandise, but simply take the concept of catalog sales and turn it into what became Amazon today. I would think that was a much better risk to recapturing market share than to go and buy a dying brick and mortar discount retailer to challenge Walmart. That failed, and so too did Sears itself.
Yup, they blew it.
Their people probably thought the Internet would be a novelty, like fax machines; and wouldn't affect their business one iota. In retrospect that seems ridiculously foolish, but who among us saw this online-sales movement coming? After all, television infomercial sales, and QVC and The Jewelry Channel, were only getting senile widows and people with stolen credit cards. Not really a lot of volume in that.
Yes, it seems a missed call big-time; but Sears' people were suffering from their own Normalcy Bias. They knew retailing. They knew retailing because they WERE...THE retailer. This computer thing is just a fad...the mall stores, those are the thing.
This, following on the heels of IBM's own people pooh-poohing the idea that everyone would have a computer. One of their people said, most people would have "no use" for a home computer; and that's why they pulled their PC model off the market and licensed their design architecture and the DOS system.
Plenty of bad calls on the future are made, all the time.