Among other things, Sears was afraid of cannibalizing their in-store sales and didn't understand the potential of the internet. They had a very B&M-centered mindset.
They missed the internet and when they tried to get into it, they just failed at every turn.
It's the same story as when Sears rose to prominence: they saw a business model the other mail-order retailers didn't understand.
The irony is Sears started as a mail-order catalog but couldn't get back to the old model in time. But of course their large management structures couldn't move as fast as small company with somebody like Bezos at the helm who could just make calls on the spot.