The Sears, Roebuck
& Company
and Montgomery
Ward
Promotion
Wars
|
In the late nineteenth century, the mass consumer
market was growing in the United States and presented an exciting
opportunity for creative entrepreneurs, such as Richard W. Sears.
While there were many firms promoting single products or product
lines in the mail, large scale merchandising was a new concept. Only
Montgomery Ward, founded by entrepreneur Aaron Montgomery Ward had
ventured into this area in 1872. By 1886, the year that Sears was
selling his first watches at a railroad station in Minnesota, the
Montgomery Ward catalog was 280 pages containing more than 10,000
illustrations.
Doing Business With The
Grange
Montgomery Ward prided itself as being the farmer's friend and the
official supplier to the
Grange. Ward was the first to offer a
product guarantee which was the cornerstone to gaining the respect of
rural consumers and increasing business. But when Sears put out his
first catalog in 1887, he jumped on the guarantee band wagon and took
it further than Ward. Sears explained items piece by piece in great
detail and included bank references as well as testimonials from
satisfied customers. Sears may have been a huckster at heart, but he
also had a farming background, and he knew it was important to offer
the farm customer three things: 1) assurance that he was honest,
dependable and financially sound; 2) the opportunity for the customer
to see the item before buying; and most importantly,3) irresistibly
low prices. Sears was to be taken seriously.
As Sears rapidly developed the
catalog that make him most famous, he was
able to convince the public that they needed his goods by using
friendly, folksy ad copy. Sears was gifted with a combination of
intuition, enthusiasm and first-hand knowledge of his market which
proved to be invaluable. Although he was primarily known as a
purveyor of watches and jewelry and therefore not a threat to
Montgomery Ward, he very quickly expanded his product line in the
early 1890s by buying manufacturers' surplus and distress items and
then reselling to the public at a remarkably low profit margin. His
reputation grew.
Julius Rosenwald Steers
Sears
Montgomery
Ward dominated the broad line, mail order
business for twenty years. But with the departure of Sears's original
partner, Alvah Curtis Roebuck in 1895 and the subsequent hiring of
Julius Rosenwald, Sears, Roebuck & Company was able to better
focus its attention on becoming the primary buyer for the American
farmer, an idea that originated with A. Montgomery Ward. Rosenwald
freed Sears from the day-to-day operations of the business, and he
was able to concentrate on new ways to market the catalog and win the
confidence of the public. He began advertising his "Big Book" in mail
order magazines primarily of the religious nature and aimed at rural
communities. Ward did not venture into this area with as much
commitment as Sears, and it paid off for the brash marketer. Many of
the people who received these magazines awaited their arrival
enthusiastically and read the contents cover-to-cover. Sears's forte
continued to be his ability to offer enticing products at lower
prices than Montgomery Ward and other smaller competitors. In the
1894 catalog, Sears began to seriously compete with Ward by billing
itself as "The Cheapest Supply House on Earth," one-upping Ward's
slogan "The Cheapest Cash Supply House in America."
Julius
Rosenwald
When Rosenwald took over business operation in 1895, leaving the
promotional angles in the hands of Sears, he mapped out a strategy
that closely followed the Montgomery Ward plan. Rosenwald began
focusing on selling from a central location (Chicago) and offering a
broad range of products to the American farmer. In 1896 and under
Rosenwald's vision, Sears, Roebuck and Company began offering to
rural America nearly everything imaginable for the modern household.
Rosenwald was also instrumental in developing a business ethic which
put the customer's concerns first. Thus "Satisfaction Guaranteed or
Your Money Back" became the new company slogan, but it was an idea
that had originated with Ward some years earlier. This new, stricter
ethical code for doing business was somewhat in contrast to Sears's
free-wheeling huckster ways. Rosenwald's strategies paid off as the
corporation became more sophisticated in its customer-driven
approach. The corporate philosophy changed from "what do we have to
sell?" to "what does the customer want?" A new emphasis was placed on
volume purchases in addition to streamlined distribution, and Sears
was still able to sell far beneath general store prices. Sales went
from $750,00 in 1895 to more than $10,000,000 in 1900, surpassing
Montgomery Ward for the first time. Ward's sales for 1900 were
$8,7000,000, and the corporation would never beat Sears out for sales
again. Thus, promotion wars were handily won by Sears's advertising
wizardry and Rosenwald's business savvy.
Sears, Roebuck &
Company Sales Figures
1892: $296,000
1894: $500,000
1895: $750,000
1896: $1,273,000
1900: $10,600,000
Richard Warren Sears
The Sears, Roebuck & Company
Catalog
The Development of Mail Order America and
Consumer Society
Sears Website Bibliography
Return to Sears Introduction Page
Contributed by Lori Liggett, American Culture
Studies Computing for ACS, Spring 1997
Return to 1890s
America: A Chronology