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Economics and Business

Department Stores

What was the first mail-order company?

The mail-order business was pioneered by retailer Montgomery Ward & Company, founded in 1872 in Chicago when American merchant Aaron Montgomery Ward (1843–1913) set up shop over a livery stable and printed a one-sheet “catalog” of bargains. Midwestern farmers, hurt by low farm prices and rising costs, were a ready market for the value-priced goods, which were shipped by rail to rural customers. Originally called “The Original Grange Supply House,” Montgomery Ward offered 30 dry goods priced at $1 or less and provided special terms of sale for Grange members (the Grange is an association of farmers). Ward bought merchandise directly from wholesalers and, since he did not maintain a store building, overhead was low. By 1876 Ward’s catalog had grown to 150 pages; in 1884 it was 240 pages and offered nearly 10,000 products, including household items (such as furniture, cutlery, and writing paper), farm implements (such as harnesses and tools), and fashions (such as ready-made apparel and parasols). Ward offered customers “satisfaction or your money back.” In 1886 American Richard W. Sears (1863–1914) entered the mail-order business, opening operations in Minneapolis, Minnesota. He moved the business to Chicago the following year and sold it in 1889. In 1893 he joined with Alvah C. Roebuck (1864–1948) to found Sears, Roebuck and Company. The Sears catalog, which soon consisted of hundreds of pages and thousands of items, became popularly known as the “Wish Book.”

Montgomery Ward and Sears Roebuck were aided by the U.S. Postal Service’s expansion into remote areas: Beginning in 1896 mail could be delivered via the RFD, Rural Free Delivery. In 1913 parcel post was added to the postal service’s offerings, further benefiting the mail-order houses and their growing lists of customers. Montgomery Ward and Sears Roebuck offered rural America more than merchandise; the mail-order houses were farm families’ link to the greater consumer society that was emerging at the turn of the century. Regardless of geography, rural Americans could purchase “store-bought” goods, manufactured goods that were mass-produced in factories. The mail-order houses offered customers convenience (since customer purchases no longer had to be deferred for the next trip to a town), variety (since catalogers catered to a nationwide customer base, on-hand inventory included a multitude of products), and low prices (the mail-order houses bought merchandise at reduced rates from the wholesalers). Fashions were no longer restricted to the middle-and upper-class city dwellers who had access to department stores; rural customers became aware of new styles each time the Montgomery Ward and Sears Roebuck catalogs were delivered, which, by the early 1900s, was twice a year.

Though both Montgomery Ward and Sears Roebuck exited the mail-order business to concentrate efforts on their chain store retail operations later in the century, they set the standard for modern mail-order houses through their early policies addressing merchandise returns, competitive pricing, flexible payment methods, and shipping terms.



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