World Trade - April 2009 - (Page 50) Great Moments IN WORLD TRADE Sears Delivers Mass Merchandising BY JEREMY N. SMITH R Richard Sears ichard Sears was a North Redwood, Minnesota railroad station agent. When a local jeweler rejected a large watch shipment, Sears bought the goods at discount. To colleagues, whose profession dictated punctuality, he resold the timepieces. His profits financed further purchases, eventually allowing for a move to the big city of Chicago where he teamed with watch repairer Alvah Roebuck and expanded his annual 32-page watch catalog to include jewelry, sewing machines, and Smith & Wesson revolvers. By 1893, the catalog ran 196 pages. When poor health forced Roebuck to retire, Sears’ leading clothing supplier, Julius Rosenwald, bought half the company for $75,000. The cash—combined with Rosenwald’s retail savvy—allowed for rapid expansion. Sears’1897 catalog, 786 packed pages, advertised cabin bags, capes, and castor oil; chisels, churns, and coffee; cutlery, cycle shoes, and cymbals—to skim just the ‘C’s. Atop every page ran this legend: “Sears, Roebuck, Co., (Incorporated), Cheapest Supply House on Earth.” Americans, sixty percent of whom still lived outside cities, had long heard similar blandishments from would-be retailers. Backing Sears, however, was not blind faith but a new mass merchandising model, and the firm spoke directly to its catalog customers on this topic. “Any one noting the growth of our house, the most marvelous growth in the history of merchandising, can only explain its increase by the wonderful values we give to our customers and the pains we take to please them,” Sears trumpeted. “This catalogue is intended to be to you a correct guide for economic buying. It is plain to the most skeptical that we are in a position to quote far lower prices direct from factory to consumer than can your local dealer. That we do quote lower prices is easily proven.” Indeed the company promised a full refund and free return shipping if prices were not at least one-third less that of local retailers. For the first time, noted one observer, just “by looking at pictures and reading specifications, [Americans] could determine…whether a stove or a wagon or a suit of clothes met their requirements.” Also essential to Sears’ success were new investments in national infrastructure: roads, railroads, and rural free delivery by the postal service, which began in 1896. “There was as yet not parcel post and freight rates were high,” writes an historian “…but it became possible for a firm like Sears Roebuck to compete with retailers all over the country.” By 1907, sales topped $50 million. Sears remained the country’s largest retailer another eight decades, until the early 1990s, when Wal-Mart finally overtook it. Five years ago, struggling to survive, Sears merged with long-time rival Kmart, but its true modern incarnation is another company altogether: Amazon.com. Like Sears, 15-year-old Amazon started small, selling only books before branching out to video tapes and DVDs, then games, music, electronics, clothing, furniture, toys, food, and more. Also like Sears, Amazon centered its business on a new public infrastructure—the Internet—which allowed the company to offer far lower prices and greater selection than so-called “brick-and-mortar” competitors. Last Christmas, Amazon recorded its highest sales ever, including orders for many as 6.3 million items daily. And Sears? Same-store sales dropped over 7 percent compared with 2007. Once more, the catalog is king. For a final similarity between the mass merchandising pioneers, observe the customer testimonials and lovingly detailed descriptions accompanying each Amazon product listing. Google “Sears Roebuck,” for example, and among the top ten search results is a facsimile copy of the 1897 catalog sold by Amazon.com. “Hundreds of illustrations and intriguing text bring this bygone era to life, describing more than 6,000 items, from abdominal corsets and zulu guns, to trout baskets and puff bangs, to bicycle suits and phaeton tops,” Amazon avers. “Perfect for collectors of Americana, social historians, and general readers, this catalog is a browser’s delight.” That they do quote lower prices is easily proven. Late last year, Amazon launched an iPhone application allowing shoppers to scan bar codes of items anywhere for instant comparison with its online-only offerings. At last check, for the 1897 Sears Roebuck catalog, Amazon’s price, $20.40, represented a retail savings of 27 percent—plus free shipping with the order of any other item. Used copies were available for $7.74. WT 50 WORLD TRADE APRIL 2009 http://www.Amazon.com http://www.Amazon.com
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