Montgomery Ward Launches a Mail-Order Business
Montgomery Ward was a pioneering figure in the mail-order business, which he established in the 1870s to address the challenges faced by rural consumers in America. Noticing the limited availability and high prices of goods in rural areas, Ward created a direct sales model that eliminated the middleman, allowing farmers to access a wider variety of products at lower prices. His business began with a modest catalog featuring 163 items, but it quickly expanded, ultimately offering thousands of products through an innovative catalog that became known as the "wish book." The company thrived amid competition from other mail-order retailers, such as Sears, Roebuck, and Company, despite facing backlash from local merchants who felt threatened by this new retail model.
The success of Montgomery Ward and Company not only improved access to goods for the American middle class but also reflected broader trends during the Industrial Revolution, including advancements in mass production and printing technology. Ward's commitment to customer satisfaction, exemplified by his money-back guarantee, set a precedent in the retail industry that resonates in modern mail-order and online shopping practices. However, despite its early successes, the company struggled to compete with newer retail giants in the late 20th century, ultimately leading to its closure in the early 2000s.
Montgomery Ward Launches a Mail-Order Business
Date August, 1872
Montgomery Ward established the first successful mail order business and built the largest distribution house during the late nineteenth century. His company provided a model to other entrepreneurs, transforming both commerce and advertising in the United States.
Locale Chicago, Illinois
Key Figures
Montgomery Ward (1844-1913), American entrepreneurGeorge R. Thorne (1837-1918), Ward’s brother-in-law and cofounder of Montgomery Ward and CompanyAlvah C. Roebuck (1864-1948), cofounder of Sears, Roebuck, and CompanyR. W. Sears (1863-1914), cofounder of Sears, Roebuck, and Company
Summary of Event
Montgomery Ward was born in Chatham, New Jersey. His father, Sylvester Ward, later moved the family to Niles, Michigan. Ward finished his schooling at the age of fourteen and became an apprentice in a barrel factory and later stacked bricks in a kiln. Eventually, he relocated to St. Joseph and went to work at a shoe store.
Ward discovered that he was a good salesman and began working for a general store; after three years of employment, he rose to the position of manager. The retail experience was important for Ward. By 1865, Ward relocated to Chicago, Illinois, the hub for wholesale dry goods, and began working for a lamp house called Case and Sobin. A few years later, he joined Field, Palmer, and Lieter, which later became Marshall Fields. He worked for them for two years, then went to work as a traveling salesman for the mercantile dry-goods business of Wills, Greg, and Company.
In the post-Civil War era, the United States was still primarily agrarian. Ward visited rural communities throughout the Midwest; he noticed the unfair practices of local storeowners. Merchants kept prices for their products high as a result of the costs to suppliers of bringing items to rural areas. The variety of stock available for purchase was also limited. This forced farmers to buy goods on credit until their crops were harvested, creating a continuous cycle of debt. In order to reduce the costs associated with the middleman and to meet consumer demand, Ward decided to try direct mail sales, offering more products, and delivering the orders to the nearest railroad station.
Ward’s idea got off to a rocky start after his first inventory was destroyed by the Great Chicago Fire in 1871, but by the next year, he had received sixteen hundred dollars in capital. Accordingly, in August, 1872, Ward and two others, George S. Drake and Robert P. Caufield, rented a small room on North Clark Street. Their first catalog was a single-sheet flyer that listed 163 products and gave instructions for ordering them by mail. However, both of Ward’s partners left the business within a short time, because they believed it was not lucrative enough. George R. Thorne, a good friend of Ward who had lost his own grocery and lumber business, decided to join Ward as a full partner.
Three events soon worked to the advantage of Ward. First, the Chicago Tribune ran a story on November 8, 1873, about his company and accused Ward of fraudulent practices. Ward responded that the newspaper should investigate his operations. The reporter who came to Ward’s supply house was so impressed with his business acumen that the paper wrote an endorsement, and Ward reprinted the article in his 1874 catalog.
The National Grange, or Patrons of Husbandry, formed in 1867 by Oliver H. Kelley in Minnesota, was a growing political force in agricultural areas. It rallied farmers against monopolistic practices of the railroads, emphasizing the need for fair pricing, regulation, and the creation of cooperatives for creameries, warehouses, and elevators in order to sell crops. Ward was able to win the trust of the unified rural community when he introduced a money back guarantee on all his products.
Finally, printing and typesetting innovations, such as the Linotype, aided Ward in making the merchandise in his catalogs look attractive to consumers. Thanks to these technologies, high-quality images and illustrations could be reproduced in great quantity. Ward’s copy was as high in quality as his images: As company head, he proofread every catalog for accuracy and approved the final copy sent to the printers.
At first, Ward offered only dry goods, but as the business grew, the catalog began to offer home and farm accessories. Eight years later, the company’s catalog had grown to 240 pages and listed ten thousand items; consumers referred to it as the “wish book.” By the late 1880’s, the business had grown so fast that Ward had to buy a six-story warehouse on Michigan Avenue that employed more than one hundred clerks and one thousand workers. By 1904, the company distributed three million catalogs that weighed four pounds each.
In 1896, Montgomery Ward and Company confronted major competition in the mail-order business from R. W. Sears and Alvah C. Roebuck. Four years later, Ward had total sales of $8.7 million versus Sears, Roebuck, and Company’s $10 million. This rivalry endured into the twentieth century, and both companies struggled for dominance in the marketplace. Providing such convenience met with complaints by local merchants, who believed large mail-order companies were hurting the local economy. Storeowners printed flyers and advertisements urging townspeople to start campaigns against Montgomery Ward and Company and Sears, Roebuck, and Company. In some instances, there were public burnings of catalogs, but the majority of these protests were of little or no use. Montgomery Ward and Company remained a mail-order company until 1926, when it opened its first retail store in Plymouth, Indiana.
Significance
Ward’s mail-order company increased the standard of living for the American middle classes and brought wholesale prices from urban centers to the rural sector. The success of Montgomery Ward and Company, and later Sears, Roebuck, and Company, reflected the Industrial Revolution’s innovations in mass production and printing. In addition, by offering low prices and guaranteeing the quality of the merchandise he offered, Ward became an industry icon. Such commitment to consumers is still the underlying notion in direct mail-order firms today. The company was not able to maintain its success into the late twentieth century, however. In 1985, Montgomery Ward and Company closed its cataloging department, and by the late 1990’s, the company had lost ground to low-cost competition from Wal Mart, K-Mart, and Target. Montgomery Ward and Company announced it was closing its stores on December 28, 2000, in one of the largest retail bankruptcy liquidations in U.S. history.
Bibliography
Baker, Nina Brown. Big Catalogue: The Life of Aaron Montgomery Ward. New York: Harcourt, Brace, 1956. Juvenile biography about Ward’s life.
Boorstin, Daniel J. “A Montgomery Ward’s Mail-Order Business.” Chicago History 2 (Spring-Summer, 1973): 142-152. Boorstin, a history professor, analyzes the economic, social, and political forces that allowed Ward to become successful in the mail order business during the late nineteenth century.
Herndon, Booton. Satisfaction Guaranteed: An Unconventional Report of Today’s Consumer. New York: McGraw-Hill, 1972. Explains how Montgomery Ward and Company modified and improved its catalog over time to meet the demands of its customers. States that Ward’s was the first business in the United States to use the concepts of merchandising and mass marketing in an effective manner.
Hoge, Cecil C. The First Hundred Years Are the Toughest: What Can We Learn from the Century of Competition Between Sears and Wards. Berkeley, Calif.: Ten Speed Press, 1988. Examines the management successes and hardships of Montgomery Ward and Company and Sears, Roebuck, and Company, emphasizing how both companies created modern marketing. Contains extensive bibliography.
Kaufman, Leslie. “Montgomery Ward to Close Its Doors After 128 Years in Retailing.” The New York Times, December 29, 2000. Addresses the demise of the company and provides a brief history of the retailer.
Latham, Frank B. 1872-1972, a Century of Serving Customers: The Story of Montgomery Ward. Chicago: Montgomery Ward Public Relations Department, 1972. Centennial history of Montgomery Ward and Company. Latham, former editor of Look, observes how the company adapted its cataloging and marketing campaigns in order to meet American consumer demands over the course of one hundred years.
Talaski, Karen. “Montgomery Ward Closes After 128 Years.” Detroit News, December 29, 2000. Provides a brief history of the rise and downfall of Montgomery Ward and Company. Article includes key dates in the company’s history.