MAIL-ORDER HOUSES

MAIL-ORDER HOUSES. Mail-order houses, along with department stores and chain stores, were the most important innovations in retailing institutions during the late nineteenth century. Unlike the other two, however, mail-order houses were essentially a unique American phenomenon in their extent and significance. Indeed, because the majority of Americans still lived in rural settings before the 1920s, they often first experienced the emerging national consumer culture through the medium of the mail-order catalog—or, as many called it, the "wish book."

Montgomery Ward and Sears

Before the 1860s a few firms (for example, patent medicine vendors) advertised the availability of their wares by mail in newspapers and agricultural journals, but general

merchandise mail-order houses were first established after the Civil War. During the 1870s Augusta, Maine, became host to a number of nationally circulated periodicals, like E. C. Allen's People's Literary Companion and P. O. Vickery's Comfort. These were known as mail-order magazines because they were read mostly for—and derived the bulk of their income from—advertisements; many of these magazines flourished for decades. More important, however, was Montgomery Ward, the first mail-order house to use catalogs as its primary promotional tool. Founded by Aaron Montgomery Ward and his brother-in-law in 1872 and based in the railroad hub of Chicago, where it was able to take full advantage of the burgeoning national transportation infrastructure, Montgomery Ward's was closely affiliated with the Patrons of Husbandry, better known as the Grange movement. A widespread animus against local merchants and their country stores, which usually featured overpriced, small, and limited inventories, prompted agrarian attempts to avoid "parasitic middlemen" in the retail trade. By the early 1890s the Montgomery Ward general catalog had become hundreds of pages long and offered nearly 25,000 items for sale.

Of the many firms that quickly followed Montgomery Ward into the mail-order trade, its most important competitor was the company founded by Richard W. Sears. Beginning in 1886 as a vendor of watches and reorganized several times through the early 1900s, in 1893 Sears began offering a general merchandise catalog that soon rivaled Ward's in size and variety. Moreover, Richard Sears was a master of promotional copy. Bucking the trend, he filled every available inch of ad space with text as well as illustrations. His catalog instructions were designed to make the farmer feel comfortable and secure, emphasizing liberal return policies ("Satisfaction Guaranteed"). With the addition of Julius Rosenwald as a partner in 1895, the company's administration and operations were increasingly systematized, and by the time it occupied a new forty-acre Chicago facility in 1906, Sears's sales were nearly $40 million annually, surpassing Ward's in total sales. The two leading mail-order houses would remain major national rivals for much of the twentieth century.

Some urban department stores, such as Macy's, followed suit with their own catalog sales departments, although with mixed results. Other mail-order houses specialized in particular types of goods, like the Larkin Company, a Buffalo, New York, soap manufacturer that began distributing nonperishable groceries by mail beginning in 1885, or National Bellas Hess, a Chicago clothing apparel concern. Spiegel, May, and Stern was founded in 1882 as a Chicago furniture retailer and moved into the mail-order trade in 1904; the company would gain national renown for its sales on installment credit (a practice previously known to rural folk mainly through the auspices of the itinerant peddler), helping prompt other mail-order houses to follow suit.

Improvements in Postal Service

Indispensable to the growth of the mail-order industry were improvements in the federal postal service. In 1875 a more favorable rate for bulk mailings of periodical and other "educational" literature was established and was lowered by half again a decade later—a boon to mail-order magazines and smaller catalogs. During his tenure as postmaster general in the early 1890s, the department store magnate John Wanamaker authorized the first experiments with rural free delivery (RFD) of mail, a system that became fully national by 1902. Even more important, Wanamaker and others campaigned for the creation of a parcel post system to ease the restrictions on rural deliveries. Most shipments were still handled by a small number of powerful express companies, whose welter of regulations and high prices hampered growth and efficiency, and farm customers had to make the often arduous trek into town to pick up goods that they had ordered. The steadfast opposition of local merchants and the express companies to a federal parcel post system, however, delayed its adoption until 1913.

In an age sensitive to the charge of monopolistic privilege, the major mail-order houses carefully avoided leading the push toward parcel post, but the system proved doubly beneficial to them: not only was it less expensive and more convenient for customers, but it also significantly dropped the cost of distributing catalogs. Parcel post reform combined with rising farm incomes to make the period from 1910 to 1925 the golden age of mail order. Taken together, Sears and Montgomery Ward sold over $400 million of goods annually by 1925, and that same year Sears's mail-order sales alone accounted for over 2 percent of total farm cash income.

Retail Outlets and Specialized Mail Order

The two mail-order giants, however, saw the writing on the wall. The increasing personal mobility made possible by the automobile, the incursion of chain stores like J. C. Penney's into small-town markets, and the demographic trend toward an increasingly urban-based population all meant that rural mail-order sales had probably peaked. Beginning in the mid-1920s, each began to diversify operations to include retail outlets; by the 1950s, these stores would become their leading sources of income.

Mail-order retailing remained big business through the end of the twentieth century, but companies tended to thrive with more specialized niche marketing. The Sharper Image, L. L. Bean, and Victoria's Secret were all examples of using upscale mail-order appeals as a successful entering wedge into the enormous American consumer market. Although e-commerce barely accounted for 1 percent of total retail sales at the end of the century, its reliance on shipping goods ordered online using credit cards represented a lucrative new form of mail-order industry. Still, signaling the end of an era for many, Montgomery Ward and Sears discontinued their general merchandise catalogs in 1985 and 1993, respectively; when Ward's went out of business in 2000, the mail-order industry had lost its pioneer.

BIBLIOGRAPHY

Cronon, William. Nature's Metropolis: Chicago and the Great West. New York: Norton, 1991. A wide-ranging book with excellent sections on the significance of the mail-order industry for Chicago and its hinterlands.

Emmet, Boris, and John E. Jeuck. Catalogues and Counters: A History of Sears, Roebuck and Company. Chicago: University of Chicago Press, 1950. A still-classic work based on extensive research in company archives.

Smalley, Orange A., and Frederick D. Sturdivant. The Credit Merchants: A History of Spiegel, Inc. Carbondale: Southern Illinois University Press, 1973.

Strasser, Susan. Satisfaction Guaranteed: The Making of the American Mass Market. New York: Pantheon Books, 1989. Places mail-order houses in the context of the late-nineteenth-century revolution in retailing.

Scott P.Marler

See alsoPostal Service, U.S. ; Retailing Industry .

MAIL-ORDER HOUSE

A mail-order house is a retailer that offers goods for sale through catalogs, which, along with the ordered merchandise, are delivered via the mail service. The mail-order business was pioneered by retailer Montgomery Ward and 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. Initially called "The Original Grange Supply House," Montgomery Ward and Company offered 30 dry goods priced at one dollar or less and provided special terms of sale for Grange members. (The National Grange was an association of farmers throughout the United States.) Aaron Ward bought merchandise directly from wholesalers. Since he did not maintain a store building, his 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 to the rural United States more than merchandise; the mail-order houses were farm families' link to the greater consumer society 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. Mail-order houses offered customers convenience because customer purchases no longer had to be deferred for the next trip to a town. They also offered variety, as catalogers catered to a nationwide customer base and on-hand inventory included a multitude of products. Finally, they offered low prices—the mail-order houses bought merchandise at reduced rates from wholesalers. Fashions were no longer restricted to middle- and upper-class city dwellers with 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.

See also: Chain Store, Department Store, Montgomery Ward, Retail Industry, Sears Roebuck