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Sears, Roebuck and Company

stores store catalogs merchandise

Richard Warren Sears, one of the pioneers of mail order, contributed to the fashion industry by introducing new strategies for marketing apparel. He entered into the mail order business in 1886 when he founded the R.W. Sears Watch Company in North Redwood, Minnesota. As the middleman between watchmakers and the railroad station managers who sold the watches, Sears concentrated on low profit margins, rapid turnover, and high volume. This strategy was successful because he supported it with extensive advertising to attain a wider customer base.

In 1887 he moved the company to Chicago and took on Alvah Curtis Roebuck, a watchmaker, as his partner. Two years later, they sold the business for $70,000, and started a new mail-order business. The new venture sold watches and other jewelry through a catalog which featured satisfaction guarantees and extravagant product claims written by Richard Sears. By 1893 the company was selling merchandise ranging from clothing and china to fishing tackle and firearms. In that same year, the company adopted the name of Sears, Roebuck and Company.

In 1895 Sears, Roebuck and Company produced a 532-page catalog with a rapidly growing circulation. In 1907 the company distributed more than 3 million catalogs, and by 1927 that number was 15 million. To meet its printing needs, Sears, Roebuck and Company constructed its own printing plant in 1903.

Richard Sears used several techniques to increase the distribution of catalogs including advertising in magazines and setting up distribution networks. The networks were headed by a distributor, who received batches of catalogs. The distributor passed out the catalogs and received premiums based on the amount of sales resulting from the distributed catalogs.

In 1895 Julius Rosenwald bought into the company and became its vice president. He handled organization and administration, while Sears continued to focus on marketing. Roebuck resigned owing to poor health. The company went public when Sears and Rosenwald sold stock to acquire capital in 1906.

Robert E. Wood, who would later become president and board chairman of Sears, Roebuck and Company, led the company’s expansion into retail stores. By 1920 the United States had transformed from a rural to an urban nation, and customers were no longer limited to shopping from catalogs. Wood took advantage of this trend and opened an experimental store in the company’s Chicago mail plant in 1925. The store was so successful that he opened seven additional stores by the end of the year. By 1933 Sears, Roebuck and Company operated 400 stores.

In the 1930s store sales began to exceed catalog sales. To maximize store sales, Sears created a store planning and display department in 1932. The department designed new store buildings around the merchandise. By focusing on customer flow and the requirements of merchandise, the department designed the store from the inside out. The first store designed using this innovative concept opened in 1935 in Glendale, California.

By 1969 Sears was so successful that it began building the 1,454-foot Sears Tower in downtown Chicago, which was the world’s tallest building when it was opened in 1973. During the 1980s, the company expanded, and the retail portion of the business was renamed the Sears Merchandising Group. The parent company, Sears, Roebuck and Company also owned Allstate Insurance Group, Dean Witter Reynolds Organization, Inc., Cold-well Banker and Company, Sears World Trade, and the Discover Card.

During the 1990s, the company restructured. The Sears Merchandise Group shut the doors on many of its underperforming department stores, specialty stores, and catalog merchandise distribution operations. Then Sears divested Dean Witter, Allstate, Coldwell Banker, the Sears Mortgage Banking Group, and the Homart Development Company. At the same time, the company moved its corporate headquarters from the Sears Tower to Hoffman Estates, Illinois.

By the end of 1997, Sears operated 833 department stores and 1,325 furniture, hardware, and automotive parts stores. In Canada, it owned 110 full-line stores and eight furniture stores. In the 1990s, the company returned its focus to retail, the aspect of the business that had made it a successful company from the beginning. Although its origins lie in catalog retailing, in today’s society, Sears has found more profit in store retailing.

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