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Ward, (Aaron) Montgomery

company ward’s consumers store

B. February 17, 1844

D. December 8, 1913

Birthplace: Chatham, New Jersey

Montgomery Ward created the first modern mail-order company in 1872 when he sent out a single-page price list to the members of the Patrons of Husbandry, an association of farmers commonly known as the Grange. Ward used his experience as a salesman in Chicago and Saint Louis during the 1860s to learn what consumers wanted: quality goods at affordable prices. By marketing his goods through a catalog, Ward disseminated the fashionable garments of the upper classes to lower-class and rural Americans.

During the last half of the nineteenth century, farmers made their purchases at the general store. Shipping expenses and middlemen raised the prices of the goods, and store owners often raised prices further because there was nowhere else for customers to shop. Ward realized that, by eliminating the middleman and purchasing in volume, he could sell goods directly to consumers at greatly reduced prices.

Before he could pursue his idea, he had to overcome two obstacles: lack of capital and the distrust of consumers. With the help of partners, Ward pooled $1,600 and published his first price list in 1872. To earn the trust of consumers, Ward enlisted the help of the Grange. Ward’s became the official supplier for the farmers’ fraternal organization. He printed signed testimonials from secretaries of Granges in the catalogues. To help foster the confidence needed to entice farmers to buy goods without seeing them, Ward offered a no-risk satisfaction guarantee. He continued to build relationships with customers by giving his personal attention to the correspondence he received from them.

Ward’s efforts to earn the trust of consumers paid off, and the company grew at a rapid pace. By 1884 the catalog consisted of 240 pages complete with illustrations. Families referred to it as the “wish book” and used it to purchase necessities as well as luxuries.

Few changes occurred in the company over the next decades. In 1926 Ward’s opened its first freestanding retail store in Plymouth, Indiana. With success in Plymouth, the company launched more stores and in 1961 adopted a revolving credit plan. In 1968 it formed Marcor after merging with Container Corporation of America, and Mobil Oil Corporation acquired the new company in 1976.

1985 was a year of change for Ward’s. The company adopted a new marketing strategy in which it tried to transform its reputation as a mass merchandiser into a group of specialty stores including Electric Avenue, the Apparel Store, and Home Ideas. In an effort to concentrate on the new retail strategy, Ward’s discontinued its catalog. Senior management, encouraged by the success of the specialty store strategy, bought out the company for $3.8 billion in 1988.

The 1990s held more changes for Ward’s. In 1997 the company filed for bankruptcy shortly after it revised it marketing strategy to “brand” Ward’s as an entire shopping experience. After the bankruptcy filing, the company restructured its operations, and by the end of 1999 it opened forty-three new prototype stores in thirteen states. Although the company seemed to be regaining its footing in retail, it closed all of its stores in 2000.

Montgomery Ward’s innovations in direct-mail retail have been copied by thousands of other merchants. Almost every imaginable form of merchandise is sold through direct mail, and the no-risk satisfaction guarantee has been adopted by traditional and nonstore retailers alike.

Ward, Aaron Montgomery - Overview, Personal Life, Career Details, Social and Economic Impact, Chronology: Aaron Montgomery Ward [next] [back] Warburg, Otto (Heinrich)

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