Sears, Roebuck & Company is one of the leading and oldest departmental chain stores in the United States. The firm, which many Americans simply refer to as Sears, operates in more than 600 locations across America (“”Sears Holdings Fourth Quarter 2016 Earnings Release””). Whereas Sears, a division of Sears Holdings, is now facing difficult times, it has clearly come a long way from its modest beginnings in Chicago, Illinois. This article explores the history of one of the most emblematic institutions in America and examines the causes for its initial victories. Establishment: Who and where
In 1886, a young man by the name Richard Warren Sears who was employed by the Minneapolis and St. Louis Railway as a Minnesota-based Station agent received a shipment of gold-filled watches from a Chicago jeweler (“Narrative History of Sears”). The watches were originally intended for a jeweler in the Redwood Falls area of Minnesota, but he rejected the shipment. Sears, who in his free time doubled up as a coal and lumber merchant, decided to purchase the watches for resale. After making a healthy profit selling the watches to his fellow station agents, Sears decided to order even more watches and continue reselling them (“Narrative History of Sears”). Later the same year, Sears launched the R.W. Sears Watch Company, which was engaged in the sale of watches via mail order catalogs (“Narrative History of Sears”).
In 1887, Sears decided to shift operations to Chicago where after advertising for a watch repairer, he recruited a man named Alvah C. Roebuck. Both men were still in their twenties, and this meeting marked the beginning of what was later to become a great partnership. At this point, the company was still engaged in mail-order sales of jewelry and watches, but in 1888, Sears launched the company’s first catalog (“Narrative History of Sears”). In 1889, Sears decided to sell his business, but some years later, he joined hands with Roebuck to start-up another mail-order business, which in 1893 was incorporated under the name Sears, Roebuck, and Company.
Reason for the company’s foundation
At the time of Sears’ establishment, most rural American farmers sold their crops on a cash basis and bought supplies from general stores in those rural areas. However, most of these purchases were made on credit and at exorbitantly high prices. For example, in 1891, the wholesale price of a barrel of flour was $3.47, but the same item retailed for $7, which represented an increment of 100% (“Narrative History of Sears”). Additionally, the range of goods from which shoppers could select at these general stores was very narrow (“Narrative History of Sears”). The need to provide an affordable alternative to farmers who were in uproar at the blatant exploitation by middlemen coupled with the paucity of options in the general stores were the driving forces behind the establishment of Sears.
Initial Strategies and Vision
Sears’ initial vision was to provide an alternative to the overpriced and understocked general stores. The company sought to offer affordable relief to the rural farmers, a fact evidenced by the company’s motto “Shop at Sears and Save” (“Narrative History of Sears”). Sears employed two main strategies to accomplish this goal, the first of which was published catalogs with a variety of goods at explicitly stated prices. The second strategy was free delivery to even the remotest rural areas, which solved the problem of availability.
Reasons for initial success
The company’s early prosperity was attributable to two main reasons. One, Sears offered lower prices for goods, which meant that poor rural farmers could save a coin or two and thus they naturally flocked there. The second reason for its massive success was that Sears was far more convenient than the general stores. By delivering various goods to even the remotest of places at no additional cost, Sears made shopping a hassle-free experience irrespective of the number of items one desired.
“A Narrative History of Sears.” Sears Archives Home Page, www.searsarchives.com/history/index.htm. Accessed 15 Apr. 2017.
“Sears Holdings Fourth Quarter 2016 Earnings Release.” Sears Holdings Corporation, searsholdings.com/docs/investor/eap/q4-2016-shc-earnings-release.pdf. Accessed 15 Apr. 2017.