The history of US
consumerism starts with the Sears Roebuck mail order catalog. Yes, the very same
Sears that is struggling to emerge from bankruptcy today. But 125 years ago the
company was every bit the disruptive innovator. A brief summary of how that
happened:
·
Mail order became viable in the late 1800s because of the
expansion of the US rail system, post office regulations that allowed for
catalog mailers at 1 cent/pound, and Rural Free Delivery.
·
The first Sears catalog was published in 1894 with the slogan
“The Cheapest Supply House on Earth”.
·
Its target audience was rural America, which in 1900 was 60% of
the US population. This was a deeply underserved community, often with just a
thinly stocked general store to supply all their needs.
·
The 1903 catalog added the commitment of “Your money back if you
are not satisfied”, reassuring customers that buying a product sight-unseen was
a viable way to shop.
We recently bought a 1920
Sears catalog from an eBay seller. Printed in late 1919, it is a fascinating
snapshot of American life 100 years ago. And, at 1,493 pages, it is a
remarkably wide-angle view of that image.
In studying this early
bible of the American consumer, three points struck us as particularly salient
when comparing 1920 to 2019:
#1: The comparison to
Amazon.
·
Our catalog was published 25 years after Sears began its mail
order business; Amazon is 25 years old today.
·
The scope of the Sears offering in 1920 was every bit as vast as
Amazon’s is today. The company offered everything from men’s/women’s/children’s
clothing to furniture, appliances, jewelry, home entertainment, toys, and even
entire houses and farm buildings.
·
Sear’s merchandising method was exactly the same as what you see
on Amazon’s website. Every item for sale had a picture, description, and price.
The catalog is organized by the type of product offered for sale, something
akin to “If you like this item, you might also like this…”
·
One key difference: Sears offered credit on expensive items. If,
for example, you wanted to buy a “New Freedom” coal/wood stove, you could pay
$86.50 ($1,100 today) or make a first payment of $10 and then $7.50/month
thereafter until you had paid $95.50. That’s a 7.1% annualized interest rate,
in case you were wondering. Amazon, of course, takes credit cards.
Conclusion: Sears was
actually a more ambitious business model than Amazon when it started. On day one, it was
already selling a wide array of products – not just books. In terms of consumer
offerings, Amazon now is right where Sears was in 1920. Yes, there are more
SKUs on the website, but in terms of what people needed in 1920 the Sears
catalog is remarkably complete.
#2: Early stage technology.
·
The new technologies in 1920 were electric-powered appliances
and phonograph players. Radio was still some years off – the only items in the
1920 catalog were Morse code transceivers.
·
A 110-volt vacuum cleaner retailed for $57.50 – $68.00 ($740 –
$870 today). For reference, a top-rated vacuum on Amazon goes for $70 today.
·
A hand-crank record player went for $30 (basic tabletop) to $225
(solid wood standup), or $385 – $2,900 today. A Bluetooth speaker today goes
for about $20.
·
A basic bicycle sold for $53, or $680 in today’s dollars.
Our takeaway: the big
difference between 1920s technology and today is how quickly prices come down
as demand rises. Part of that is related to infrastructure; for example, in 1920
only 35% of American homes had electricity but by 1929 68% were wired for
power. That, plus the disruption created by World War II, explains why vacuum
cleaners remained expensive and adoption rates remained below 50% until the
late 1940s. The rest, of course, is globalization, both in terms of supply and
demand.
#3: A big idea can go a
long way.
·
Our 1920 catalog is a relatively early manifestation of a
business that continued to prosper and grow for another +50 years. In 1974, at
the height of its powers, Sears built the tallest building in the world in
Chicago to house its home office.
·
The company started opening retail stores in the 1920s,
predominantly in urban areas to augment its rural business, and eventually had
thousands of retail locations. It built its own brands like Craftsman tools,
Kenmore appliances and DieHard automotive batteries.
·
In 1931 Sears created Allstate Insurance and by 1934 it had
agents in every store. In 1981 it added broker Dean Witter and real estate
company Coldwell Banker. In 1985 it created the Discover credit card. It was
even an early Internet adopter, developing the Prodigy system with IBM.
The lesson here: even if
Sears is now a tiny shadow of its former self, it pays to remember this company
had an almost 100 year run of success. It survived and prospered through 2 world wars and the
Great Depression, living long enough to benefit from the post World War II
boom. All from one big idea: a mail order catalog.
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The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation. [Jim Quinn - PO Box 1520 Kulpsville, PA 19443] or Paypal
