Montgomery Ward - Business in United States of America
Identification: Retail department store
Date: Founded in 1872
Significance: Montgomery Ward pioneered mail order retailing during the 1870’s and established a company that later became one of the largest department store chains in the United States.
As a young dry-goods salesman in the Midwest, Montgomery Ward experienced firsthand the economic difficulties of rural and small-town Americans, who often endured high prices and limited choices when purchasing consumer goods. Ward conceived a business model in which goods would be purchased from manufacturers in large quantities to reduce per-unit costs and sold by mail, taking advantage of proliferating railroad lines to deliver orders to rural areas. With the assistance of partner George R. Thorne, Ward established Montgomery Ward and Company in Chicago in 1872, publishing a single-page price list of hardware items that served as the first catalog.
The business grew rapidly during its first few years of operation, as its volume of orders grew exponentially, aided by the relatively low prices Ward charged for his merchandise and his money-back guarantee to customers dissatisfied with their purchases. Rural residents no longer had to rely on local merchants and traveling jobbers for goods; instead, they enjoyed access to a wider variety of items as the company’s catalog grew from year to year, reaching 150 pages by 1876. Despite the emergence of competitors such as Sears, Roebuck and Company by the 1880’s, Montgomery Ward continued to grow into the twentieth century, attaining gross annual sales of $1 million by 1891 and $40 million by 1913.
Throughout the early twentieth century, Montgomery Ward continued to challenge its chief competitor, Sears, Roebuck, for dominance of the mail order market. Its catalog, which became known as the “wish book” (a name later adopted by Sears) weighed over four pounds by the early 1990’s and was mailed to millions of customers across the United States. Known simply as “Wards,” the company and its catalog exerted a significant influence on American culture during the early twentieth century. In 1939, Wards employee Robert L. May created the popular song “Rudolph, the Red-Nosed Reindeer” as part of a Christmas promotional campaign.
Montgomery Ward joined Sears and other competitors in entering department store retailing during the early twentieth century, opening its first department store in Plymouth, Indiana, in 1926. The company lagged behind its competitors, however, in moving its stores from downtown to suburban locations during the post-World War II era, and by the 1960’s it had lost a significant share of both the department-store and mail-order markets. Company profits continued to decline during the late twentieth century, as discount and Internet-based retailers began to replace traditional department stores in the retail sector. The company filed for bankruptcy in 1997 and by 2001 was defunct, reemerging in 2004 as an online retailer.
Holland, Thomas W. More Boy’s Toys of the Fifties and Sixties: Toy Pages from the Great Montgomery Ward Christmas Catalogs, 1950-1969. Waterloo, Ont.: Windmill Press, 1998.
Kaufman, Leslie. “Montgomery Ward Closes Its Doors.” The New York Times, Dec. 29, 2000, p. C1.
Sobel, Robert. When Giants Stumble. Paramus, N.J.: Prentice Hall, 1999.
See also: advertising industry; catalog shopping; Christmas marketing; International Brotherhood of Teamsters; Retail trade industry; Warehouse and discount stores.