Sears, Roebuck and Company - Business in United States of America
Identification: Retail department store
Date: Founded in 1886
Significance: As one of the pioneers of the mail order retail industry and a leading retailer of the twentieth century, Sears, Roebuck introduced or popularized a number of innovative business practices in its efforts to adapt to changing markets.
During its early years, the Sears, Roebuck and Company sold only watches and other jewelry. However, its founders, R. W. Sears and Alvah C. Roebuck, quickly developed the company according to the mail-order retail model pioneered by Montgomery Ward, which used newly constructed railroad networks to ship a variety of goods at low cost to small towns and rural areas. Offering a steadily increasing variety of items in its annual catalogs, Sears, Roebuck provided cash-strapped Americans with an alternative to relatively expensive general stores and dry-goods merchants during the economic depression of the 1890’s, outstripping the sales volume of other mail-order houses. By the early twentieth century, the company offered thousands of items, ranging from the most modest of household goods to automobiles and homes.
After assuming a dominant position among mail order retailers serving rural markets, Sears, Roebuck began making inroads into urban retail markets, opening its first department store in Chicago in 1925. Several more stores in the Chicago area opened during the 1920’s and early 1930’s. Early Sears department stores proved successful, but they failed to match the market dominance of the company’s mail-order business, because they were competing with numerous established urban retailers.
The proliferation of suburban neighborhoods in the United States following World War II led to a shrinkage of both urban and rural retail markets, forcing Sears, Roebuck to alter its business plan. In addition to opening a number of large anchor stores in suburban shopping malls during the postwar period, the company sought to solidify its hold on mail-order retailing by establishing catalog stores in small towns. In these stores, some large items such as appliances could be purchased in-store, and other items could be ordered from catalogs with the assistance of salespeople. The company also began producing its own merchandise under various brand names, including the popular Craftsman line of hand and power tools. These and other efforts at diversification allowed Sears, Roebuck to remain competitive during the economic changes of the second half of the twentieth century and to become the largest retailer in the United States, a position that it would retain until the early 1980’s.
Sears, Roebuck also extended its diversification outside the retail sector, establishing the Allstate Insurance Company in 1931 and purchasing the Coldwell Banker real estate company in 1981. In the light of increasing consumer demand for revolving charge accounts, the company introduced the Discover credit card in 1985. In 2004, the Kmart discount chain purchased Sears, Roebuck and its various holdings. It continued to operate stores under both the Sears and Kmart brand names. Despite decreasing profits and a shrinking market share, Sears, Roebuck remained a powerful force in the global retail market during the early twenty first century.
Katz, Donald R. The Big Store: Inside the Crisis and Revolution at Sears. New York: Penguin, 1988.
Martinez, Arthur C. The Hard Road to the Softer Side: Lessons from the Transformation of Sears. New York: Crown Business, 2001.
Worthy, James C. Shaping an American Institution: Robert E. Wood and Sears, Roebuck. Champaign: University of Illinois Press, 1984.
See also: catalog shopping; Credit card buying; Retail trade industry; Wal-Mart.
Christmas marketing: Twentieth Century Developments
Catalog shopping: Technology and the Internet