The other day, we got a copy of the Montgomery Ward catalog in
the mail – and it brought back a lot of memories.
During the 1930’s, my mom worked at the Montgomery Ward store
on University Avenue in St. Paul. She was paid 29 cents an hour, which was
actually considered a decent wage at that time.
The first minimum wage in America was not passed until 1938,
and it was 25 cents an hour. In today’s dollars, that would be equivalent to
$4. It has been raised 22 times since that time, by 12 presidents. In 2014
dollars, the highest minimum wage occurred in 1968, when Lyndon Johnson got
it raised to $10.75 an hour ($1.60 an hour in 1968 dollars.)
My first job was in the same store that my mom had worked in
decades before. I started out at $1.32 an hour, 7 cents more than the minimum
wage. I started working there on April 24, 1964, and quit shortly after I
graduated from college in 1969. It doesn’t sound like a lot of money, but it
was enough to enable me to buy my first car AND put myself through college.
Sharon started working in the same store in 1966, when she was
still in high school, and she quit in 1976, when she became a stay-at-home mom.
The retail industry today is drastically different than the industry it was in 1964, when I first started working. Oddly enough, the industry has, in many ways, returned to its roots.
Chicagoan Aaron Montgomery Ward set out in 1871 to undercut rural retails by selling directly to farmers via mail order. Initially, things moved at slow pace, so much so that his partners decided to bail on the venture. He decided to move forward with distributing his catalog to rural farmers, even though most of his inventory was destroyed during the Great Chicago Fire. The first catalog for Montgomery Ward was distributed in 1872 and was an 8-by-12-inch single-sheet price list, which listed 163 items for sale. Ward wrote the catalog.
Illinois Grange
A
break occurred for Ward when the Illinois Grange decided to name Ward its
purchasing agent. This gave Ward access to mailing lists, and his
business began to grow. Running short on capital, Ward turned to his
brother-in-law, Richard Thorne, who invested in the company and became a
partner, managing the day-to-day aspects of the business.
1875 Slogan
The
company continued to grow because Ward offered goods to rural communities that
they could not find elsewhere. In 1875, Ward started using the slogan
"Satisfaction guaranteed or your money back," with great success.
During this time, Ward also became active in the community, for which he gained
much recognition, especially for his work in establishing parkland along Lake
Michigan.
The Wish Book
By
1883, Montgomery Ward's catalog had gained much steam and was even dubbed
"The Wish Book." The catalog was 240 pages and had 10,000 items.
Unfortunately, in 1896, others began to take note of Ward's success, and
competition entered the playing field. The first serious competitor was Alvah
Roebuck, co-founder of Sears, Roebuck and Co., who mailed out his catalog.
Catalog Warehouse
Because
of large demand and sales of more than $8.5 million, Montgomery Ward opened a
catalog warehouse in Chicago known as Montgomery Ward & Co. Catalog House.
It was the company headquarters until 1974 and continues to be a historic
landmark.
First Retail Outlet
In
1908, Montgomery Ward opened its first retail outlet in Plymouth, Indiana. By
1928, it was operating more than 244 stores. Its flagship store was on Michigan
Avenue in Chicago between Madison and Washington streets. After World War
II, Montgomery Ward was the third-largest chain of department stores in the
country.
Downfall
The
company continued on a popular path until 1950, when Americans began settling
in suburbia, and malls started sprouting up everywhere. Montgomery Ward
thought it too expensive to invest in these areas, and soon its catalog
business was declining. The company soon merged with Container Corp.
of America and became Marcor Inc. In the 1970s, the company continued to
struggle and was acquired by Mobil Oil, which brought great cash infusion. The
company decided that after 113 years, it was time to close the catalog
business. Unhappy with the arrangement, the company's management undertook a
successful $3.8 million leveraged buyout by 1988.
Unfortunately, in the 1990s, Montgomery Ward lost ground to competitors such as Wal-Mart and Target. In 1997, the company filed for bankruptcy. In 2000, it formally announced it was going out of business, after seeking help from General Electric. In 2004, the company was resurrected in Cedar Rapids, Iowa, as an online retailer and continues with diversified store offerings throughout the nation.9:16
https://careertrend.com/montgomery-wards-history-13635908.html
Montgomery Ward prospered because the company made it easy for
rural customers to order merchandise by mail, instead of traveling into large
cities to shop. That same philosophy has
also helped a more modern company to thrive.
Its name is Amazon.
On
July 5, 1994, Bezos initially incorporated the company in Washington state with the name
Cadabra, Inc. After a few months he changed the name to Amazon.com, Inc,
because a lawyer misheard its original name as "cadaver". In its
early days, the company was operated out of the garage of Bezos's house on
Northeast 28th Street in Bellevue, Washington. In September
1994, Bezos purchased the domain name relentless.com
and briefly considered naming his online store Relentless, but friends told him
the name sounded a bit weird. The domain is still owned by Bezos and still
redirects to the retailer.
Bezos
selected the name by looking through a dictionary; he settled on
"Amazon" because it was a place that was "exotic and
different", just as he had envisioned for his Internet enterprise.
The Amazon River, he noted, was the biggest river in the world,
and he planned to make his store the biggest bookstore in the world.[ Additionally, a name that began
with "A" was preferred because it would probably be at the top of an
alphabetized list. Bezos placed a premium on his head start in building a
brand and told a reporter, "There's nothing about our model that can't be
copied over time. But you know, McDonald's got copied.
And it's still built a huge, multibillion-dollar company. A lot of it comes
down to the brand name. Brand names are more important online than they are in
the physical world."
After reading a report about the
future of the Internet that projected annual web commerce growth at 2,300%,
Bezos created a list of 20 products that could be marketed online. He narrowed
the list to what he felt were the five most promising products, which included:
compact discs, computer hardware, computer software, videos, and books. Bezos
finally decided that his new business would sell books online, because of the
large worldwide demand for literature, the low unit price for books, and the
huge number of titles available in print. Amazon
was founded in the garage of Bezos' rented home in Bellevue, Washington. Bezos'
parents invested almost $250,000 in the start-up.
In July 1995, Amazon opens as an
online bookseller, selling the world's largest collection of books to anyone
with World Wide Web access. The first book sold on Amazon.com was Douglas Hofstadter's Fluid Concepts and Creative Analogies:
Computer Models of the Fundamental Mechanisms of Thought. In the first
two months of business, Amazon sold to all 50 states and over 45 countries.
Within two months, Amazon's sales were up to $20,000/week. In October
1995, the company announced itself to the public. In
1996, it was reincorporated in Delaware. Amazon issued
its initial public offering of stock on May 15,
1997, at $18 per share, trading under the NASDAQ stock
exchange symbol AMZN.
Barnes &
Noble sued Amazon on May 12, 1997, alleging that Amazon's claim
to be "the world's largest bookstore" was false because it
"...wasn't a bookstore at all. It's a book broker." The suit was
later settled out of court and Amazon continued to make the same claim. Walmart sued Amazon
on October 16, 1998, alleging that Amazon had stolen Walmart's trade secrets by
hiring former Walmart executives. Although this suit was also settled out of
court, it caused Amazon to implement internal restrictions and the reassignment
of the former Walmart executives.
In 1999, Amazon first attempted to
enter the publishing business by buying a defunct imprint, "Weathervane", and
publishing some books "selected with no apparent thought", according
to The New Yorker. The imprint quickly
vanished again, and as of 2014 Amazon representatives said that they had
never heard of it. Also in 1999, Time magazine
named Bezos the Person of the Year when it recognized
the company's success in popularizing online shopping.
Today, Jeff Bezos is the richest man
in the world, with a net worth of $200 billion. The market valuation of the
company that he started in his garage is now over $1 trillion, and some
analysts are predicting that will be worth more than $2 trillion in the near
future.
https://www.fool.com/investing/2020/07/31/analyst-predicts-amazon-will-hit-2-trillion-valuat.aspx
As shopping centers became more popular in the 1970’s and 1980’s, the thought of going to the mall, especially during the Christmas season, convinced a lot of people that it was easier to shop on line.
If you order from Amazon today, your
order typically arrives in a few days. If you are not satisfied with your
purchase, the company will cheerfully refund your money, which means that the
business model of Montgomery Ward, “satisfaction guaranteed or your money back”,
is still in effect today.
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