Before Amazon, Sears Disrupted Retail

Posted by Richard on August 17, 2022

Back in May, Sears announced that it was closing roughly 100 stores, cutting the company’s footprint in half. Even those stores that survived the downsizing are likely living on borrowed time, and someday soon, Sears may fade into history. It’s hard to remember these days, but Sears revolutionized the retail industry and once ranked among the most successful companies in the world.

Founded in 1892, Sears, Roebuck and Co. initially focused on selling watches and jewelry. But the company moved aggressively to expand its product lineup. As with many disruptive companies, Sears leveraged emerging technologies and new ideas to offer goods at lower prices than the competition and the company won big.

Back in the late 19th century and early 20th century, folks living in rural areas were often forced to pay exorbitant prices at local general stores, typically on credit. Rather than setting standardized prices, local retailers typically set prices based on the creditworthiness of the customer. Have bad credit? Be prepared to pay more. Rather than setting up local general stores and basing prices on creditworthiness, Sears offered a large catalog from which customers could order products. Prices were transparent and published in the catalog.

Of course, making a sale is one thing, and delivering the goods another. Rather than building up local infrastructure in rural areas, Sears used the high tech of the day — railroad networks. After an order was received, the items were loaded onto trains and shipped to customers. By today’s standards, fulfilling an order was slow, often taking weeks. Back then, it was revolutionary.

Just as Amazon used the Internet to lower costs and offer a wider selection, Sears and its catalog offered folks in rural communities access to a wide product selection at lower prices. Sears would later build brick-and-mortar stores, but eventually fell behind more efficient competitors, like Walmart, along with tech-savvy companies like Amazon.