Sears

Martin Luther once said that a ploughboy, in a close relationship with God, could interpret and do God’s will better than a theologian.  Perhaps that is why there are more Lutheran small-businessmen than in any other denomination.

            Richard Warren Sears was born in 1863 in Stewartville, Minnesota, a rural town near Rochester that is just 5000 people even today.  The family moved to Spring Valley soon thereafter.  His dad was a wagon maker and blacksmith who did well and was on the town council.  But he lost his life savings in a market collapse, died 2 years later, forcing the teenage Richard to go to work for a railroad to help support family.  One day, his rail station had a merchant customer refuse a large order of watches.  Watches were considered a city luxury by farmers.  Richard made a deal to try to sell all those watches.  In six months, the super-salesman had sold every one and signed on a partner, Alvah Roebuck, who repaired watches.  They made money, moved to Chicago, then sold out.  Sears had observed that rural folks will buy only if it is cheap, the same observation of Sam Walton 80 years later.  He and Roebuck went into a mail-order business with Sears writing the catalog copy.  By 1896 it was 140 pages of folksy description.  Sometimes he was too glowing in his product descriptions and it came back to haunt him. “Honesty is the best policy,” he would say.  “I’ve tried it both ways.”

            Sears was targeting the most overworked market segment—farm wives.  His catalog held everything from dishes to clothes to kit houses (1904).  Using the postal system, he allowed them to buy things rarely seen in rural areas.  And by pressuring suppliers, he got prices very low.  And example is the cream separator.  They were typically $100.  Sears found one for $26 that was acceptable and came out with catalog models for $14 and $22.  Within a few years dairymen all over the country, formerly selling only whole milk, were selling cream separately with Sears separators. 

            But organizing and fulfilling orders was problematic.  When Roebuck fell into poor health and sold his share back to Sears (1895), Richard found a venture capitalist in his brother-in-law Rosenwald, who transformed Sears, Roebuck & Co. from a shapeless, inefficient, rapidly expanding corporate mess into the retailing titan of much of the twentieth century. He set up an assembly line to fill sales and a returns department. Richard Sears developed failing health in 1909 and quit his active role in the company.  He died in 1914 at his farm near Milwaukee.  His marketing genius lived on in the company through the 1970s. At its height around WW I, 5 million catalogs of 1200 pages held 100,000 items.  A good example of Sears’ impact was in refrigerators. There were once spring houses farmers dug to keep milk a second day, then ice boxes, but that required ice delivery. In 1918 Kelvinator invented a gas-cycle refrigerator.  Sears began to market it in the 20s and by 1930 was the leading marketer of refrigerators in America.  By the 20s the once rural marketing had turned urban as well with stores. FDR quipped that the way to cure a communist was to hand him a Sears catalog.  But the best indication of how influencial the company became was a story related by a Sunday School teacher.  The kids were asked, “Where did the Ten Commandments come from?” Answer: “From the Sears, Roebuck catalog!”