Wish Book Memories In The Digital Age

The history of catalog retail in the United States showcases the evolution of mail-order, e-commerce, and the emergence of modern consumer habits.

Mail-order catalogs trace their origins back to Benjamin Franklin, who produced the first one in the U.S. in 1744, featuring 600 books he had published.

However, it was in the 1830s that mail-order became a widespread practice. This period also saw the rise of iconic catalogs like those from Sears, Roebuck and Co. and Montgomery Ward. Tiffany & Co.'s “Blue Book” may have been the first in 1845, but Sears, Roebuck and Co. ultimately became the most prominent.

Founded in 1886 and launching their first catalog in 1894, Sears, Roebuck and Co. reached a remarkable milestone by 1916, mailing over 50 million catalogs each year. Their catalogs featured detailed images accurately engraved from photographs of the products, accompanied by thorough descriptions. A fun tidbit: Richard Sears personally wrote most of the catalog content until his retirement in 1908!

In 1896, the introduction of Rural Free Delivery by the U.S. Mail revolutionized mail-order catalogs. Suddenly, consumers had the option to purchase just about anything from the comfort of their homes. Sears, Roebuck and Co. distinguished itself by offering an extensive range of products, from houses to horseshoes, while other specialized catalogs also emerged as popular options.

During this period, catalogs for both business-to-business (B2B) and business-to-consumer (B2C) transactions became common. Sears, Roebuck and Co. effectively catered to both audiences; they distributed catalogs directly to consumers while also supplying merchants.

The aftermath of World War II saw significant suburban expansion and the construction of shopping malls, greatly transforming consumer culture in America. While consumerism began its journey after World War I, it truly gained momentum in the 1940s, 50s, and 60s.

Wages went up, which meant young people had more disposable income, and there was more leisure time than ever. This shift sparked a growing demand for consumer goods. In 1925, Sears, having previously relied only on catalogs, opened its first physical store. By the 1950s, they had established over 700 locations across the United States.

By comparison, J.C. Penney, which had focused solely on brick-and-mortar sales, introduced its first catalog in 1963. Instead of competing against each other, the in-store and catalog experiences complemented one another, ultimately boosting sales for both retailers.?

An interesting footnote to the J.C Penney story is Sam Walton.? Walton, a former J.C. Penney employee, opened the first Wal-Mart store in 1962 after several years in the discount retail business.? Walton would go on to author the next chapter in American retail history and, in the process, hasten the demise of Sears. ?

For those of us who remember, the Sears Catalog was an enormous book offering everything one could want. We would dog-ear the pages, circle items for our Christmas lists, and point out things we thought our parents would like too, even the "Good Better Best" concept for many products. It was the first comprehensive catalog of consumer goods.

Sears dubbed its 1933 Christmas catalog a “Wish Book,” an honorific customers extended to its basic catalog, which could run to more than 700 pages. The “Wish Book” name stuck.? The “Wish Book” became a beloved holiday tradition for millions, reflecting the evolving consumer trends of each decade. The expansive catalog offered a wide array of products, from toys and apparel to appliances and pianos.

In fact, it has been reported that President Franklin Roosevelt once remarked that he'd like to give every Soviet citizen a Sears catalog because it was an encyclopedia of the American dream.

For nearly a century, the Sears catalog revolutionized mail-order shopping. However, in 1993, the company shuttered its catalog division, succumbing to competition from discount retailers, such as Wal-Mart, and the rise of e-commerce.

Looking back, it seems fairly obvious to point out that today's flourishing internet retail business model is a 21st-century update of Sears' 20th-century mail-order model. It's also true that Sears was not the only department store that encountered difficulty combating this disruption.?

However, Sears' inability to evolve and adapt to changing consumer preferences ultimately doomed the once-dominant retailer. Ironically, Sears shifted to bricks-and-mortar retailing when the catalog business became unprofitable. This decision to discontinue the catalog is considered a major factor in Sears' decline, as it lost a key marketing tool and valuable customer data.

It would be easy to blame Amazon for Sears' downfall.? However, the truth is that the decline in Sears business started in the '90s. While it’s true that both Walmart and e-commerce presented fierce competition, Sears had a poor management team with a lack of strategic vision.? Even with the aforementioned competition that Walmart and the emergence of e-commerce represented, Sears had some advantages that extended beyond the catalog business, strong appliance brands, and footprint in shopping malls across the country.

Sears was a part-owner in Prodigy, an early graphical online portal founded as a joint venture with IBM and CBS in the 1980s. Prodigy was ahead of its time and even featured online advertising, with Subaru as an early adopter. ?Sears also owned Discover Card.? Discover was a no-fee credit card created by Sears in 1985 that could be used at Sears and other retailers.

The fact that Sears had all of these pieces in place by the mid1990’s is astonishing.? ?A full-line catalog business with strong brands, an online portal, a captive payment method, and a nationwide retail network should have been an enormous success.? In fact, if this sounds familiar it should.? This bears a striking resemblance to the business that Amazon has built over the last thirty years.

However, Sears failed to recognize changing consumer preferences as a competitive threat. In fact, Sears' catalog business had given the company a competitive advantage through direct sales to customers' doorsteps. This expertise could have proven valuable as Amazon later convinced millions to shop from home. Ironically, Sears dismantled these innovative capabilities just as Amazon was founded in 1994.

The lesson here is not that Amazon killed Sears, but that Sears failed to capitalize on the advantages it already possessed. Businesses should look closely at their existing strengths and consider how to transform them into something more than just what customers are asking for today. They may very well be ignoring untapped potential hiding in plain sight.

However, Amazon Outmaneuvered Sears In Several Important Areas:

Distribution: Amazon leveraged innovative warehouse and distribution technology to gain a competitive edge, while Sears relied on traditional large distribution centers and outdated communication systems.

Data: Amazon built data into a core competency, whereas Sears used consumer data more reactively to guide its growth strategy.

Business Model: Amazon focused on anticipating and delighting future customers, while Sears prioritized satisfying current customers.

Store Model: Sears anchored malls nationwide but failed to adapt as malls declined, unlike more nimble competitors.

Capital Investments: Sears invested only $3.3 billion in store improvements from 2005-2012, far less than competitors who outspent Sears five-to-one.?

Catalog Division: Sears' catalog-based model became unprofitable due to the high costs of physical catalog distribution.

Hardware & Appliances: Sears lost ground to Home Depot in hardware, and its appliance business shrank from over 40% of global appliance sales to just 3%.

Only The Paranoid Survive:

In summary, I'm reminded of a famous quote from former Intel CEO Andy Grove: “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”

In its heyday, Sears accounted for 1% of the entire US economy and two-thirds of Americans shopped there at least every three months. However, decades of mismanagement and poor decisions made Sears an afterthought as consumer preferences and shopping habits evolved. ?

Unlike rivals Macy's and Kohl's, which made smart marketing decisions and rebuilt their businesses for the digital age, Sears management decided to cut costs while competitors updated their stores and built up their digital businesses. As people gravitated to rival big box stores like Walmart and Target, which offered lower prices and more inventory, Sears failed to prioritize the in-store experience necessary to resonate with customers.

Despite Sears' considerable strength and advantages, its management failed for one simple reason, they disregarded the most fundamental principle in business:

The Only Constant Is Change