Being an immigrant, I wasn't as familiar with US economic history as I was with that of other countries and regions. Therefore, I found this article, comparing Amazon.com with a much earlier vendor, very interesting.
The history of US consumerism starts with the Sears Roebuck mail order catalog. Yes, the very same Sears that is struggling to emerge from bankruptcy today. But 125 years ago the company was every bit the disruptive innovator. A brief summary of how that happened:
Conclusion: Sears was actually a more ambitious business model than Amazon when it started. On day one, it was already selling a wide array of products – not just books. In terms of consumer offerings, Amazon now is right where Sears was in 1920. Yes, there are more SKUs on the website, but in terms of what people needed in 1920 the Sears catalog is remarkably complete.
- Mail order became viable in the late 1800s because of the expansion of the US rail system, post office regulations that allowed for catalog mailers at 1 cent/pound, and Rural Free Delivery.
- The first Sears catalog was published in 1894 with the slogan “The Cheapest Supply House on Earth”.
- Its target audience was rural America, which in 1900 was 60% of the US population. This was a deeply underserved community, often with just a thinly stocked general store to supply all their needs.
- The 1903 catalog added the commitment of “Your money back if you are not satisfied”, reassuring customers that buying a product sight-unseen was a viable way to shop.
- The scope of the Sears offering in 1920 was every bit as vast as Amazon’s is today. The company offered everything from men’s/women’s/children’s clothing to furniture, appliances, jewelry, home entertainment, toys, and even entire houses and farm buildings.
- Sear’s merchandising method was exactly the same as what you see on Amazon’s website. Every item for sale had a picture, description, and price. The catalog is organized by the type of product offered for sale, something akin to “If you like this item, you might also like this…”
There's more at the link.
Obviously, the speed of delivery was far slower a century ago than it is today, but that's still a remarkable parallel in business history. It's particularly interesting because there was no national road network in those days. Interstate highways wouldn't come along until after World War II, and the pre-interstate main roads were often in very poor condition. When the US Army sent a convoy across American in 1919, it took 56 days to travel between Washington D.C. and San Francisco.
In the course of its journey, the convoy broke and repaired wooden bridges (14 in Wyoming), and "practically" all roadways were unpaved from Illinois through Nevada. The convoy travelled up to 32 mph (51 km/h), and the schedule was for 18 mph (29 km/h): to average 15 mph (24 km/h). The actual average for the 3,250 mi (5,230 km) covered in 573.5 hours was 5.65 mph (9.09 km/h) over the 56 travel days for an average of 10.24 hours per travel day ... 4 days had average speeds over 9 mph.
Again, more at the link.
No free second-day shipping over that transport network, that's for sure!
Peter
In the mid 1990s Sears saw decreasing catalog sales compared to in-store purchases, so they killed off the large catalog.
ReplyDeleteIf they would have pushed it online instead, Sears could be everything Amazon is today and more.
Yup.
ReplyDeleteSears would be Amazon now, if they'd only had the wit to see what was coming.
All Amazon did was take their business model, eliminate the brick-and-mortar store, and exchange a virtual catalog for the printed one.
But Victoria's Secret and PornHub pretty much took over the lingerie page concession.
I agree - unlike what many people say, the 'online revolution' ISN'T a new way of doing things, just a theme or rhyme on an old way coming around again.
ReplyDeleteInterestingly, I've read articles postulating that far from being a huge success, Amazon is actually one of the shakier big companies these days. it is hugely dependent on shipping rates outside of their control, which we are already starting to see change, and despite their size they are still a fraction of the size and revenue of established chains. For example, their revenue is about 1/10th of Walmart and at this point is still less than Kohl's.
I feel Amazon, while useful, is being overhyped as a technology company and therefore seen as bigger and stronger than it is. This is similar to the way that Tesla is overvalued - both companies have had only a few profitable quarters, yet are seen as bigger than their rivals who turn a profit every quarter.
Living on a farm after my Dad retired from the service in the late fifties and eary sixties -- a pension cushion and Mom working in town made living on a small dairy farm possible -- we often bought stuff from Sears. Prices were good and the catalog saved many a shopping trip to town. But their offerings were middle class bland and the discount stores like Walmart and Target ment you got stuff quickly and at a cpmparable price
ReplyDeleteNo national road network, but the rail system was complete. Mail went via train to the post office regional offices (conveniently located next to the rail depot). It's still the best way to move freight long distance.
ReplyDeleteSee also https://laststandonzombieisland.com/2019/09/06/happy-100-transcontinental-motor-convoy/
ReplyDeleteI lived the Sears Big Book Christmas Catalog as a child. Lots of imagination in that.
ReplyDeleteJohanthan H. Amazon total revenue was about $232 billion in 2018, with a $10.1 billion net. Kohls was about $20 billion revenue, and $1.3 billion net. Walmart is about $514 billion total.
ReplyDeleteAmazon smokes Kohls by about 10 times and is about 40% of Walmart.
The history of the Sears house is pretty interesting, at least to me. It was very much a "do it yourself" thing. The house would come on a rail car or in a box car. The buyer was responsible for getting the material from the RR to the home site. The "kit" included plumbing, wiring, windows, doors & lumber. And I just thought about this? Maybe a coal fire furnace???
ReplyDeleteSomewhere around here I have a facsimile 1904 Sears catalog. It does make for some fascinating reading. I would love to have shopped in their firearms department.
ReplyDeleteTwo things made rural life much easier. First, electrification (REA). Second, Sears and their competitors like Montgomery Wards.
ReplyDeleteAmazon seems aware of their vulnerability to shipping rates. I assume it's why they're building out their own shipping infrastructure, financing delivery companies to deliver orders and so on.
ReplyDelete