On December 28, 2000, the Montgomery Ward Corporation, after a half-century of turmoil and reinvention, finally threw in the towel and declared bankruptcy. In our American capitalist society our corporations can have a major effect on the course of our social development. They become an integral part of our culture, and in the late 19th and early 20th centuries, none more so than Montgomery Ward. Essentially the Amazon of its day, Montgomery Ward created a new type of retailing, launching copycats that have since come to dominate the American shopping landscape.
It all began in 1872 when traveling salesman Aaron Montgomery Ward had an idea. Instead of asking people in rural areas to go to the nearest town where they would have limited selection of products at inflated costs, he would centralize the operation and allow them to order their products by mail and pick them up at the nearest train station. He could afford to offer better quality products at competitive prices because he wouldn’t have the overhead of operating retailers in far flung towns. After a false start and finding products and partners, Ward had his first 163 item catalog, which was really just a single sheet of paper, ready to send to his prospective clients.
Much like when Amazon introduced their innovative Prime service to court customers who wanted faster shipping, Ward found that he had unheard of customer issues to address. While his customers were impressed with the vast selection they now had access to, they found it concerning and worrisome to purchase products sight unseen. To remedy this, Ward created a money back guarantee for his products, which was enough to earn the trust of potential customers and was key to growing the business. In just over a decade, the catalog grew from 163 items to over 10,000. Ward’s business was so revolutionary that it wasn’t until 1896 that his biggest competitor, Sears Roebuck, got into the catalog business.
By the 1940’s, Montgomery Ward had successfully moved out of the catalog business and into the new world of big retail. They were so large and intertwined with the commerce of the nation that in 1944 when Montgomery Ward workers were striking, President Roosevelt nationalized the company and put them back to work as the organization was too important to let linger. The 1940’s would be a high point for the company, as they never found a way to properly settle into the fast-growing suburban America movement in the 1950’s. As other big box retailers set up stores in suburban malls, Ward stuck to their earlier strategy of having smaller stores downtown. This would ultimately place them at odds with the big retailing movement and prove their ultimate undoing.
The company changed hands several times and even endured name changes. There were ups, like when their new electronics department - dubbed “Electric Avenue” - posted huge returns, and downs, like when the company purchased a northeastern chain of competitors only to find them unprofitable and shut them down a few years later. After a rebrand from Montgomery Ward to just Wards, the company had an especially bad Christmas season in 2000 and on December 28 declared themselves unable to continue business. Their remaining 250 locations were closed and 37,000 workers lost their jobs. The company that had invented modern retailing had proven itself unable to keep up with the times, and no amount of history and former glory could keep the doors open for a business that just didn’t make sense anymore.