A Tale of Disruption: The Demise of Montgomery Wards

Hint: Do not talk about doing something, just do it.

Before they were department stores, Montgomery Wards and Sears were giant mail-order businesses. Wards, in the 19th century, was the larger of the two. Both were so large that at one point each had a railroad track in their main Chicago warehouse.

At that time, Americans lived primarily in rural areas. They would receive their “Montgomery,” or “Sears” catalog and order the items they desired, which would be shipped directly to the customer via the postal service.

Of course, the automobile and the suburbanization of Americans would change all that.

One man who saw the change coming was Robert Wood, an executive at Montgomery Wards. Wood believed they needed to build storefronts in the growing suburban areas. He attempted to convince the other Ward’s executives to make a change. When he told them his idea, he was fired. After all, who was he to tell the greatest retailer in the world that they had to change the entire structure of their business?

Meanwhile a man named James had the same realization as Robert. James worked in a small retail store in Wyoming. He had grown up in worse poverty than men on welfare today could fathom. He had no one to talk with about his idea, so he simply saved up and started building his first store.

He and Robert knew that selling merchandise through a chain of urban department stores would be more efficient and profitable than delivering them by mail. America would agree.

James Cash Penney’s store, or, J.C. Penney, would go on to dominate the market. Wood went to work for Sears and told them his idea; they wisely listened. And eventually, so did Montgomery Wards. But it was too late. They would never again catch either Penny’s or Sears.

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