A Brief History of Friction in Retail
The following is adapted from Friction: The Untapped Force That Can Be Your Most Powerful Advantage by Roger Dooley.
Friction — anything that increases the distance between consumer and purchase — is not a new concept. Way back in 1872, Aaron Montgomery Ward and his partner, George Thorne, came up with a way to make it easier for rural customers to access a wider range of products at better prices — a general merchandise catalog.
In the post-Civil War era in the United States, city dwellers could shop at department stores and other outlets. Rural residents weren’t so lucky. Their only option was to buy from small, local merchants. These merchants stocked far fewer items than their urban counterparts and charged higher prices.
Ward and Thorne suspected that a catalog enabling direct ordering and delivery of a multitude of products, at lower prices, would appeal to rural customers. They were right. Within three years, a simple price list had become a seventy-two-page catalog. By 1883, the firm’s catalog was 240 pages long and listed ten thousand items. The 1892 edition reached 568 pages and by the dawn of the twentieth century, Montgomery Ward was processing five-and-half million orders per year.
Montgomery Ward wasn’t the first mail order firm but, much as Amazon has tackled friction to become the dominant voice in e-commerce, Montgomery Ward demonstrated that making shopping easy could create explosive growth.¹
The Disrupter Disrupted
Montgomery Ward’s tenure at the top of the tree, however, was short-lived. In 1886, a jewelry company sent a Minnesota jeweler a shipment of watches that the jeweler claimed never to have ordered. The shipper didn’t want to pay for the return and convinced a local railroad station agent to buy the timepieces as a job lot for $12 each. The agent’s name was Richard Warren Sears.
Sears began selling the watches for $14 each and quit his job to devote himself full-time to the watch business. In 1888, he established the R. W. Sears watch company in Chicago and issued his first catalog. Needing a watch repair specialist, Sears brought in Alvah Roebuck and incorporated as Sears Roebuck. Soon, the firm began to add other products to its range.
If Montgomery Ward’s growth was impressive, Sears Roebuck’s was meteoric. Sears had a gift for copywriting, and by 1895 — a mere nine years after the disputed watch shipment — the company’s catalog consisted of 532 pages. By the turn of the century, Sears’s revenue edged ahead of Montgomery Ward’s. Ward’s never caught up.
How Friction Can Make the Difference Between Success and Failure
Both Montgomery Ward and Sears Roebuck prospered because they offered easy access to a wide range of products previously unavailable to the rural customer — they reduced friction. Filling in an order form took a lot more effort than today’s method of clicking “Buy Now,” but much less effort than traveling to a distant physical store.
In the 1920s, the competing companies began opening retail stores. Montgomery Ward stuck to its rural roots, while Sears turned in a more urban direction. Nonetheless, Sears didn’t emulate department store competitors by locating downtown. Once again, it focused on what was easiest for consumers. To best service a new class of customer, car owners, Sears located stores outside city centers, where it could offer plentiful free parking. By 1931, Sears was generating more revenue in stores than via its catalog.²
In their early decades, both Montgomery Ward and Sears pioneered low-friction ways to let rural Americans shop, and then used their positions of strength to serve a much broader market.³ Sears continued to prosper for many years to come, while Ward’s management made a series of poor choices, including failing to anticipate the post–World War II boom in the United States. Both, however, were eventually surpassed by a company that further reduced friction for the people they initially sought to serve.
While Sears moved aggressively to open stores in city suburbs, Montgomery Ward was slower to recognize the potential value of this market. Eventually, however, Ward followed suit. The revenue potential of urban areas was clearly bigger than that offered by dispersed rural customers, so that’s where the two chains opened stores.
Ironically, this left the rural base on which they had built their companies with the same traditional shopping options. They could shop by mail order from Wards, Sears, and other firms. They could shop at small “Main Street” stores with limited inventory and high prices. Or, they could travel to the city to shop at Sears or a traditional department store. The status quo in rural areas hadn’t altered much since Montgomery Ward and Sears Roebuck first introduced full-line mail order catalogs in the 1880s. This all changed when one merchant saw an opportunity to reduce the in-person shopping effort required of non-urban residents.
Sam Walton opened his first store in rural Arkansas in 1962. For a dozen years prior, he had owned and operated a “five-and-dime” store in Bentonville, Arkansas, and he decided it was time to experiment with a more ambitious concept by throwing open the doors of a larger merchandise store in Rogers, Arkansas. A second store soon followed, and the Wal-Mart (later simplified to “Walmart”) concept was born.
As the chain expanded in the following years, it favored stores in locations close to rural towns and small cities, but which offered easy access and plenty of parking. The chain also emphasized low prices, which its small-town competitors found hard to match. For “Main Street” stores in nearby communities, the impact of a new Walmart was devastating. Many small stores went out of business.
Taking a page from the mail order giants that preceded it, Walmart first built an impregnable base of rural stores. Then, it used the high-volume cost advantage gained from owning so many stores to open branches closer to big cities. Today, the firm operates almost 11,200 stores in twenty-seven countries.⁴
The cycle of disruption continues. Montgomery Ward and, later, Sears Roebuck, reduced friction for rural customers. Later, they abandoned their roots, chasing the business of a growing urban population. That left the door open for Sam Walton to bring rural customers a more convenient shopping experience, with a greater range of products, at lower prices.
Today, Walmart itself is subject to disruption by e-commerce giants such as Amazon and Alibaba. Shopping at a nearby Walmart is easy, but not as easy as ordering online and seeing goods appear at the doorstep a couple of days later. Walmart has recognized e-commerce as a serious threat and launched its own aggressive programs to drive mobile and e-commerce sales, as well as develop advanced retail technologies. Time will tell whether the retail behemoth can do a better job of reducing friction than Amazon or Alibaba, or whether a new player will enter the game and find ever more innovative ways of limiting friction.
For more advice on friction through the ages, you can find Friction on Amazon.
Roger Dooley is an author and international keynote speaker. His books include Friction: The Untapped Force That Can Be Your Most Powerful Advantage and Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing. He writes the popular blog Neuromarketing as well as a column at Forbes.com. He is the founder of Dooley Direct, a consultancy, and co-founded College Confidential, the leading college-bound website.
 Much of the early history of Sears, Montgomery Wards, and the evolution of retail comes from my friend, entrepreneur, and business historian, Gary Hoover (https://www.linkedin.com/pulse/robert-brooker-unsung-warrior-one-greatest-battles-business-hoover/, much more at https://hooversworld.com/).
 Pruitt, S. (2018, October 16). An Ode to the Massive Sears Catalog, Which Even Delivered Houses by Mail. Retrieved February 14, 2019, from https://www.history.com /news/sears-catalog-houses-hubcaps
 Much of the early history of Sears, Montgomery Wards, and the evolution of retail comes from my friend, entrepreneur, and business historian, Gary Hoover (https://www.linkedin.com/pulse/robert-brooker-unsung-warrior-one-greatest-battles-business-hoover/, much more at https://hooversworld.com/)
 Walmart. (n.d.). Our Business. Retrieved February 14, 2019, from https://corporate.walmart.com/our-story/our-business