If you’re interested in direct marketing, you'll probably share our curiosity about a book called Houses by Mail: A Guide to Houses from Sears, Roebuck and Company by Katherine Cole Stevenson and H. Ward Jandl. In a world where it can be a challenge to sell an inexpensive product, how did Sears manage to sell thousands of houses? We’ve excerpted a number of sections from Houses by Mail that we believe will be especially interesting to marketers.
Let's start with a look at the overall dimensions of the business. Sears launched their Modern Homes Department with a 44-page catalog in 1908 and operated it until 1940. According to Stevenson and Jandl, Sears had competitors:
The late 19th and early 20th centuries were ripe for entrepreneurs who sold architectural plans as well as the houses themselves. The Hodgson Company, Aladdin Homes and Montgomery Ward all had their start in the housing business between 1895 and 1910. Sears, however was the largest: Its sales reached 30,000 houses by 1925 and nearly 50,000 by 1930, more than any other mail-order company. In fact, its 1939 homes catalog claimed that “over 100,000 families or approximately half a million people are living in Honor Bilt Modern Homes today.” In its three decades of operation, Sears set an impressive record, making substantial contributions to 20th century housing in America.
Based Stevenson and Jandl’s compact history, there were four key reasons behind Sears’s success.
Sears offered house designs that matched popular American taste of the period.
Sears’s early success was based on its established reputation for quality at a reasonable price.
Speed and ease with which Sears’s homes could be constructed.
Sears’s success in selling houses was tied in large part to its attractive financing plans. Although initially Sears did not offer financial assistance for the purchase of its houses, by 1911 it had begun to offer loans. By 1918, Sears was able to offer credit for almost all the material, and sometimes, to advance some of the money required for labor.
In addition, a Sears house came with a guarantee ensuring sufficient material, safe delivery and a complete refund if the customer were not satisfied with the materials.
The Modern Homes Catalog
Sears, of course, made its name with the mail-order catalog, and it was with the catalog that Sears initiated the sale of houses, supplementing it with other methods only much later.
The 1908 Modern Homes catalog drew heavily on Sears’s reputation for reliability. The first pages refer to two banks that testify to the company’s integrity and credit. With its characteristic knack for self-promotion, the catalog trumpets cost savings and ease of construction in its slogans: “Build now as prices are greatly reduced.” “Our low prices for building these houses have amazed everybody in the building line.” “Our plans are more complete and simple than you can get from ordinary architects.” “Any carpenter or ordinary workman would understand them perfectly.” “A home, residence or building, built according to our plans and specifications, will make you a splendid investment which will bring you large returns.”
By 1912 the catalog had grown to 118 pages, increasing to 124 pages in 1913 and peaking at 146 pages in 1918.
Order fulfillment
Sears attempted to make ordering a home as easy as ordering an automobile, radio or piece of furniture. Typically, prospective customers would visit a sales office, peruse the latest Sears Modern Homes catalog and select a design that suited their space needs, design sensibilities and pocketbook. The catalogs contained everything from modest two-room cottages to eight- to 10-room residences, in a range of colonial, English, Spanish, Norman and other architectural styles.
Sears pre-cut the wood in lumber yards they owned.
The following materials and products were usually provided in the sales price as part of the total house package: millwork, cabinetry, lath, roofing materials, flooring, siding, building paper, downspouts, doors, window sash, shutters, hardware (in variety of patterns), nails, paint and varnish.
All shipping was done by rail; consequently, the largest concentrations of Sears houses are in the Northeast and Midwest, which were served by more rail lines.
Shipping dates were staggered to allow the materials to arrive about the time they were needed. The first arrivals were building paper and nails, lumber and frames; the last arrivals, about a month later, were the millwork and laundry tub. The number of separate parts, not including nails or screws, averaged about 30,000 in an ordinary house.
To sum up, Sears had several factors working in its favor: attractive house designs, a reputation for quality, financing, ease of construction and a guarantee. We were fascinated to learn that Sears provided loans—and financing was certainly a powerful sales driver. Taken together, these factors let Sears sell houses by catalog for 30 years.