Many of us will be avoiding shopping with holiday crowds by buying online, so let’s take a look back at how mail order began.

Mail order originally came about because of the needs of rural residents. Until 1896, farmers had to pick up their mail in town, so when the postal service begin to experiment with “rural free delivery” (RFD), this offered new opportunities. The farmers made sure the roads were passable, and in return, the post office arranged for drivers to deliver the mail, thus saving farmers lost work time to travel into town. Within a few years, demand grew for delivery of items–tobacco, dry goods, medicine–that were not easily available in rural areas.

Aaron Montgomery began the world’s first mail-order business in 1872. He was a traveling salesman and realized that he could sell a wider variety of goods at better prices than what country stores were offering. His first catalog was one page long and offered 162 items. By 1883, Montgomery Ward was sending out 240-page catalogs that by the mid-twentieth century would grow to be more than 1000 pages.

Sears Roebuck & Company began in 1886 as a watch company. Richard Sears was a railway agent who bought up a shipment of watches that were being sent back by a jeweler. His success at selling the watches launched his business, and he was soon joined by watch repairman Alvin Roebuck. Their first catalog was published in 1893.

Delivery of packages by the postal service did not begin until 1913 after Congress passed into law the postal service’s right to deliver packages for a reasonable fee. Montgomery Ward and Sears had both started accepting orders by mail prior to the existence of parcel post but both saw business increase exponentially once they could rely on the more affordable postal system instead of private delivery services.

Other Early Catalogs

Hammacher Schlemmer started as a hardware store in the Bowery section of NYC in 1848; its first catalog came out in 1881. An early product that did well was a Motorist Touring Kit, sold in the early 1900s. There were not yet any service stations, so the kit contained what a driver would need to fix a flat tire or blown gasket on their “horseless carriages.”

Long before it became a lifestyle store for teens and young adults, Abercrombie & Fitch was a sporting goods store (1892). Its first catalog was mailed in 1909, and it was known for outfitting well-known outdoors people including Teddy Roosevelt, Charles Lindbergh, Amelia Earhart, and Ernest Hemingway.

September represents many things to Americans, but to the sales promotion industry, September is National Coupon Month–a good time to remind us of how much fun it is to bargain shop.

Not long ago, the only way to find a bargain involved a lot of time and effort. Suppose you found a Ford Taurus, a Maytag washer, or a pair of blue jeans you really liked… there were very few ways to price shop. You could compare prices by going from store to store, watch newspaper ads to see if companies were offering specials, or you could “let your fingers do the walking” to phone around on prices.

In general, consumers were more likely to buy near home (to save shipping costs) and often to pay a higher price for the item itself simply because an in-depth search was too difficult or time-intensive. The sales advantage went to the retailers who wooed the consumer into their stores.

Consumer Power
Today the consumer has the power, and this trend seems unlikely to stall any time soon. The major difference, of course, has been the customer’s ability to shop via the Internet. With a few keystrokes, we can find the best deal on a specific brand of almost anything.

In the past, mail order companies charged considerable sums for shipping and handling. Today most companies offer free shipping in order to be competitive. For example, since shoes are so fit-dependent, the online shoe store, Zappo’s, offers free shipping for orders as well as returns to increase their customer base.

Stores are moving away from coupon inserts in newspapers and taking the coupon programs online. These cents-off savings for consumers have been extended by “groupons.” Originally groupons were created to encourage consumers to help market a product; if you gathered a group of people to take advantage of something specific, your group qualified for a discount. Groupons became so successful that companies now offer the coupons to anyone, but they limit the numbers. The discounts offered are so good that the stores could go out of business if everyone took advantage of them.

Retail Power
One place where companies are benefiting is in knowing more about us. As companies track our shopping habits, they can now zero in on our interests in ways better than before. I am a fan of the University of Southern California so I visit their website now and then. When I open my facebook page, I am often greeted by an ad for a bicycle or bedroom slippers in USC colors.

And since we’ve all used “savings” cards at groceries for a long time, you may not have noticed that the coupons given you are now specific to your interests. You may have purchased some Purina dog food and some Pantene hair conditioner. When you check out, the coupons will be for products you’ve just bought (dog food, hair conditioner) but the coupon will offer a price advantage if you try a different brand.

Smartphone apps like Foursquare are also helping businesses by locating people in order to market to them. You check into a hotel and register your location with Foursquare in order to meet up with some business associates; the next thing you know, you are receiving free offers or discount coupons for restaurants in the area.

A television marketer says the day is coming when television commercials will be specifically targeted to who we are and what we generally buy. Maybe we won’t speed so quickly through those commercials with our DVRs.

But another technological development places the advantage fully in the customer’s court. Robo-shopping on most phones is still a little awkward, but one retailer notes that the day is coming when many phones will have shopping apps. “The consumer will be able to go in a clothing store and try on a pair of jeans. She will then be able to use her phone to see where else the same jeans are being sold and at what price. If another location offers the brand for less, the shopper will be able to order instantly from the competing store.”

The Key to Customer Retention?
So what are retailers thinking about in order to retain customers? The answer lies in “incentive marketing.” One development is what is known as the bounce-back coupon. If you buy from a store on a given day, you receive a coupon or gift card to be used on your next visit.

Stores are also employing selling-floor technology to help mimic the online options consumers have, and thereby, help retain customers. According to a report in The Wall Street Journal (8-26-10), J.C. Penney is adding a “FindMore” fixture at some stores that lets consumers scan a bar code to learn more about a product, just as they might do if they were at home online.

Clothing stores are watching as the prices come down on various types of technology and are adding items like interactive mirrors so to consumers can better evaluate (or at least have more fun evaluating!) particular purchases.

Loyalty programs (point and mileage programs) are all part of incentive marketing–an area that we can expect to see grow more and more.

These programs have firm roots in the past. If you’d like to read about incentive programs like trading stamps (S & H green stamps) and layaway plans, please visit “Shopping and Saving ,” or sign up for my free monthly e-letter by sending me an e-mail with Savings in the subject line: kate@americacomesalive.com