{"id":43,"date":"2016-02-24T20:18:19","date_gmt":"2016-02-24T20:18:19","guid":{"rendered":"http:\/\/137.148.11.35\/wordpress\/lets-go-shopping\/?post_type=chapter&p=43"},"modified":"2018-11-28T12:02:58","modified_gmt":"2018-11-28T17:02:58","slug":"modern-department-stores-origins","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/chapter\/modern-department-stores-origins\/","title":{"rendered":"Modern Department Stores Origins"},"content":{"raw":"The rise and fall of department stores in Cleveland is a most interesting story wrought with drama, intrigue and occasionally peril.\u00a0 Passionate about their calling, locally-based retailers took great pride in the merchandise they sold and customer service they provided.\u00a0 Fierce rivalry forced them to remain on the cutting edge of innovation.\u00a0 Coincidentally, this breakthrough in retailing occurred at a time of unprecedented economic and demographic expansion nationwide.\u00a0 Late 19th and early 20th century major department stores, in growing cities like Cleveland, set the business and ethical standards for retailing worldwide.\u00a0 Harry Selfridge\u00a0had nothing over the likes of Cleveland top retailers such as William B. Davis, Samuel Halle, Edwin C. Higbee, Max J. Lindner, Frederick A. Sterling\u00a0or William Taylor.\r\n\r\nBefore discussing some of the important innovations and unique business strategies made by retailers in Cleveland, it is important to briefly review the economic precedents responsible for this phenomenon.\u00a0 Breakthroughs in 19th and 20th century retailing resulted from a marked increase in affordable quality items manufactured during the Industrial Revolution.\u00a0 Begun in 1765 in the United Kingdom\u00a0when a Scottish inventor and mechanical engineer named James Watts\u00a0invented the steam engine, the Industrial Revolution quickly spread to the U.S.\u00a0 It started modestly enough in 1793 with the Slater Mills\u00a0in Pawtucket, R.I.\u00a0 Designed by Samuel Slater\u00a0(1768-1835), a former engineer with the British firm of Arkwright & Strutt, this multi-story, wood frame structure was the very first U.S. textile mill to utilize steam power for carding, roving and spinning.\u00a0 The Salter Mills became very successful very quickly. [footnote]Robertson, Ross M. History of the American Economy<\/em>. New York: Hartcourt Brace Janovich Inc., 1973, pp. 357.[\/footnote]\u00a0 A model of efficient manufacturing repeated in the Merrimack Mills\u00a0in Lowell, MA; Chicopee-Dwight Mills\u00a0in Chicopee Falls, MA\u00a0and Amoskeag Mills\u00a0in Manchester, NH, to name but a few, the Slater Mills symbolized an amazing achievement given the limited building materials available and primitive construction technology of the late 18th century.\r\n\r\nWood frame construction in the early 19th century consisted of numerous large, hallowed out vertical wood posts placed atop a rough-cut stone basement.\u00a0 Builders strategically positioned these posts throughout the structure to support intricate wood rafter beams above.\u00a0 Regrettably, the span between posts was very small.\u00a0 Supporting the horizontal rafter beams with the appropriate number of posts, while maintaining as wide a span as possible between them, was essential.\u00a0 Rafter beams served as the base for the floors above and gable roof in the attic.\r\n\r\nSamuel Slater\u00a0compensated for the limited work area by utilizing every available inch of floor space.\u00a0 His ingenuity insured maximum occupancy within confined spaces.\u00a0 This mill design remained popular in the U.S. until the 1850s.\u00a0 Recent breakthroughs in construction, in conjunction with the widespread use of iron and steel as primary building materials, signaled the end of these wood frame structures.\u00a0 Brick warehouse-like factories, with plenty of open work space, soon replaced them.\r\n\r\nA major dilemma facing early 19th century mill owners and their investors involved tough state laws regarding personal financial liability.\u00a0 These antiquated laws prevented many eager investors from experimenting with the latest business techniques and manufacturing methods.\u00a0 This meant that any innovations made in manufacturing and distribution\u00a0had to be weighed against possible financial losses and legal penalties.\u00a0 Any miscalculations might lead to bankruptcy and possibly imprisonment.\u00a0 Therefore, caution prevailed into the first decade of the 19th century.\u00a0\u00a0 Better utilization of natural resources and an insatiable appetite for more manufactured items after the War of 1812\u00a0led to a relaxation of earlier harsh state laws.\r\n\r\nHowever, none of these changes would have occurred without the development of a new legal device called the corporation.\u00a0 First introduced at the turn of the 19th century, the corporate legal entity sanctioned business expansion and production innovation by limiting personal liability. [footnote]Ibid<\/em>. pp. 358.[\/footnote] Under this newly business arrangement, a legally recognized body called the corporate dummy controlled all company assets and liabilities.\r\n\r\nThe corporation\u00a0also enjoyed legal rights and liabilities that were distinct from its employees and stockholders.\u00a0 Those investors using this new legal form elected a board of directors to oversee the company\u2019s operations.\u00a0 Opponents argued that there were no legal precedents for such action and that if left unchecked it might ruin the economy.\u00a0 However, astute business leaders argued convincingly that its positive benefits outweighed any of its disadvantages. [footnote]Ibid.<\/em>[\/footnote]\r\n\r\nIt took federal court action to silence opponents.\u00a0 The U.S. Supreme Court\u00a0in 1819, under Chief Justice John Marshall, ruled that corporations were legally recognized persons entitled to the same Constitutional rights as all other citizens.\u00a0 This ruling meant that corporations now had the legal right to prosecute individuals and other businesses for wrongdoing.\u00a0 When a business generated profit, then its stockholders made money, when it incurred debt, investors were only liable for the amount they had invested.\u00a0 If a corporation\u00a0declared bankruptcy then its creditors received the remaining business assets.\u00a0 Once those assets ran out, that was it.\u00a0 Creditors could not go after the investor\u2019s personal property or additional assets.\r\n\r\nThe overwhelming success of corporations led to a resurgence in buying and selling company stocks and bonds.\u00a0 The selling of company ownership rights through interest bearing stocks and bonds was not something new.\u00a0 It had been around since antiquity.\u00a0 What distinguished the early 19th century issuance of stocks and bonds from earlier activities was not the process; but rather, the clever ways in which enterprising business leaders used this additionally generated capital to promote expansion while also generating profits.\r\n\r\nFurthermore, this issuance of stocks and bonds\u00a0insured corporate owners that outside investors were committed for the duration.\u00a0 Most of the funds accrued in this way went towards business innovation and company expansion.\u00a0 The amount of stocks and bonds held by individual investors determined their percentage of ownership.\u00a0 The actual value of their investment changed over time based on profits and losses.\u00a0 Company officials paid out additional profits in the form of stock dividends.\u00a0 Preferred stock and bondholders received dividends first followed by common stockholders.\r\n\r\nThe corporation\u00a0provided fantastic economic opportunities for shrewd early 19th century investors.\u00a0 In particular, it encouraged innovation in ways never dreamed of before.\u00a0 In the textile industry\u00a0it led to new mills in the Northeast\u00a0and Mid-Atlantic states\u00a0during the late 1820s and early 1830s.\u00a0 With workforces totaling hundreds of people, these efficiently operated factories produced some of the finest broadloom ever made.\r\n\r\nHowever, their success story did not end with producing quality broadloom.\u00a0 Many mill owners, by the late 1830s, began to manufacture their-own ready-made clothes.\u00a0 Clothes manufacturing represented the next logical step for ambitious businessmen who wanted new opportunities.\u00a0 Affordable blouses, frocks, pants and shirts flooded the market.\u00a0 These ready-made garments sold quickly.\u00a0 The quandary facing mill owners was how best to market these items?\r\n\r\nTwo retail options existed at that time.\u00a0 The first, involved selling items directly to consumers through company-owned stores.\u00a0 That option required mill owners to finance every aspect of retailing through their-own controlled stores.\u00a0 No jobbers\u00a0involved.\u00a0 Employing a commissioned agent represented a second option.\u00a0 Under this arrangement, a company agent would be responsible for delivering manufactured goods to shopkeepers\u00a0who, in turn, would sell them.\u00a0 Individual shop owners then brokered the merchandise in question. \u00a0However, being selected to sell certain desirable items did not mean give them free rein when it came to selling.\u00a0 Manufacturers held these shop owners accountable for everything they supplied.\u00a0 Factory owners also demanded sizeable profits on every product sold.\u00a0 The inability of many early 19th century shopkeepers\u00a0to generate sufficient profits to meet rising costs necessitated such harsh terms.\r\n\r\nThe question facing manufacturers and merchants was which option best suited their needs?\u00a0 The final decision was not the exclusive prerogative of one over the other.\u00a0 Shoppers themselves played a key role in its outcome.\u00a0 In this instance, customers let it be known that they wanted ready access to a wide assortment of reasonable priced items, and that they were willing to pay a pretty penny for this service.\u00a0 Their demands posed an interesting challenge to manufacturers and shopkeepers\u00a0alike.\u00a0 After much experimentation, mid-19th century merchants determined that earlier retail models no longer worked.\u00a0 A new form of retailing must be developed if they planned to profit handsomely from recent distribution\u00a0and manufacturing breakthroughs.\r\n\r\nBusiness historians often credit a Parisian retailer named Aristede Bouciaut\u00a0(1810-1877) for developing the first department store. [footnote]Tamilia, Robert D. The Wonderful World of the Department Store in Historical Perspective: A Comprehensive International Bibliography Partially Annotated.<\/em> Faculty. quinnipiac.edu\/charm\/depart.store.pdf.[\/footnote] Called Le Bon Marche, this establishment featured the latest fashions and accessories within a spectacular setting.\u00a0 Although Le Bon Marche\u00a0symbolized a major breakthrough in department store development, Bouciant was not alone in such activity.\u00a0 Early 19th century U.S. retailers from Boston to Richmond and from New York to Chicago also devoted countless hours towards resolving this retail dilemma.\u00a0 Innovation knows no bounds or boundaries.\u00a0 It is a cause and effect process generated by real or perceived economic and social needs.\r\n\r\nA New York City\u00a0merchant named Henry Sands Brooks\u00a0epitomized this early 19th century highly innovative retailer.\u00a0 This shopkeeper, in 1818, opened H & DH Brooks Company. [footnote]Brooks Brothers. Centenary 1818-1918<\/em>. New York: The Cheltenham Press, 1918, pp. 5-10.\r\n\r\n[\/footnote] The forerunner of today\u2019s Brooks Brothers, this Manhattan-based haberdashery soon expanded its retail line to include ready-made men\u2019s suits.\u00a0 Others soon followed.\u00a0 A number of fashionable retail shops in the late 1820s lined lower Manhattan\u2019s Liberty Street\u00a0and several nearby avenues.\u00a0 These highly energetic merchants formed the nucleus of what became New York\u2019s first downtown district.\u00a0 Their phenomenal success prompted most of them in the 1840s to move to larger facilities.\u00a0 Their new climes, on lower Broadway\u00a0between Liberty and Houston streets, represented some of the finest retail establishments in the world.\u00a0 They set the stage for larger department stores yet to come.\r\n\r\nAs important as these Broadway\u00a0shops were to the expansion of early 19th century retailing, they were not the only economic forces at work here.\u00a0 Many scholars believe that the general store set the stage for traditional department stores.\u00a0 A friendly, informal setting with a wide range of items, the general store had been around for nearly two centuries.\u00a0 It offered all sorts of merchandise from leather goods, clothes and household items to candy, medicines and food stuffs. [footnote]Yeager, Lyn Allison. \u201cChapin\u2019s General Store.\u201d Illinois Commentary, <\/em>1972, pp. 1-4.[\/footnote]\u00a0 Early 19th century dry goods stores simply improved upon it.\u00a0 Instead of squeezing many items into cramped dirty quarters, these enlightened merchants sold their wares in no frills, large warehouses.\u00a0 It was just a matter of time before these plain warehouses became fancy department stores.\r\n\r\nYet, this retail experience meant much more than changes in building archetypes.\u00a0 Astute 19th century retailers also taught their customers how to become discerning shoppers.\u00a0 These new department stores truly symbolized a revolutionary step in retailing whose time had come.\u00a0 Some of its most thought provoking ideas included standardized packaging of items by weight; fixed pricing, universal clothing sizes and open shelf merchandise placement for easy access.\u00a0 It paid retailers to standardize their merchandise choices and prices as a way of insuring fair pricing. [footnote]Robertson. History of the American Economy<\/em>. pp. 358.[\/footnote]\r\n\r\nIts unique setup further distinguished this retail experiences.\u00a0 Owners created separate departments or units each operated by a trained sales manager.\u00a0 Department store buyers and sales staff answered to their sales managers. [footnote]Ibid.<\/em> pp. 357. [\/footnote]\u00a0Managers monitored their employees and served as liaisons between their staff and store officials. \u00a0As unofficial human resource experts, store managers often settled disputes among staff members.\r\n\r\nIn order to generate additional capital, many rented space in their stores to independent shopkeepers.\u00a0 Renting to others mollified competition to a certain extent by insuring the loyalty of merchants who rented that space.\u00a0 This rental arrangement provided customers with a whole range of specialty items and services that would not otherwise be offered there.\u00a0 At the same time, it afforded small shop owners the opportunity of expanding without assuming the high costs and debt inherent with independent shop expansion.\r\n\r\nThis kind of business efficiency\u00a0represented the keystones to financial success for hundreds of shopkeepers\u00a0during the Industrial Age.\u00a0 The Gospel of Efficiency\u00a0that resulted from the adoption of such business practices pressured department store owners to hire competent employees at all levels.\u00a0 Nowhere was this more evident than in sales departments.\u00a0 Professionally trained salespersons enhanced the customer\u2019s shopping experience at every level.\u00a0 This meant hiring the best people for each department.\u00a0 These shrewd retailers also relied on the latest business principles when it came to purchasing merchandise.\u00a0 At first, they purchased the bulk of their products from both jobbers\u00a0and wholesalers.\u00a0 Hoping to significantly lower costs, many beginning in the 1850s bought their wares from manufacturers and agent representatives.\u00a0 This new buying practices eliminated the need for both jobbers and wholesalers.\r\n\r\nThe growing popularity of ready-made clothing during the Civil War\u00a0not only lowered clothing manufacturing costs, but also, encouraged new distribution\u00a0methods.\u00a0 By the mid-1870s, most large department stores depended on manufacturers and distributors exclusively. [footnote]Ibid.<\/em>[\/footnote] Jobbers and wholesalers\u00a0redirected their efforts away from large stores towards smaller retail outlets.\u00a0 Lacking the economic and financial clout necessary to compete in the big leagues, small retailers welcomed them into their fold.\u00a0 Their expertise allowed small shopkeepers\u00a0to focus on other pressing financial concerns.\r\n\r\nAs stated earlier, mid-19th century department store owners used modern business principles in a variety of new and innovative ways.\u00a0\u00a0 For example, they relied heavily on qualified staff members to settle customer complaints and employee problems.\u00a0 These merchants previously handled all human resource and customer issues.\u00a0 Relieved of this responsibility enabled shopkeepers\u00a0to nurture new business methods intended to please their customer-base.\u00a0 They wanted their shoppers to thoroughly enjoy their shopping experience each and every time.\u00a0 If that meant providing credit to worthy customers, so be it.\u00a0 New flexible credit plans appealed to penny-wise shoppers.\u00a0 Layaway plans also gained favor with some customers as did store-issued credit cards.\u00a0 From a management perspective it made perfect sense in that it provided them with an accurate daily record of shoppers\u2019 expenses.\r\n\r\nThe highly profitable 19th century textile industry\u00a0took full advantage of these stores.\u00a0 They relied on them to sell thousands of items weekly.\u00a0 In turn, store owners depended on these industries to stock them with quality items on a continual basis.\u00a0 As stated earlier in this chapter, early 19th century merchants on Liberty Street\u00a0risked a great deal when they moved to lower Broadway.\u00a0 To the casual observer such actions may have seemed foolhardy.\u00a0 They might say that locating next door to each other might cause confusion among customers, and most especially those who did not want to search the numerous shops for specific items.\r\n\r\nTheir reluctance to explore the area might result in them purchasing any-and-all available items from the shops at the beginning of the street, rather than browsing through the other stores further down the block.\u00a0 Fortunately, New York shoppers were not confused by the many retail choices at their disposal.\u00a0 They loved the opportunity of going from one store to another in search of the perfect item at the best possible price.\u00a0 It represented a challenge, in their minds it was the ultimate shopping experience.\r\n\r\nClose proximity proved advantageous for the store owners as well.\u00a0 It enabled them to stay abreast of all the latest business breakthroughs, while encouraging greater cooperation.\u00a0 If one place did not have a certain item, the shopkeeper would suggest that the customer look next door.\u00a0 Perhaps that retailer might have the desired item.\u00a0 It was certainly worth a try.\u00a0 Reciprocity among neighboring stores led to long-lasting bonds among them.\u00a0 They were fellow-entrepreneurs\u00a0dedicated to serving their shoppers.\u00a0 If one succeeded, then they all succeeded.\r\n\r\nTheir phenomenal success in the 1820s and 1830s was legendary and led to expansion quickly.\u00a0 Expanding a business, any business, requires large amounts of capital.\u00a0 Unfortunately, many early 19th century New York retailers lacked the kind of capital necessary to meet these growing challenges.\u00a0 They also fully recognized that the local retail market was influx, and that the future of local retailing belonged to those who could successfully reinvent themselves using outside capital.\u00a0 With those very thoughts in mind, successful shopkeepers\u00a0sought out large investments from many of the world\u2019s richest entrepreneurs.\r\n\r\nLong-term investments by the rich led to the establishment of many successful Manhattan department stores during the mid to late-19th century.\u00a0 Those investors readily lent both their business expertise and extensive financial resources.\u00a0 The new sophisticated department stores represented the culmination of a long and perilous journey that had begun nearly two hundred years earlier with the general store.\u00a0 Every large city in the U.S., by the 1850s, boasted of at least one department store with many having several.\u00a0 Early leaders included Brooks Brothers\u00a0(1818),\u00a0 Lord & Taylor (1826),\u00a0 Gilchrist\u00a0 (1842),\u00a0 A.T. Stewart\u2019s (1846),\u00a0 Jordan Marsh\u00a0 (1851),\u00a0 Carson Pirie Scott\u00a0(1854),\u00a0 R. H. Macy (1858), Hower & Higbee\u00a0\u00a0(1860),\u00a0 Bloomingdale (1861), Saks-5th Avenue (1867), Rich\u2019s\u00a0(1867), Taylor, Kilpatrick (1870), Wanamaker\u00a0 (1876)\u00a0 and\u00a0 Marshall Field\u00a0 (1881).\r\n\r\nMuch of their success originated with the uncanny knack of these talented retailers to provide quality goods and services\u00a0within a friendly business environment. [footnote]Ibid.<\/em> pp. 358-359.[\/footnote]\u00a0 For example, elegant women\u2019s fashions, special Christmas display windows and a free personal shopping service distinguished New York\u2019s Lord & Taylor\u2019s, while Boston\u2019s Gilchrist\u2019s\u00a0became known for its fabulous shoes, jewelry, housewares and of course delicious almond macaroons.\u00a0 Rich\u2019s\u00a0in Atlanta gained national recognition for its generous credit and exchange policies, while Philadelphia\u2019s Wanamaker\u2019s\u00a0became one of the first to sell its-own ready-made clothes.\u00a0 Marshall Fields of Chicago led the pack with its ever-popular Tea Room, European buying rooms and special bridal registry.\r\n\r\nHowever, there were other crucial elements that played into their hand.\u00a0 A respected 19th century Cleveland retailer named E.M. McGillin\u00a0(1847-1919) summed it up best.\u00a0 He suggested that large department store owners enjoyed a decided economic advantage over small shopkeepers\u00a0in that they had access to great amounts of capital and large inventories, not readily available to smaller store owners.\u00a0 He believed that a great majority of large retailers sustained their leads by selling many popular items at below-cost.\u00a0 Selling in volume like that generated huge profits.\u00a0 Those not having access to large inventories or vast amounts of capital often found it virtually impossible to sustain themselves on low profit margins.\u00a0 In the end, these less affluent shopkeepers\u00a0found themselves charging much higher prices for the same goods sold by big retailers at a fraction of the cost.\r\n\r\nMcGillin pointed out that the Panic of 1873\u00a0reinforced the business adage that prized merchandise must be sold at the lowest possible price. [footnote]McGillin, E. M. and Company. \u201cHistory Repeating Itself.\u201d The Cleveland Plain Dealer<\/em>, March 25, 1882.[\/footnote]\u00a0 The Panic of 1873 led to the closing of over 18,000 businesses.\u00a0 Many of these businesses were small to medium sized stores with limited capital reserves.\u00a0 McGillin contended that easy credit following the Civil War\u00a0led to the establishment of these fly-by-night firms.\u00a0 He further argued that sound businesses never depend on easy credit.\u00a0 Instead, they acquired gold and silver reserves as collateral.\u00a0 Those without such reserves declared bankrupt when the economy soured.\u00a0 According to McGillin, customers in the 1870s enjoyed an advantage of earlier generations in that they have the where-for-all to shop around for the best possible deal.\u00a0 They turn, more often than not, to well-established department stores for their goods.\r\n\r\nLarge-scale department stores required carefully orchestrated business planning.\u00a0 Once an enterprising business person understood the fundamental principles of retailing then it was up to that individual to stay informed of the latest business and fashion trends.\u00a0 Certain staples within the industry such as advertising, customer services and salesmanship\u00a0grew more sophistication over time.\u00a0 Successful late 19th century retailers often used psychology to promote sales.\u00a0 Everything from store d\u00e9cor and advertising to customer service and cost savings had a psychological edge.\u00a0 Store owners wanted their customers to buy as many items and take advantage of as many services as possible.\u00a0 The sky was the limit.\u00a0 Also, every establishment developed its-own identity.\u00a0 Most often, the owner\u2019s perception of what the community needed and wanted shaped that identity.\u00a0 Many focused on everyday shoppers, while others concentrated on the needs and wants of the growing middle and upper classes.\r\n\r\nWhatever their customer-base, all retailers conveyed a similar message.\u00a0 Some transported their shoppers to distant and exotic lands through high priced, imported merchandise.\u00a0 These items included such things as expensive perfumes, fine wines, rare cheeses, luxurious furs and designer jewelry.\u00a0 Strategically placed within highly decorative displays, these products represented a glamorous world far removed from their customer\u2019s daily lives.\r\n\r\nOthers emphasized everyday items such as auto parts, appliances, work clothes, stationary and tools.\u00a0 This kind of merchandise required little fanfare and practically sold itself.\u00a0 The key to repeat business rested with the ability of these store owners to understand their patrons\u2019 specific wants and needs, and then readjust their business strategies accordingly to fulfill changing demands year in and year out.\r\n\r\nShowmanship represented half the battle, knowing what the shoppers really intended to buy was the other half.\u00a0 Through it all, common sense prevailed.\u00a0 Once customers believed in the integrity and sincerity of their local department stores, then it became the responsibility of those retailers to provide the desired goods and services\u00a0at a fair price.\u00a0 Store owners knew all too well that if they slacked in their chosen roles that other retailers were prepared to serve their every need.\r\n\r\nThis new approach to retailing whereby the customer was always right ran counter to the take-it-or-leave-it philosophies of general stores.\u00a0 Known for supplying hardware and software products within a no-frills environment, general stores served a useful function for many years.\u00a0 Their friendly, informal settings especially flourished in remote parts of the nation where survival itself depended upon settlers being able to secure durable, low-cost staples quickly.\u00a0 With the advent of the Industrial Revolution\u00a0and the elimination of the American frontier, all of that changed.\r\n\r\nInsightful department store owners distinguished between hardware and software items with most focusing on one or the other.\u00a0 Only a select few such as Montgomery Ward\u00a0or Sears & Roebuck\u00a0continued to promote both.\u00a0 Competition among department stores, from the 1880s to the 1920s, intensified greatly.\u00a0 Increasing public pressure for reasonably priced goods and high quality services led large retailers to offer a barrage of new and enticing incentives and luxuries.\u00a0 Daily newspaper advertising played an ever important role in promoting individual department store merchandise and services.\u00a0 The idea of advertising was not new.\u00a0 Astute retailers in the U.S. as early as the 1830s recognized its potential value.\u00a0 Not only did it foster increased consumer demand for merchandise generally, but also, proved highly effective in promoting certain items over the exclusion of others.\u00a0 Its intensity, rather than its goals, changed over time.\r\n\r\nMost early and mid-19th century advertising occurred in local newspapers.\u00a0 These advertisements, often found on the front page of dailies, were often limited to a few lines.\u00a0 They described the item or items for sale at a particular retailer along with its cost.\u00a0 Advertisements might also include drawings of the merchandise for sale or possibly an artist\u2019s rendering of the front fa\u00e7ade of the shop where the item or items were being sold.\u00a0 However, merchandise promotions through the local press expanded quickly.\u00a0 Department stores, by the early 1880s, ran full page advertisements extolling the many virtues of the product or products for sale. [footnote]Robertson. History of the American Economy.<\/em> pp. 361.[\/footnote]Many advertisements were patronizing, overly sentimental.\u00a0 But, they got the job done.\u00a0 Increasingly, retailers stressed the need for the middle class customers to emulate the wealthy.\u00a0 Advertisements, throughout the 1920s, featured testimonies by celebrities and sports figures promoting merchandise.\r\n\r\nThe \u201cRoaring Twenties\u201d also introduced professional artistic renderings of attractive people who were either wearing or using the item or items in question. [footnote]Ibid.<\/em>[\/footnote] Detailed advertisements\u00a0prominently displaying the store\u2019s logo also found their way into regional and national magazines.\u00a0 The 1930s saw the introduction of Sunday newspaper pictorial sections.\u00a0 Called rotogravures, they detailed community social events through photographs.\u00a0 They were often accompanied by full-page advertisements showing the latest fashions found in a certain store.\r\n\r\nMotion pictures\u00a0also promoted department stores, but in a somewhat different way.\u00a0 Not relying on store advertising to sell their productions, Hollywood producers\u00a0took great care when it came to selecting department stores for their films.\u00a0 Like other successful business leaders of their day, Hollywood promoters wanted the biggest bang for the buck.\u00a0 Only the best and biggest department stores got their names on the marquee.\u00a0 Miracle on 34th Street, the Big Store\u00a0and Breakfast at Tiffany\u2019s\u00a0represented three popular films utilizing that formula.\u00a0 Movie newsreels also featured department stores.\u00a0 Topics ran the gamut from the latest fashions worn by a specific star at a prominent event to what constituted proper department store etiquette for children.\u00a0 Some stores, in the 1950s and 1960s, went so far as to advertise between features at local drive-in theaters.\r\n\r\nWith the advent of radio and television, department stores relied on jingles to sell their merchandise.\u00a0 Retailers also sponsored their-own radio spots.\u00a0 Television, like films, devised very clever ways to weave popular department stores into their programming.\u00a0 Major televised events sponsored by large department stores included such things as Easter\u00a0Day, Thanksgiving Day\u00a0and Christmas Day parades.\u00a0 The big three television networks also, on occasion, utilized department stores as backdrops for situation comedies.\u00a0 They included the CBS\u00a0hit comedy Rhoda, in the mid-1970s, and ABC\u2019s Drew Carey Show\u00a0in the 1980s.\u00a0 The importance of advertising notwithstanding there were other factors accounting for the phenomenal success of department stores during the late 19th and early 20th centuries.\r\n\r\nThe majority of retailers used any-and-all economic or geographical advantages they might possess to promote sales.\u00a0 Their decision to concentrate within major downtowns was no accident.\u00a0 Most major economic and social activities in 19th century communities occurred there.\u00a0 In fact, most influential people lived and worked within walking distance of their city\u2019s center.\u00a0 It took the advent of horse-drawn buses followed by electric streetcars and automobiles before the elite removed themselves from the hustle and bustle of downtown to the more pristine suburbs.\r\n\r\nPrestigious law firms, major hospitals, prominent insurance companies, popular business concerns, large service industries and virtually all government services chose downtown locations.\u00a0 Recognizing the importance of prime location, major retailers quickly joined the bandwagon.\u00a0 Beginning in the early 19th century with modest dry goods companies and large wholesale groceries, downtown retailing soon blossomed into full-service, top quality department stores.\u00a0 The economic and social complexities readily identified with downtown may have evolved over time, but not its inherent importance.\u00a0 Each new generation of downtown leaders built upon the achievements of their predecessors.\r\n\r\nDowntown Cleveland continued to grow and prosper following the Second World War.\u00a0 In fact, stores such as Halle\u2019s and the May Company continued to post sizeable profits right into the 1960s in spite of the fact that the makeup of the central business district was changing very rapidly. Old traditions die hard.\u00a0 With the advent of Urban Renewal\u00a0in the 1950s and 1960s, business and political leaders in large cities, such as Cleveland, began to weigh their options.\u00a0 They envisioned grand, new business opportunities within deteriorating areas bordering downtown.\r\n\r\nThe U.S. Congress agreed and approved funding for Urban Renewal\u00a0beginning with the National Housing Act of 1949.\u00a0 Over the next two decades, federal officials poured in millions of dollars for major Urban Renewal projects.\u00a0 Many targeted towards older communities.\u00a0 In the case of Cleveland, it culminated on November 22, 1960 when Mayor Anthony J. Celebreeze\u00a0(1910-1998) unveiled plans for a massive redevelopment effort at the northeast corner of the city\u2019s central business district.\u00a0 Designed by the world renowned architect named I.M. Pei, this 64-acre tract called Erieview\u00a0represented one of the largest renewal efforts ever undertaken.\u00a0 This announcement came as no surprise to downtown department store owners.\r\n\r\nA Cleveland Planning Commission\u00a0study, published in 1958, claimed that the current surplus in downtown retail space would last for the next seventeen years.\u00a0 No need for further expansion here.\u00a0 Commissioners determined that what the downtown needed was additional high quality housing, first-rate office space and major hotels.\u00a0 Local retailers did not question these findings.\u00a0 This renewal effort led to the establishment of a new East 9th and East 13th street office\/residential core that ran between Chester and Lakeside avenues.\u00a0 That area eventually included the Chesterfield Apartment, 38-story Erieview\u00a0Tower\u00a0and a full service Holiday Inn.\u00a0 In terms of downtown retailing, this shift in weekday pedestrian traffic from the Euclid-Prospect corridor\u00a0to the East 9th and East 13th street district along with the growth of suburban stores soon marked the end of traditional downtown department stores.\u00a0 This truth eluded some retailers in the 1960s who tried to remain optimistic.\r\n\r\nDowntown Cleveland truly lost its luster by the mid-1970s.\u00a0 Major traffic problems, an outmoded public transportation system, and growing incidents of one-on-one crime all but destroyed downtown shopping.\u00a0 Community leaders remained divided over what steps to take next.\u00a0\u00a0 An interview in the January 1971 issue of Clevelander Magazine offered some possible remedies. [footnote]Gisser, Marv. \u201cDowntown There is a Future.\u201d Clevelander Magazine<\/em>, January 1971.[\/footnote]\u00a0 The reporter interviewed four prominent leaders of the recently created downtown consortium.\u00a0 They were Robert O. Clary\u00a0of B.R. Baker Clothiers; James Carney\u00a0of the Cleveland law firm of Carney, Carney & Broadbent, Walter M. Halle\u00a0President of Halle Brothers Co., and Howard B. Klein Vice President of Higbee\u2019s.\u00a0 A part of the Greater Cleveland Growth Association, this consortium dedicated itself to the revitalization of downtown Cleveland.\u00a0 Howard B. Klein chaired it.\r\n\r\nThese leaders agreed that growing incidents of crime downtown prevented many Clevelanders from enjoying its many attractions including shopping.\u00a0 They attacked the local media for not lessening the public\u2019s anxiety regarding that area\u2019s safety.\u00a0 Hoping to improve this situation quickly, these leaders developed a number of priorities. They ran the gamut from developing a modern transportation system and creating more parking to encouraging new investment and presenting more accurate media portrayals of downtown.\u00a0 All four believed these problems to be only temporary.\r\n\r\nUnfortunately, other issues such as a shrinking population-base and preferences by customers for suburban shopping further undermined the future of downtown.\u00a0 This downward economic spire continued into the remaining decades of the 20th century.\u00a0 In a last ditched effort, many downtown stores launched extensive advertising campaigns.\u00a0 Although some were briefly successful most campaigns failed miserably.\u00a0 The day of the downtown department store was over.\r\n\r\nSadly, the latest generation of shoppers has no idea the important role these stores once played in the life of Clevelanders.\u00a0 New stores have taken their place.\u00a0 One can only hope that today\u2019s retailers will learn from the successes and failures of the past.\u00a0 If not, they might be forced to face similar dilemmas in the future.\u00a0\u00a0 Long-term success least they forget is based on ability, timing and the ability to learn from others.\u00a0 A review of the past may offer some insight into the future.","rendered":"

The rise and fall of department stores in Cleveland is a most interesting story wrought with drama, intrigue and occasionally peril.\u00a0 Passionate about their calling, locally-based retailers took great pride in the merchandise they sold and customer service they provided.\u00a0 Fierce rivalry forced them to remain on the cutting edge of innovation.\u00a0 Coincidentally, this breakthrough in retailing occurred at a time of unprecedented economic and demographic expansion nationwide.\u00a0 Late 19th and early 20th century major department stores, in growing cities like Cleveland, set the business and ethical standards for retailing worldwide.\u00a0 Harry Selfridge\u00a0had nothing over the likes of Cleveland top retailers such as William B. Davis, Samuel Halle, Edwin C. Higbee, Max J. Lindner, Frederick A. Sterling\u00a0or William Taylor.<\/p>\n

Before discussing some of the important innovations and unique business strategies made by retailers in Cleveland, it is important to briefly review the economic precedents responsible for this phenomenon.\u00a0 Breakthroughs in 19th and 20th century retailing resulted from a marked increase in affordable quality items manufactured during the Industrial Revolution.\u00a0 Begun in 1765 in the United Kingdom\u00a0when a Scottish inventor and mechanical engineer named James Watts\u00a0invented the steam engine, the Industrial Revolution quickly spread to the U.S.\u00a0 It started modestly enough in 1793 with the Slater Mills\u00a0in Pawtucket, R.I.\u00a0 Designed by Samuel Slater\u00a0(1768-1835), a former engineer with the British firm of Arkwright & Strutt, this multi-story, wood frame structure was the very first U.S. textile mill to utilize steam power for carding, roving and spinning.\u00a0 The Salter Mills became very successful very quickly. [1]<\/sup><\/a>\u00a0 A model of efficient manufacturing repeated in the Merrimack Mills\u00a0in Lowell, MA; Chicopee-Dwight Mills\u00a0in Chicopee Falls, MA\u00a0and Amoskeag Mills\u00a0in Manchester, NH, to name but a few, the Slater Mills symbolized an amazing achievement given the limited building materials available and primitive construction technology of the late 18th century.<\/p>\n

Wood frame construction in the early 19th century consisted of numerous large, hallowed out vertical wood posts placed atop a rough-cut stone basement.\u00a0 Builders strategically positioned these posts throughout the structure to support intricate wood rafter beams above.\u00a0 Regrettably, the span between posts was very small.\u00a0 Supporting the horizontal rafter beams with the appropriate number of posts, while maintaining as wide a span as possible between them, was essential.\u00a0 Rafter beams served as the base for the floors above and gable roof in the attic.<\/p>\n

Samuel Slater\u00a0compensated for the limited work area by utilizing every available inch of floor space.\u00a0 His ingenuity insured maximum occupancy within confined spaces.\u00a0 This mill design remained popular in the U.S. until the 1850s.\u00a0 Recent breakthroughs in construction, in conjunction with the widespread use of iron and steel as primary building materials, signaled the end of these wood frame structures.\u00a0 Brick warehouse-like factories, with plenty of open work space, soon replaced them.<\/p>\n

A major dilemma facing early 19th century mill owners and their investors involved tough state laws regarding personal financial liability.\u00a0 These antiquated laws prevented many eager investors from experimenting with the latest business techniques and manufacturing methods.\u00a0 This meant that any innovations made in manufacturing and distribution\u00a0had to be weighed against possible financial losses and legal penalties.\u00a0 Any miscalculations might lead to bankruptcy and possibly imprisonment.\u00a0 Therefore, caution prevailed into the first decade of the 19th century.\u00a0\u00a0 Better utilization of natural resources and an insatiable appetite for more manufactured items after the War of 1812\u00a0led to a relaxation of earlier harsh state laws.<\/p>\n

However, none of these changes would have occurred without the development of a new legal device called the corporation.\u00a0 First introduced at the turn of the 19th century, the corporate legal entity sanctioned business expansion and production innovation by limiting personal liability. [2]<\/sup><\/a> Under this newly business arrangement, a legally recognized body called the corporate dummy controlled all company assets and liabilities.<\/p>\n

The corporation\u00a0also enjoyed legal rights and liabilities that were distinct from its employees and stockholders.\u00a0 Those investors using this new legal form elected a board of directors to oversee the company\u2019s operations.\u00a0 Opponents argued that there were no legal precedents for such action and that if left unchecked it might ruin the economy.\u00a0 However, astute business leaders argued convincingly that its positive benefits outweighed any of its disadvantages. [3]<\/sup><\/a><\/p>\n

It took federal court action to silence opponents.\u00a0 The U.S. Supreme Court\u00a0in 1819, under Chief Justice John Marshall, ruled that corporations were legally recognized persons entitled to the same Constitutional rights as all other citizens.\u00a0 This ruling meant that corporations now had the legal right to prosecute individuals and other businesses for wrongdoing.\u00a0 When a business generated profit, then its stockholders made money, when it incurred debt, investors were only liable for the amount they had invested.\u00a0 If a corporation\u00a0declared bankruptcy then its creditors received the remaining business assets.\u00a0 Once those assets ran out, that was it.\u00a0 Creditors could not go after the investor\u2019s personal property or additional assets.<\/p>\n

The overwhelming success of corporations led to a resurgence in buying and selling company stocks and bonds.\u00a0 The selling of company ownership rights through interest bearing stocks and bonds was not something new.\u00a0 It had been around since antiquity.\u00a0 What distinguished the early 19th century issuance of stocks and bonds from earlier activities was not the process; but rather, the clever ways in which enterprising business leaders used this additionally generated capital to promote expansion while also generating profits.<\/p>\n

Furthermore, this issuance of stocks and bonds\u00a0insured corporate owners that outside investors were committed for the duration.\u00a0 Most of the funds accrued in this way went towards business innovation and company expansion.\u00a0 The amount of stocks and bonds held by individual investors determined their percentage of ownership.\u00a0 The actual value of their investment changed over time based on profits and losses.\u00a0 Company officials paid out additional profits in the form of stock dividends.\u00a0 Preferred stock and bondholders received dividends first followed by common stockholders.<\/p>\n

The corporation\u00a0provided fantastic economic opportunities for shrewd early 19th century investors.\u00a0 In particular, it encouraged innovation in ways never dreamed of before.\u00a0 In the textile industry\u00a0it led to new mills in the Northeast\u00a0and Mid-Atlantic states\u00a0during the late 1820s and early 1830s.\u00a0 With workforces totaling hundreds of people, these efficiently operated factories produced some of the finest broadloom ever made.<\/p>\n

However, their success story did not end with producing quality broadloom.\u00a0 Many mill owners, by the late 1830s, began to manufacture their-own ready-made clothes.\u00a0 Clothes manufacturing represented the next logical step for ambitious businessmen who wanted new opportunities.\u00a0 Affordable blouses, frocks, pants and shirts flooded the market.\u00a0 These ready-made garments sold quickly.\u00a0 The quandary facing mill owners was how best to market these items?<\/p>\n

Two retail options existed at that time.\u00a0 The first, involved selling items directly to consumers through company-owned stores.\u00a0 That option required mill owners to finance every aspect of retailing through their-own controlled stores.\u00a0 No jobbers\u00a0involved.\u00a0 Employing a commissioned agent represented a second option.\u00a0 Under this arrangement, a company agent would be responsible for delivering manufactured goods to shopkeepers\u00a0who, in turn, would sell them.\u00a0 Individual shop owners then brokered the merchandise in question. \u00a0However, being selected to sell certain desirable items did not mean give them free rein when it came to selling.\u00a0 Manufacturers held these shop owners accountable for everything they supplied.\u00a0 Factory owners also demanded sizeable profits on every product sold.\u00a0 The inability of many early 19th century shopkeepers\u00a0to generate sufficient profits to meet rising costs necessitated such harsh terms.<\/p>\n

The question facing manufacturers and merchants was which option best suited their needs?\u00a0 The final decision was not the exclusive prerogative of one over the other.\u00a0 Shoppers themselves played a key role in its outcome.\u00a0 In this instance, customers let it be known that they wanted ready access to a wide assortment of reasonable priced items, and that they were willing to pay a pretty penny for this service.\u00a0 Their demands posed an interesting challenge to manufacturers and shopkeepers\u00a0alike.\u00a0 After much experimentation, mid-19th century merchants determined that earlier retail models no longer worked.\u00a0 A new form of retailing must be developed if they planned to profit handsomely from recent distribution\u00a0and manufacturing breakthroughs.<\/p>\n

Business historians often credit a Parisian retailer named Aristede Bouciaut\u00a0(1810-1877) for developing the first department store. [4]<\/sup><\/a> Called Le Bon Marche, this establishment featured the latest fashions and accessories within a spectacular setting.\u00a0 Although Le Bon Marche\u00a0symbolized a major breakthrough in department store development, Bouciant was not alone in such activity.\u00a0 Early 19th century U.S. retailers from Boston to Richmond and from New York to Chicago also devoted countless hours towards resolving this retail dilemma.\u00a0 Innovation knows no bounds or boundaries.\u00a0 It is a cause and effect process generated by real or perceived economic and social needs.<\/p>\n

A New York City\u00a0merchant named Henry Sands Brooks\u00a0epitomized this early 19th century highly innovative retailer.\u00a0 This shopkeeper, in 1818, opened H & DH Brooks Company. [5]<\/sup><\/a> The forerunner of today\u2019s Brooks Brothers, this Manhattan-based haberdashery soon expanded its retail line to include ready-made men\u2019s suits.\u00a0 Others soon followed.\u00a0 A number of fashionable retail shops in the late 1820s lined lower Manhattan\u2019s Liberty Street\u00a0and several nearby avenues.\u00a0 These highly energetic merchants formed the nucleus of what became New York\u2019s first downtown district.\u00a0 Their phenomenal success prompted most of them in the 1840s to move to larger facilities.\u00a0 Their new climes, on lower Broadway\u00a0between Liberty and Houston streets, represented some of the finest retail establishments in the world.\u00a0 They set the stage for larger department stores yet to come.<\/p>\n

As important as these Broadway\u00a0shops were to the expansion of early 19th century retailing, they were not the only economic forces at work here.\u00a0 Many scholars believe that the general store set the stage for traditional department stores.\u00a0 A friendly, informal setting with a wide range of items, the general store had been around for nearly two centuries.\u00a0 It offered all sorts of merchandise from leather goods, clothes and household items to candy, medicines and food stuffs. [6]<\/sup><\/a>\u00a0 Early 19th century dry goods stores simply improved upon it.\u00a0 Instead of squeezing many items into cramped dirty quarters, these enlightened merchants sold their wares in no frills, large warehouses.\u00a0 It was just a matter of time before these plain warehouses became fancy department stores.<\/p>\n

Yet, this retail experience meant much more than changes in building archetypes.\u00a0 Astute 19th century retailers also taught their customers how to become discerning shoppers.\u00a0 These new department stores truly symbolized a revolutionary step in retailing whose time had come.\u00a0 Some of its most thought provoking ideas included standardized packaging of items by weight; fixed pricing, universal clothing sizes and open shelf merchandise placement for easy access.\u00a0 It paid retailers to standardize their merchandise choices and prices as a way of insuring fair pricing. [7]<\/sup><\/a><\/p>\n

Its unique setup further distinguished this retail experiences.\u00a0 Owners created separate departments or units each operated by a trained sales manager.\u00a0 Department store buyers and sales staff answered to their sales managers. [8]<\/sup><\/a>\u00a0Managers monitored their employees and served as liaisons between their staff and store officials. \u00a0As unofficial human resource experts, store managers often settled disputes among staff members.<\/p>\n

In order to generate additional capital, many rented space in their stores to independent shopkeepers.\u00a0 Renting to others mollified competition to a certain extent by insuring the loyalty of merchants who rented that space.\u00a0 This rental arrangement provided customers with a whole range of specialty items and services that would not otherwise be offered there.\u00a0 At the same time, it afforded small shop owners the opportunity of expanding without assuming the high costs and debt inherent with independent shop expansion.<\/p>\n

This kind of business efficiency\u00a0represented the keystones to financial success for hundreds of shopkeepers\u00a0during the Industrial Age.\u00a0 The Gospel of Efficiency\u00a0that resulted from the adoption of such business practices pressured department store owners to hire competent employees at all levels.\u00a0 Nowhere was this more evident than in sales departments.\u00a0 Professionally trained salespersons enhanced the customer\u2019s shopping experience at every level.\u00a0 This meant hiring the best people for each department.\u00a0 These shrewd retailers also relied on the latest business principles when it came to purchasing merchandise.\u00a0 At first, they purchased the bulk of their products from both jobbers\u00a0and wholesalers.\u00a0 Hoping to significantly lower costs, many beginning in the 1850s bought their wares from manufacturers and agent representatives.\u00a0 This new buying practices eliminated the need for both jobbers and wholesalers.<\/p>\n

The growing popularity of ready-made clothing during the Civil War\u00a0not only lowered clothing manufacturing costs, but also, encouraged new distribution\u00a0methods.\u00a0 By the mid-1870s, most large department stores depended on manufacturers and distributors exclusively. [9]<\/sup><\/a> Jobbers and wholesalers\u00a0redirected their efforts away from large stores towards smaller retail outlets.\u00a0 Lacking the economic and financial clout necessary to compete in the big leagues, small retailers welcomed them into their fold.\u00a0 Their expertise allowed small shopkeepers\u00a0to focus on other pressing financial concerns.<\/p>\n

As stated earlier, mid-19th century department store owners used modern business principles in a variety of new and innovative ways.\u00a0\u00a0 For example, they relied heavily on qualified staff members to settle customer complaints and employee problems.\u00a0 These merchants previously handled all human resource and customer issues.\u00a0 Relieved of this responsibility enabled shopkeepers\u00a0to nurture new business methods intended to please their customer-base.\u00a0 They wanted their shoppers to thoroughly enjoy their shopping experience each and every time.\u00a0 If that meant providing credit to worthy customers, so be it.\u00a0 New flexible credit plans appealed to penny-wise shoppers.\u00a0 Layaway plans also gained favor with some customers as did store-issued credit cards.\u00a0 From a management perspective it made perfect sense in that it provided them with an accurate daily record of shoppers\u2019 expenses.<\/p>\n

The highly profitable 19th century textile industry\u00a0took full advantage of these stores.\u00a0 They relied on them to sell thousands of items weekly.\u00a0 In turn, store owners depended on these industries to stock them with quality items on a continual basis.\u00a0 As stated earlier in this chapter, early 19th century merchants on Liberty Street\u00a0risked a great deal when they moved to lower Broadway.\u00a0 To the casual observer such actions may have seemed foolhardy.\u00a0 They might say that locating next door to each other might cause confusion among customers, and most especially those who did not want to search the numerous shops for specific items.<\/p>\n

Their reluctance to explore the area might result in them purchasing any-and-all available items from the shops at the beginning of the street, rather than browsing through the other stores further down the block.\u00a0 Fortunately, New York shoppers were not confused by the many retail choices at their disposal.\u00a0 They loved the opportunity of going from one store to another in search of the perfect item at the best possible price.\u00a0 It represented a challenge, in their minds it was the ultimate shopping experience.<\/p>\n

Close proximity proved advantageous for the store owners as well.\u00a0 It enabled them to stay abreast of all the latest business breakthroughs, while encouraging greater cooperation.\u00a0 If one place did not have a certain item, the shopkeeper would suggest that the customer look next door.\u00a0 Perhaps that retailer might have the desired item.\u00a0 It was certainly worth a try.\u00a0 Reciprocity among neighboring stores led to long-lasting bonds among them.\u00a0 They were fellow-entrepreneurs\u00a0dedicated to serving their shoppers.\u00a0 If one succeeded, then they all succeeded.<\/p>\n

Their phenomenal success in the 1820s and 1830s was legendary and led to expansion quickly.\u00a0 Expanding a business, any business, requires large amounts of capital.\u00a0 Unfortunately, many early 19th century New York retailers lacked the kind of capital necessary to meet these growing challenges.\u00a0 They also fully recognized that the local retail market was influx, and that the future of local retailing belonged to those who could successfully reinvent themselves using outside capital.\u00a0 With those very thoughts in mind, successful shopkeepers\u00a0sought out large investments from many of the world\u2019s richest entrepreneurs.<\/p>\n

Long-term investments by the rich led to the establishment of many successful Manhattan department stores during the mid to late-19th century.\u00a0 Those investors readily lent both their business expertise and extensive financial resources.\u00a0 The new sophisticated department stores represented the culmination of a long and perilous journey that had begun nearly two hundred years earlier with the general store.\u00a0 Every large city in the U.S., by the 1850s, boasted of at least one department store with many having several.\u00a0 Early leaders included Brooks Brothers\u00a0(1818),\u00a0 Lord & Taylor (1826),\u00a0 Gilchrist\u00a0 (1842),\u00a0 A.T. Stewart\u2019s (1846),\u00a0 Jordan Marsh\u00a0 (1851),\u00a0 Carson Pirie Scott\u00a0(1854),\u00a0 R. H. Macy (1858), Hower & Higbee\u00a0\u00a0(1860),\u00a0 Bloomingdale (1861), Saks-5th Avenue (1867), Rich\u2019s\u00a0(1867), Taylor, Kilpatrick (1870), Wanamaker\u00a0 (1876)\u00a0 and\u00a0 Marshall Field\u00a0 (1881).<\/p>\n

Much of their success originated with the uncanny knack of these talented retailers to provide quality goods and services\u00a0within a friendly business environment. [10]<\/sup><\/a>\u00a0 For example, elegant women\u2019s fashions, special Christmas display windows and a free personal shopping service distinguished New York\u2019s Lord & Taylor\u2019s, while Boston\u2019s Gilchrist\u2019s\u00a0became known for its fabulous shoes, jewelry, housewares and of course delicious almond macaroons.\u00a0 Rich\u2019s\u00a0in Atlanta gained national recognition for its generous credit and exchange policies, while Philadelphia\u2019s Wanamaker\u2019s\u00a0became one of the first to sell its-own ready-made clothes.\u00a0 Marshall Fields of Chicago led the pack with its ever-popular Tea Room, European buying rooms and special bridal registry.<\/p>\n

However, there were other crucial elements that played into their hand.\u00a0 A respected 19th century Cleveland retailer named E.M. McGillin\u00a0(1847-1919) summed it up best.\u00a0 He suggested that large department store owners enjoyed a decided economic advantage over small shopkeepers\u00a0in that they had access to great amounts of capital and large inventories, not readily available to smaller store owners.\u00a0 He believed that a great majority of large retailers sustained their leads by selling many popular items at below-cost.\u00a0 Selling in volume like that generated huge profits.\u00a0 Those not having access to large inventories or vast amounts of capital often found it virtually impossible to sustain themselves on low profit margins.\u00a0 In the end, these less affluent shopkeepers\u00a0found themselves charging much higher prices for the same goods sold by big retailers at a fraction of the cost.<\/p>\n

McGillin pointed out that the Panic of 1873\u00a0reinforced the business adage that prized merchandise must be sold at the lowest possible price. [11]<\/sup><\/a>\u00a0 The Panic of 1873 led to the closing of over 18,000 businesses.\u00a0 Many of these businesses were small to medium sized stores with limited capital reserves.\u00a0 McGillin contended that easy credit following the Civil War\u00a0led to the establishment of these fly-by-night firms.\u00a0 He further argued that sound businesses never depend on easy credit.\u00a0 Instead, they acquired gold and silver reserves as collateral.\u00a0 Those without such reserves declared bankrupt when the economy soured.\u00a0 According to McGillin, customers in the 1870s enjoyed an advantage of earlier generations in that they have the where-for-all to shop around for the best possible deal.\u00a0 They turn, more often than not, to well-established department stores for their goods.<\/p>\n

Large-scale department stores required carefully orchestrated business planning.\u00a0 Once an enterprising business person understood the fundamental principles of retailing then it was up to that individual to stay informed of the latest business and fashion trends.\u00a0 Certain staples within the industry such as advertising, customer services and salesmanship\u00a0grew more sophistication over time.\u00a0 Successful late 19th century retailers often used psychology to promote sales.\u00a0 Everything from store d\u00e9cor and advertising to customer service and cost savings had a psychological edge.\u00a0 Store owners wanted their customers to buy as many items and take advantage of as many services as possible.\u00a0 The sky was the limit.\u00a0 Also, every establishment developed its-own identity.\u00a0 Most often, the owner\u2019s perception of what the community needed and wanted shaped that identity.\u00a0 Many focused on everyday shoppers, while others concentrated on the needs and wants of the growing middle and upper classes.<\/p>\n

Whatever their customer-base, all retailers conveyed a similar message.\u00a0 Some transported their shoppers to distant and exotic lands through high priced, imported merchandise.\u00a0 These items included such things as expensive perfumes, fine wines, rare cheeses, luxurious furs and designer jewelry.\u00a0 Strategically placed within highly decorative displays, these products represented a glamorous world far removed from their customer\u2019s daily lives.<\/p>\n

Others emphasized everyday items such as auto parts, appliances, work clothes, stationary and tools.\u00a0 This kind of merchandise required little fanfare and practically sold itself.\u00a0 The key to repeat business rested with the ability of these store owners to understand their patrons\u2019 specific wants and needs, and then readjust their business strategies accordingly to fulfill changing demands year in and year out.<\/p>\n

Showmanship represented half the battle, knowing what the shoppers really intended to buy was the other half.\u00a0 Through it all, common sense prevailed.\u00a0 Once customers believed in the integrity and sincerity of their local department stores, then it became the responsibility of those retailers to provide the desired goods and services\u00a0at a fair price.\u00a0 Store owners knew all too well that if they slacked in their chosen roles that other retailers were prepared to serve their every need.<\/p>\n

This new approach to retailing whereby the customer was always right ran counter to the take-it-or-leave-it philosophies of general stores.\u00a0 Known for supplying hardware and software products within a no-frills environment, general stores served a useful function for many years.\u00a0 Their friendly, informal settings especially flourished in remote parts of the nation where survival itself depended upon settlers being able to secure durable, low-cost staples quickly.\u00a0 With the advent of the Industrial Revolution\u00a0and the elimination of the American frontier, all of that changed.<\/p>\n

Insightful department store owners distinguished between hardware and software items with most focusing on one or the other.\u00a0 Only a select few such as Montgomery Ward\u00a0or Sears & Roebuck\u00a0continued to promote both.\u00a0 Competition among department stores, from the 1880s to the 1920s, intensified greatly.\u00a0 Increasing public pressure for reasonably priced goods and high quality services led large retailers to offer a barrage of new and enticing incentives and luxuries.\u00a0 Daily newspaper advertising played an ever important role in promoting individual department store merchandise and services.\u00a0 The idea of advertising was not new.\u00a0 Astute retailers in the U.S. as early as the 1830s recognized its potential value.\u00a0 Not only did it foster increased consumer demand for merchandise generally, but also, proved highly effective in promoting certain items over the exclusion of others.\u00a0 Its intensity, rather than its goals, changed over time.<\/p>\n

Most early and mid-19th century advertising occurred in local newspapers.\u00a0 These advertisements, often found on the front page of dailies, were often limited to a few lines.\u00a0 They described the item or items for sale at a particular retailer along with its cost.\u00a0 Advertisements might also include drawings of the merchandise for sale or possibly an artist\u2019s rendering of the front fa\u00e7ade of the shop where the item or items were being sold.\u00a0 However, merchandise promotions through the local press expanded quickly.\u00a0 Department stores, by the early 1880s, ran full page advertisements extolling the many virtues of the product or products for sale. [12]<\/sup><\/a>Many advertisements were patronizing, overly sentimental.\u00a0 But, they got the job done.\u00a0 Increasingly, retailers stressed the need for the middle class customers to emulate the wealthy.\u00a0 Advertisements, throughout the 1920s, featured testimonies by celebrities and sports figures promoting merchandise.<\/p>\n

The \u201cRoaring Twenties\u201d also introduced professional artistic renderings of attractive people who were either wearing or using the item or items in question. [13]<\/sup><\/a> Detailed advertisements\u00a0prominently displaying the store\u2019s logo also found their way into regional and national magazines.\u00a0 The 1930s saw the introduction of Sunday newspaper pictorial sections.\u00a0 Called rotogravures, they detailed community social events through photographs.\u00a0 They were often accompanied by full-page advertisements showing the latest fashions found in a certain store.<\/p>\n

Motion pictures\u00a0also promoted department stores, but in a somewhat different way.\u00a0 Not relying on store advertising to sell their productions, Hollywood producers\u00a0took great care when it came to selecting department stores for their films.\u00a0 Like other successful business leaders of their day, Hollywood promoters wanted the biggest bang for the buck.\u00a0 Only the best and biggest department stores got their names on the marquee.\u00a0 Miracle on 34th Street, the Big Store\u00a0and Breakfast at Tiffany\u2019s\u00a0represented three popular films utilizing that formula.\u00a0 Movie newsreels also featured department stores.\u00a0 Topics ran the gamut from the latest fashions worn by a specific star at a prominent event to what constituted proper department store etiquette for children.\u00a0 Some stores, in the 1950s and 1960s, went so far as to advertise between features at local drive-in theaters.<\/p>\n

With the advent of radio and television, department stores relied on jingles to sell their merchandise.\u00a0 Retailers also sponsored their-own radio spots.\u00a0 Television, like films, devised very clever ways to weave popular department stores into their programming.\u00a0 Major televised events sponsored by large department stores included such things as Easter\u00a0Day, Thanksgiving Day\u00a0and Christmas Day parades.\u00a0 The big three television networks also, on occasion, utilized department stores as backdrops for situation comedies.\u00a0 They included the CBS\u00a0hit comedy Rhoda, in the mid-1970s, and ABC\u2019s Drew Carey Show\u00a0in the 1980s.\u00a0 The importance of advertising notwithstanding there were other factors accounting for the phenomenal success of department stores during the late 19th and early 20th centuries.<\/p>\n

The majority of retailers used any-and-all economic or geographical advantages they might possess to promote sales.\u00a0 Their decision to concentrate within major downtowns was no accident.\u00a0 Most major economic and social activities in 19th century communities occurred there.\u00a0 In fact, most influential people lived and worked within walking distance of their city\u2019s center.\u00a0 It took the advent of horse-drawn buses followed by electric streetcars and automobiles before the elite removed themselves from the hustle and bustle of downtown to the more pristine suburbs.<\/p>\n

Prestigious law firms, major hospitals, prominent insurance companies, popular business concerns, large service industries and virtually all government services chose downtown locations.\u00a0 Recognizing the importance of prime location, major retailers quickly joined the bandwagon.\u00a0 Beginning in the early 19th century with modest dry goods companies and large wholesale groceries, downtown retailing soon blossomed into full-service, top quality department stores.\u00a0 The economic and social complexities readily identified with downtown may have evolved over time, but not its inherent importance.\u00a0 Each new generation of downtown leaders built upon the achievements of their predecessors.<\/p>\n

Downtown Cleveland continued to grow and prosper following the Second World War.\u00a0 In fact, stores such as Halle\u2019s and the May Company continued to post sizeable profits right into the 1960s in spite of the fact that the makeup of the central business district was changing very rapidly. Old traditions die hard.\u00a0 With the advent of Urban Renewal\u00a0in the 1950s and 1960s, business and political leaders in large cities, such as Cleveland, began to weigh their options.\u00a0 They envisioned grand, new business opportunities within deteriorating areas bordering downtown.<\/p>\n

The U.S. Congress agreed and approved funding for Urban Renewal\u00a0beginning with the National Housing Act of 1949.\u00a0 Over the next two decades, federal officials poured in millions of dollars for major Urban Renewal projects.\u00a0 Many targeted towards older communities.\u00a0 In the case of Cleveland, it culminated on November 22, 1960 when Mayor Anthony J. Celebreeze\u00a0(1910-1998) unveiled plans for a massive redevelopment effort at the northeast corner of the city\u2019s central business district.\u00a0 Designed by the world renowned architect named I.M. Pei, this 64-acre tract called Erieview\u00a0represented one of the largest renewal efforts ever undertaken.\u00a0 This announcement came as no surprise to downtown department store owners.<\/p>\n

A Cleveland Planning Commission\u00a0study, published in 1958, claimed that the current surplus in downtown retail space would last for the next seventeen years.\u00a0 No need for further expansion here.\u00a0 Commissioners determined that what the downtown needed was additional high quality housing, first-rate office space and major hotels.\u00a0 Local retailers did not question these findings.\u00a0 This renewal effort led to the establishment of a new East 9th and East 13th street office\/residential core that ran between Chester and Lakeside avenues.\u00a0 That area eventually included the Chesterfield Apartment, 38-story Erieview\u00a0Tower\u00a0and a full service Holiday Inn.\u00a0 In terms of downtown retailing, this shift in weekday pedestrian traffic from the Euclid-Prospect corridor\u00a0to the East 9th and East 13th street district along with the growth of suburban stores soon marked the end of traditional downtown department stores.\u00a0 This truth eluded some retailers in the 1960s who tried to remain optimistic.<\/p>\n

Downtown Cleveland truly lost its luster by the mid-1970s.\u00a0 Major traffic problems, an outmoded public transportation system, and growing incidents of one-on-one crime all but destroyed downtown shopping.\u00a0 Community leaders remained divided over what steps to take next.\u00a0\u00a0 An interview in the January 1971 issue of Clevelander Magazine offered some possible remedies. [14]<\/sup><\/a>\u00a0 The reporter interviewed four prominent leaders of the recently created downtown consortium.\u00a0 They were Robert O. Clary\u00a0of B.R. Baker Clothiers; James Carney\u00a0of the Cleveland law firm of Carney, Carney & Broadbent, Walter M. Halle\u00a0President of Halle Brothers Co., and Howard B. Klein Vice President of Higbee\u2019s.\u00a0 A part of the Greater Cleveland Growth Association, this consortium dedicated itself to the revitalization of downtown Cleveland.\u00a0 Howard B. Klein chaired it.<\/p>\n

These leaders agreed that growing incidents of crime downtown prevented many Clevelanders from enjoying its many attractions including shopping.\u00a0 They attacked the local media for not lessening the public\u2019s anxiety regarding that area\u2019s safety.\u00a0 Hoping to improve this situation quickly, these leaders developed a number of priorities. They ran the gamut from developing a modern transportation system and creating more parking to encouraging new investment and presenting more accurate media portrayals of downtown.\u00a0 All four believed these problems to be only temporary.<\/p>\n

Unfortunately, other issues such as a shrinking population-base and preferences by customers for suburban shopping further undermined the future of downtown.\u00a0 This downward economic spire continued into the remaining decades of the 20th century.\u00a0 In a last ditched effort, many downtown stores launched extensive advertising campaigns.\u00a0 Although some were briefly successful most campaigns failed miserably.\u00a0 The day of the downtown department store was over.<\/p>\n

Sadly, the latest generation of shoppers has no idea the important role these stores once played in the life of Clevelanders.\u00a0 New stores have taken their place.\u00a0 One can only hope that today\u2019s retailers will learn from the successes and failures of the past.\u00a0 If not, they might be forced to face similar dilemmas in the future.\u00a0\u00a0 Long-term success least they forget is based on ability, timing and the ability to learn from others.\u00a0 A review of the past may offer some insight into the future.<\/p>\n

  1. Robertson, Ross M. History of the American Economy<\/em>. New York: Hartcourt Brace Janovich Inc., 1973, pp. 357. ↵<\/a><\/li>
  2. Ibid<\/em>. pp. 358. ↵<\/a><\/li>
  3. Ibid.<\/em> ↵<\/a><\/li>
  4. Tamilia, Robert D. The Wonderful World of the Department Store in Historical Perspective: A Comprehensive International Bibliography Partially Annotated.<\/em> Faculty. quinnipiac.edu\/charm\/depart.store.pdf. ↵<\/a><\/li>
  5. Brooks Brothers. Centenary 1818-1918<\/em>. New York: The Cheltenham Press, 1918, pp. 5-10.\r\n\r\n ↵<\/a><\/li>
  6. Yeager, Lyn Allison. \u201cChapin\u2019s General Store.\u201d Illinois Commentary, <\/em>1972, pp. 1-4. ↵<\/a><\/li>
  7. Robertson. History of the American Economy<\/em>. pp. 358. ↵<\/a><\/li>
  8. Ibid.<\/em> pp. 357. ↵<\/a><\/li>
  9. Ibid.<\/em> ↵<\/a><\/li>
  10. Ibid.<\/em> pp. 358-359. ↵<\/a><\/li>
  11. McGillin, E. M. and Company. \u201cHistory Repeating Itself.\u201d The Cleveland Plain Dealer<\/em>, March 25, 1882. ↵<\/a><\/li>
  12. Robertson. History of the American Economy.<\/em> pp. 361. ↵<\/a><\/li>
  13. Ibid.<\/em> ↵<\/a><\/li>
  14. Gisser, Marv. \u201cDowntown There is a Future.\u201d Clevelander Magazine<\/em>, January 1971. ↵<\/a><\/li><\/ol><\/div>","protected":false},"author":4,"menu_order":1,"comment_status":"closed","ping_status":"closed","template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[47],"contributor":[],"license":[],"class_list":["post-43","chapter","type-chapter","status-publish","hentry","chapter-type-standard"],"part":3,"_links":{"self":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapters\/43","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/comments?post=43"}],"version-history":[{"count":8,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapters\/43\/revisions"}],"predecessor-version":[{"id":196,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapters\/43\/revisions\/196"}],"part":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/parts\/3"}],"metadata":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapters\/43\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/media?parent=43"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/pressbooks\/v2\/chapter-type?post=43"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/contributor?post=43"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ulib.csuohio.edu\/lets-go-shopping\/wp-json\/wp\/v2\/license?post=43"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}