In the final analysis, there are many things modern retailers might learn from their successful predecessors.\u00a0 The fact that downtown department stores dominated local retailing for nearly 150 years says much about them.\u00a0 They provided their customers with merchandise and services deemed important.\u00a0 However, it represented much more than fulfilling the daily needs of their shoppers.\u00a0 They were spectacular palaces appreciated by the buying public everywhere.\u00a0 Most everyone over the age of sixty remembers shopping at local department stores.\u00a0 These establishments afforded excitement especially during the holiday season.\u00a0 Their unique merchandise and product staging transported shoppers from their everyday world to exotic places.<\/p>\n
Many modern retailers, in their haste to make quick profits, often lose sight of such aesthetic considerations.\u00a0 They prefer to focus on present needs and wants with little regard as to what happened in the past.\u00a0 They contend that the past has little to do with today\u2019s retail scene so why bother with it.\u00a0 In overlooking the important business lessons of the past, many modern-day retailers may be forced to face similar dilemmas in the future.\u00a0 The way past retailers handled daily and long-term issues might provide some valuable guidance for today\u2019s retailers wishing to avoid a similar fate in the future.\u00a0 This is especially true as they attempt to handle the economic challenges posed by an ever-changing, and at times, capricious customer-base.\u00a0 These formable challenges must be addressed directly to stay in the retail game.\u00a0 Past experience may afford some valuable insight into what kind of business strategies and tactics work successfully and which ones do not.\u00a0 It is essentially a blueprint of effective and ineffective retail practices.\u00a0 When used adroitly, it might enable modern-day retailers to avoid some of the worst economic pitfalls inherent with the industry.\u00a0 Ignoring these dangers may lead to re-living them.\u00a0 With those thoughts in mind, what are some of the most valuable lessons from the past, and how might they help us become better retailers?<\/p>\n
There are many valuable lessons to learn.\u00a0 Perhaps, one of the most important lessons is that \u201cthe customer is always right.\u201d\u00a0 Some attribute that phrase to Marshall Field, while others say that Rowland H. Macy\u00a0(1822-1877) first coined it.\u00a0 Although its origins are obscure, its message is very clear.\u00a0 The purpose behind retailing has always been and will continue to be to serve its customers.\u00a0 Everything else is of secondary importance.\u00a0 The principal responsibility of all retailers is to provide their customers with the best possible retail experience within a pleasant shopping environment.<\/p>\n
Shoppers, in turn, agree to pay fair market prices for goods and services\u00a0that they cannot provide themselves easily.\u00a0 It is essentially a for-profit service-related industry even if retailers never admit this connection.\u00a0 Retailers achieve their profit goals through calculated risk-taking.\u00a0 They meet this formidable challenge by doing all the background work upfront.\u00a0 That includes acquiring set merchandise; preparing it for sale and then marketing it.\u00a0 These business actions relieve shoppers of the frustration resulting from the reckless pursuit of affordable, quality merchandise from a multitude of reputable and un-reputable jobbers\u00a0or vendors.\u00a0 As everyone recognizes, uncontrolled shopping is at best a grueling task with questionable rewards.\u00a0 Retailers minimize their anxiety by enabling their customers to walk into their premises, purchase whatever they want and leave with these items in hand.\u00a0 What could be easier?\u00a0 However, it is anything but simple.\u00a0 In order to run smoothly, retailers must be willing to handle any-and-all financial difficulties and resolve all human resource issues related to their operations.\u00a0 That was true in 1900 and it is still true today.<\/p>\n
Successful store owners with rare exception use the capital generated from customer purchases and outside investments to meet debt obligations; pay employees, restock merchandise and compensation investors.\u00a0 They may also use these funds to enlarge their premises, change merchandise, close unprofitable outlets or build new facilities.\u00a0 Long-term financial success often involves further capital outlays through either buyouts or consolidation.\u00a0 However, before any of this unfolds, retailers must first establish a solid financial foothold within their community.\u00a0 That begins with repeat business.<\/p>\n
Frequent visits to the same stores often prompt cordial relationships between store owners and shoppers.\u00a0 Each learns to trust the other, since each needs the other.\u00a0 Any breach in this trust may prove disastrous especially for the retailer involved.\u00a0 Many owners regret the day when they hired a disgruntle employee, placed a defective item on their shelves or failed to lower prices quick enough to meet customers\u2019 needs.\u00a0 Fierce competition affords no place for error.<\/p>\n
Adopting \u201cthe customer is always right\u201d policy provides a safety net for retailer and shopper alike.\u00a0 However, there are times when it does not apply.\u00a0 For example, retailers readily prosecute shoppers who engage in shop lifting or writing forged checks.\u00a0 Today\u2019s security-conscious world with its surveillance cameras, metal detectors, inked security tags and security guards reflects this kind of thinking.\u00a0 Modern safety measures, in many instances, do prevent or stop crime.\u00a0 However, they are far from foolproof.<\/p>\n
Perhaps more publicity releases warning shoppers about tough new laws might deter some criminal activity.\u00a0 It has worked in the past.\u00a0 Store officials also might use psychology to appeal to shoppers\u2019 vanities.\u00a0 Past department store owners often reminded customers that \u201cunreported thefts meant higher prices for everyone.\u201d\u00a0 Retailers often asked shoppers to report any instances of criminal activity occurring within their store.\u00a0 This appeal to their sense of right and wrong frequently worked.\u00a0 In exchange for their cooperation, shopkeepers\u00a0often routinely lowered the price of merchandise.\u00a0 Customers loved to save money and this tried-and-true psychological approach helped to curb petty crime.\u00a0 Human nature has not changed that significantly over the last several centuries, even if the way our society handles criminal behavior has changed.<\/p>\n
A second lesson from the past involves the issue of pricing.\u00a0 Of course, everyone wants the greatest number of quality items for the lowest possible price.\u00a0 It is an inherent part of capitalism.\u00a0 However, the predicament facing many retailers today is not pricing in itself; but rather, what happens when price considerations supersede all other in-house amenities.\u00a0 Traditional amenities common in earlier department stores included such things as beautiful display windows, attractive counter space, racks upon racks of quality clothes, luxury fashion shops and computer monitors detailing coordinates, sport suits, stilettos or hats.\u00a0 Remove those amenities and an entirely different retail experience unfolds.<\/p>\n
Today\u2019s warehouse clubs such as Sam\u2019s Club; Costco\u00a0and BJ\u2019s Wholesale Club\u00a0reflect the bare essentials.\u00a0 In their eagerness to provide the lowest possible prices, they have eliminated virtually all the traditional amenities one might associated with shopping.\u00a0 Some specialty shops still offer the ambiance and individual attention once an integrate part of department store traditions; however, their numbers are disappearing fast.\u00a0 Retail chains, such as Walmart and Target, offer limited amenities; unfortunately, many of their outlets appear dated.\u00a0 Updating them will undoubtedly increase the volume of business.\u00a0\u00a0 Welcoming environments encourage leisurely shopping and more per capita spending.<\/p>\n
Quality customer service is another valuable service from a bygone era.\u00a0 Today\u2019s consumers are smart shoppers and smart shoppers seek out the best possible merchandise at the lowest possible price regardless of the vendor.\u00a0 Well-trained sales staffs may serve to reverse this trend.\u00a0 Assistance by competent sales staffs in choosing the best possible item, product or service at the lowest price may ultimately outweigh exclusive price considerations.\u00a0 Salesmanship has always played an important role in retailing, although, it may manifest itself in different forms at different times.\u00a0 Today\u2019s Macy\u2019s, for example, relies on electronic communication sources such as Facebook, the store\u2019s blog, Twitter\u00a0and Pinterest\u00a0to interact with customers 24 hours a day.\u00a0 Other national and local department store websites do much the same thing.\u00a0 The interaction existing between customers and sales representatives helps to distinguish one retailer from another and one item, product or serve from another.<\/p>\n
Many department stores, as pointed out earlier, took great pride in offering top quality customer service.\u00a0 Personal interaction played a key role in their ultimate success.\u00a0 Store clerks talked freely with their customers about the many advantages of their products.\u00a0 Retailers went out of their way to carry the kind of merchandise desired by their shoppers.\u00a0 Salespersons with well-chosen words and personal charm often went a step further to lessen customer anxiety especially when it came to purchasing luxury items.\u00a0 This kind of top notch salesmanship\u00a0most often resulted in shoppers leaving that store happy.\u00a0 They knew that they had bought quality merchandise at a reasonable price from an honest merchant.<\/p>\n
It represented a wining experience for all involved.\u00a0 This positive interaction established between sales staff and customers guaranteed repeat business annually.\u00a0 Large modern retail chains might learn a great deal from their predecessors regarding the importance of salesmanship.\u00a0 Traditional sales staff knew how to close a deal.\u00a0 Most importantly, they did it in a friendly and honest way.\u00a0 The same cannot be said universally about today\u2019s salespersons.\u00a0 Self-service department stores\u00a0notwithstanding, many retail concerns still rely on salespersons to sell merchandise.\u00a0 Unfortunately, many store managers do not have the time or predisposition to train their staff on the art of effective salesmanship.\u00a0 This often results in less than enthusiastic salespersons who may offend the very shoppers they are supposed to assist.\u00a0 No wonder many customers choose to buy only from stores with the lowest prices.\u00a0 Price, not store loyalty, often determines where the final sale occurs.<\/p>\n
D\u00e9cor also distinguished one traditional department store from another.\u00a0 It became an essential part of their identity.\u00a0 For example, New York-based Lord & Taylor\u2019s\u00a0often featured signature parquet floors, while Cleveland\u2019s Halle\u2019s contained ornate glass counters.\u00a0 A massive ceiling dome with elongated recessed lighting highlighted Jordan Marsh\u2019s Shopper\u2019s World\u00a0store in Framingham, MA, while Wanamaker\u2019s\u00a0in Philadelphia incorporated non-functioning staircases into its massive street level edifice.\u00a0 Customers readily identified certain kinds of d\u00e9cor with particular stores.\u00a0 That identification subconsciously enhanced their shopping experience.<\/p>\n
Large national chains no longer invest in such lavish d\u00e9cor.\u00a0 Everything today is functional.\u00a0 However, Target\u00a0is an exception to this rule.\u00a0 Its decor with its elliptical, multi-colored, brightly lighted neon tubes strung out end to end is unique.\u00a0 Placed against red trimmed walls, red colored metal counters, and red colored phone stations these neon tubes add some flair to what would otherwise had been an unadorned background setting.\u00a0 Walmart and K-Mart\u00a0do not feature that kind of ornate wall designs or patterns in their various stores.<\/p>\n
Warehouse club owners place even less emphasis on d\u00e9cor.\u00a0 Plain exposed cement and concrete blocks topped by functional large steel rafters lend little charm to these functional structures.\u00a0 These retailers intend to process customers through as quickly as possible.\u00a0 This business approach works well when purchasing everyday staples; however, sterile surroundings, such as those, are not generally conducive for those buying luxury items.\u00a0 Most customers purchasing luxury products want to be pampered to a certain extent by the retailer.\u00a0 Fanciful d\u00e9cor heightens that kind of shopping experience.\u00a0 Traditional department stores knew that.\u00a0 Those retailers, who sold luxury items within beautiful background settings, profited the most.\u00a0 Small specialty shops still rely on d\u00e9cor to help sell their merchandise why not large warehouse clubs?<\/p>\n
Competition is indispensable to retailing.\u00a0 It forces retailers to remain on the cutting edge of change and innovation.\u00a0 Continually expanding the customer-base still represents one of the most effective ways to insure longevity.\u00a0 However, it must be done along ethical lines.\u00a0 Unmercifully underselling a competitor, with the intention of pushing that store into bankruptcy and then raising prices to new unprecedented levels, is considered by most retailers unethical.\u00a0 Although some retailers may on occasion abandon business ethics for their-own advancement, the majority still refrain from such overt practices.\u00a0 Many department stores, in the past, avoided ethical entanglements by concentrating on one kind of merchandise or a specific service.\u00a0 For example, one merchant focused on furs, gloves and hats, while another sold children clothes, dresses and shoes.\u00a0 They had plenty of items to choose from, no overlapping needed.<\/p>\n
Large cities, such as Cleveland, successfully operated a wide range of retail establishments, each with their-own select group of loyal customers.\u00a0 Geographical considerations, transportation lines and potential markets most often determined location.\u00a0 Large department stores in Cleveland most often concentrated downtown, while smaller outlets settled in outlying neighborhoods.\u00a0 Districts such as Broadway, Collinwood, Cudell, Glenville, Newburg, Ohio\u00a0City and Tremont, beginning in the 1870s, boasted a wide array of mom and pop stores.\u00a0\u00a0 Many of these operations were forced to either close their doors or merge with others during the Great Depression of the 1930s.\u00a0 Those that survived became stronger.\u00a0 The post-war years were especially profitable for large Cleveland department stores.<\/p>\n
The increased availability of high quality merchandise at reasonable cost, in conjunction with the migration of Cleveland\u2019s middle and upper class to the suburbs in the 1950s and 1960s, convinced many large downtown retailers to expand their operations into more remote outlying areas.\u00a0 Competitors often congratulated the \u201cloyal opposition\u201d on the opening of their latest suburban store.\u00a0 Most retailers believed that there was plenty of opportunity for everyone.\u00a0 Those taking the financial plunge to the suburbs, in the late 1940s and early 1950s, picked the best sites.\u00a0 Late arrivals also profited by establishing themselves either within the same retail complex or another nearby location.<\/p>\n
Retail market size along with the availability of inexpensive large land parcels and future growth possibilities determined actual location.\u00a0 More prosperous, densely populated communities such as Cleveland Hts., OH\u00a0or Parma, OH\u00a0took precedent over other less affluent, smaller regional market areas such as Elyria, OH\u00a0or Stow, OH.\u00a0 However, in the end all these areas enjoyed the benefits of this kind of first class retailing.\u00a0 Department stores giants, such as Halle\u2019s, Higbee\u2019s and the May Company, increasingly depended upon their branch stores to generate high profits.\u00a0 Each branch outlet successfully catered to a particular customer-base. These stores cared about their customers and took great pride in the community they served.\u00a0 This commitment to serve their community no matter what is not so overwhelmingly evident in today\u2019s world.\u00a0 Perhaps the fact that most department stores are national and not local based may account for this change in attitude.\u00a0 The necessity of these national corporations to continually generate high returns for various investment groups may also serve to explain this mindset.\u00a0 Whatever the case, these stores follow a proscribed business formula.\u00a0 It thrives on cutthroat competition, standardized items and set pricing.\u00a0 Those retailers not subscribing to this formula are often eliminated from this game.\u00a0 Innovative, locally owned stores rarely, if ever, pose a sustained threat to these national big box stores.<\/p>\n
With little direct competition, most shoppers buy from these national chains.\u00a0 The limited number of choices means that modern-day customers no longer identify with a certain store or group of stores.\u00a0 Instead, these shoppers seek out the best bargains.\u00a0 It is a never ending quest and they pursue with a vengeance.\u00a0 Price, not loyalty to a retailer, determines where they shop.\u00a0 Modern-day retailers could learn a great deal from their predecessors.\u00a0 Past success depended on their ability repeatedly to offer reasonably priced items readily identified with their store.\u00a0 Retailers accomplished this task by establishing their-own niche and then carving out their-own regional market based on their own proven strengths.\u00a0 Occasionally regional markets overlapped.\u00a0 When that happened, retailers reached an amicable agreement whereby the new arrival would either not sell within that targeted area or provide unique merchandise and services not sold by others there.\u00a0 Those kinds of \u201cunofficial\u201d agreements no longer exist in our highly competitive world.<\/p>\n
Self-service discount department stores\u00a0first emerged in the U.S. during the late 1940s.\u00a0 Derived in part from highly successful self-service groceries, these outlets provided both convenience and reduced prices.\u00a0 A unique retail approach whose time had arrived, many discounters soon discovered the pitfalls in operating this kind of previously untried store.\u00a0 As stated earlier, fair trade acts prevented them from selling top-of-the-line merchandise at discount prices.\u00a0 Their elimination in 1975 opened up the retail market for the first time in nearly seventy years.\u00a0 Discounters wasted no time before selling the same name brand items sold by downtown department stores but at lower prices.\u00a0 Although many discounters have come and gone over the last four decades, self-service discount department stores are still a crucial component of U.S. retailing.\u00a0 Discounters still generating sizeable profit margins\u00a0include T.J. Maxx, Target, K-Mart, Wall-Mart, and Marshall\u2019s\u00a0to name but a few.\u00a0 These establishments fit the lifestyles of many shoppers.\u00a0 Yet, there are still some problems facing this kind of retailing especially when it comes to such things as customer check-out process.<\/p>\n
Some technical advances in recording sales represented the extent of innovations made within the check-out process during the heyday of department stores.\u00a0 Retailers firmly believed that better documentation would insure more accurate records.\u00a0 Aside from that, they did little to speed up the check-out process itself.\u00a0 Standard procedures prevailed whereby a shopper paid a cashier for items bought using either cash or a credit card.\u00a0 After properly recorded the sale, the salesperson then handed the customers a sale receipt acknowledging the transaction.\u00a0 This purchasing process took anywhere from one to ten minutes to complete depending on the complexity of the sale in question and\/or the number of shoppers ahead of that particular customer. \u00a0\u00a0\u00a0Some national retailers, in the 1990s, such as J.C. Penney and Sears & Roebuck\u00a0tried to speed up the process by establishing centrally-located check-out stations placed strategically throughout their stores.\u00a0 Asked to form a check-out line, customers waited to be called by the next available cashier.\u00a0 That may have insured an orderly process; however, long check-out lines persisted.<\/p>\n
Self-service check-out stations in discounters such as Costco\u00a0or Sam\u2019s Club\u00a0represent a more modern approach to this age old issue.\u00a0 But, they are not perfect.\u00a0 Under this arrangement, customers scan their items and then pay for them with either a credit or debit card through a specially designed electronic registers.\u00a0 Fast and simple, it represented a major breakthrough in check out procedures.\u00a0 Yet, it is far from foolproof.\u00a0 In many instances, electronic registers fail to scan bar codes properly.\u00a0 Their inability to record correctly often requires customers to rescan items several times.\u00a0 Rescanning is tedious to say the least and most especially as the number of customers behind that individual continues to grow.\u00a0 On-site supervisors often assist confused shoppers through this process.\u00a0 Perhaps check out stations with better scanning devices might be able to resolve this issue.\u00a0\u00a0 Encouraging shoppers to scan the prices of their items while shopping and then pay for them with either a credit or debit card at the check-out station or through their-own electronic communication devices represents another viable way to sped up the check-out process.\u00a0 Whatever the approach, something must be done soon.<\/p>\n
Retailers, in our fast paced world, often downplay their obligations and responsibilities to their customers.\u00a0 Many analysts emphasize the importance of customer loyalty and how public mistrust has led to the closing of many quality stores over the past fifty years.\u00a0 However, few view it the other way around.\u00a0\u00a0 Historically speaking, traditional downtown department stores, in large cities like Cleveland, recognized the importance of maintaining their customers\u2019 loyalty and trust.\u00a0 Customers depended on their local retailers to do the right thing by them.<\/p>\n
Store owners insured a loyal following by providing their patrons\u2019 quality customer service and affordable merchandise all within easy reach.\u00a0 Reputable retailers rarely used bait-and-switch tactics.\u00a0 Most refrained from random price changes or false product claims.\u00a0 After all, their business reputation was on the line.\u00a0 Unfortunately, the same could not be said for fly-by-night operations.\u00a0 They often relied on unethical business tactics to gain quick access and profits within lucrative retail markets.\u00a0 Many of these stores folded quickly once the public discovered that they have been cheated.<\/p>\n
Unfortunately, some retailers today do not see consider customer loyalty that important.\u00a0 In their never ending pursuit of profit and low overhead costs, they think of customer loyalty as a quaint relic of a distance past, totally out of step with the modern era.\u00a0 Many of these retailers are not malicious in their intention it never occurs to them.\u00a0 Their lack of concern leads them to act quickly and, at times, irrationally all under the cloak of business efficiency.\u00a0 They claim their changes are \u201cbest for the business long-term even it negatively impacts the store currently.\u201d\u00a0 Their unpleasant remedies run the gamut from arbitrary price hikes; sudden closing of branch stores and consolidating non-essential departments to eliminating popular clothing lines, reducing shopping perks\u00a0and downsizing sales forces.\u00a0 These actions may make perfect sense to modern-day retailers on a tight budget, but they fail to please many customers who see these stores as serving them and not the other way around.<\/p>\n
Customers want consistency whenever and wherever they shop.\u00a0 They expect certain things.\u00a0 Arbitrarily changing operations without some public input may have disastrous consequences.\u00a0 J.C. Penny\u2019s unsuccessful attempt to change its image is such a case.\u00a0 This medium-prized store, in 2012, adopted a brand new retail strategy.\u00a0 Seemingly overnight, it transformed itself from a conventional department store into a new retail concern characterized by what they called boutique-like shops.\u00a0 The television star Ellen Degeneres beame its spokesperson.\u00a0 Executives at J.C. Penny\u2019s also eliminated traditional money saving coupons by proclaiming that their everyday low prices spoke for themselves.\u00a0 Bloomingdale\u2019s\u00a0recent re-emergence as an upscale, boutique-like department store served as its business model.<\/p>\n
However, unlike Bloomingdale\u2019s, which catered primarily to wealth, fashion-conscious customers, J.C. Penny\u2019s long-term success had depended on hardworking, middle class shoppers.\u00a0 These customers wanted consistency and value.\u00a0 They did not identify with slick advertising campaigns, clever promotional activities or in-house store gimmicks.\u00a0 Such promotions appeared less than genuine, and they wanted nothing to do with them.\u00a0 Suddenly, officials at J.C. Penny found themselves losing customers at an alarming rate.\u00a0 Its board, on the brink of bankruptcy, returned to traditional policies.<\/p>\n
However, there was more problem needing resolution.\u00a0 Store managers had marked-up certain items with the intention of applying discount coupons or current reduced sale prices at the registers.\u00a0 Customers, who had been trained to seek immediate bargains, did not appreciate such tactics and they let the managers know it.\u00a0 J.C. Penny officials immediately halted this practice.\u00a0 Fortunately, that blunder did not prevent shoppers from returning to the J.C. Penny fold.\u00a0 Projections for 2014-15 predict a bumper year for this national chain.\u00a0 Retailers, like J.C. Penny, should never lose sight of the fact that they are first and foremost a business whose chief responsibility is to sell goods to the buying public at fair prices.\u00a0 Loyalty to the customers while following traditional business practices symbolizes is a big part of that responsibility.\u00a0 J.C. Penny was indeed lucky.<\/p>\n