Why department stores

They also provided demonstrations, lectures, and entertainment events that appealed to newly wealthy customers looking for how best to use their disposable income. Today people are still looking for content and experiences as part of their shopping activities that can help influence what they buy.

In , brands are finding success in building strong content- and experience-led commerce experiences. The first cash register. The first cash register was invented by James Ritty in This invention went on to spark the ease of customer checkout for over a century, as it was quickly adopted for retail sales. Over time, advances in cash registers have worked to make them more resistant to theft.

Later POS point of sale systems have advanced the cash register industry even further by providing computerized cash registers that can keep track of inventory, process credit cards, and provide multiple connected touch-screen terminals in addition to helping to manage profit margins. As customers are shopping more omnichannel than ever — including shopping from the same merchants both online and in-store — businesses are also seeking methods to combine POS systems and payment gateways so they can keep track of inventory across channels.

However, these early cards were usually issued by hotels or individual businesses and could only be used within their companies. The first universal credit card that could be used at multiple establishment was the Diners Club card in The first bank-run credit card was started by Bank of America in Credit cards are also now much more likely to carry debt as consumers use them to make up for budget shortfalls.

Southdale Center in Edina, Minnesota. As touched on in the introduction, the concept of malls as central locations where customers can visit multiple merchants has been around since the agoras of Ancient Greece. However, our more modern concept of malls — as physically built shops connected in one location with communal facilities — began in the 20th century.

The first shopping mall was technically an outdoor shopping plaza that opened in in Kansas City. However, the first indoor shopping mall that mirrored how we think of malls today was opened in in Edina, Minnesota.

Malls were often anchored by a large department store with a cluster of other stores around it. The growth of these shopping centers was correlated with the growth of automobiles. With cars available to the masses, more people were leaving cities and commuting from the suburbs. The mall was envisioned as a cultural and social center where people could come together and not only do their shopping but also make an activity of it.

With ecommerce sales growing, the appeal of malls has gradually declined, hitting a year low in sales in That said, some digitally native brands are still exploring in-person shopping at new mall-type environments. One example is Neighborhood Goods outside of Dallas, Texas, which features a rotating series of pop-up shops from different merchants.

What can we learn from this? While the traditional malls of old are no longer the exciting experience they once were, shoppers still do seek out experiences around shopping both online and offline. The very first Walmart in Rogers, Arkansas. While people loved malls for the social aspect and enjoyment of window shopping and moving from store to store, there was also a renewed interest in a return to the one-stop-shop.

However, unlike the mom and pop general stores of old, these large stores served bigger populations and provided items cheaply at a much bigger scale.

In the first Walmart opened its doors in Rogers, Arkansas. Target and Kmart also opened their first stores that same year. The efficiency and overall size of these indoor giants made them attractive to consumers looking for convenience and friction-free, no frills service.

At these big box stores, customers could find the consumer goods they needed, and at much lower prices. This was made possible by changes in the laws after World War II that paved the way for discount retailing. Big box stores, and specifically Walmart, are still dominating in the present day.

Arguably one of the biggest flashpoints in retail history is the dawn of widespread internet shopping. Expanding a business, any business, requires large amounts of capital. Unfortunately, many early 19th century New York retailers lacked the kind of capital necessary to meet these growing challenges. 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.

Long-term investments by the rich led to the establishment of many successful Manhattan department stores during the mid to lateth century. Those investors readily lent both their business expertise and extensive financial resources. 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.

Every large city in the U. Much of their success originated with the uncanny knack of these talented retailers to provide quality goods and services within a friendly business environment. Marshall Fields of Chicago led the pack with its ever-popular Tea Room, European buying rooms and special bridal registry. However, there were other crucial elements that played into their hand.

A respected 19th century Cleveland retailer named E. McGillin summed it up best. He suggested that large department store owners enjoyed a decided economic advantage over small shopkeepers in that they had access to great amounts of capital and large inventories, not readily available to smaller store owners. He believed that a great majority of large retailers sustained their leads by selling many popular items at below-cost.

Selling in volume like that generated huge profits. Those not having access to large inventories or vast amounts of capital often found it virtually impossible to sustain themselves on low profit margins. In the end, these less affluent shopkeepers found themselves charging much higher prices for the same goods sold by big retailers at a fraction of the cost. McGillin pointed out that the Panic of reinforced the business adage that prized merchandise must be sold at the lowest possible price.

Many of these businesses were small to medium sized stores with limited capital reserves. McGillin contended that easy credit following the Civil War led to the establishment of these fly-by-night firms. He further argued that sound businesses never depend on easy credit. Instead, they acquired gold and silver reserves as collateral. Those without such reserves declared bankrupt when the economy soured. According to McGillin, customers in the s enjoyed an advantage of earlier generations in that they have the where-for-all to shop around for the best possible deal.

They turn, more often than not, to well-established department stores for their goods. Large-scale department stores required carefully orchestrated business planning. 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.

Certain staples within the industry such as advertising, customer services and salesmanship grew more sophistication over time. Successful late 19th century retailers often used psychology to promote sales. Store owners wanted their customers to buy as many items and take advantage of as many services as possible. The sky was the limit. Also, every establishment developed its-own identity. Many focused on everyday shoppers, while others concentrated on the needs and wants of the growing middle and upper classes.

Whatever their customer-base, all retailers conveyed a similar message. Some transported their shoppers to distant and exotic lands through high priced, imported merchandise. These items included such things as expensive perfumes, fine wines, rare cheeses, luxurious furs and designer jewelry. Others emphasized everyday items such as auto parts, appliances, work clothes, stationary and tools.

This kind of merchandise required little fanfare and practically sold itself. Showmanship represented half the battle, knowing what the shoppers really intended to buy was the other half. Through it all, common sense prevailed. 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 at a fair price.

Store owners knew all too well that if they slacked in their chosen roles that other retailers were prepared to serve their every need. This new approach to retailing whereby the customer was always right ran counter to the take-it-or-leave-it philosophies of general stores.

Known for supplying hardware and software products within a no-frills environment, general stores served a useful function for many years. 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.

With the advent of the Industrial Revolution and the elimination of the American frontier, all of that changed. Insightful department store owners distinguished between hardware and software items with most focusing on one or the other. Competition among department stores, from the s to the s, intensified greatly.

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. Daily newspaper advertising played an ever important role in promoting individual department store merchandise and services. The idea of advertising was not new.

Astute retailers in the U. 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. Its intensity, rather than its goals, changed over time. Most early and midth century advertising occurred in local newspapers.

These advertisements, often found on the front page of dailies, were often limited to a few lines. They described the item or items for sale at a particular retailer along with its cost. However, merchandise promotions through the local press expanded quickly. Department stores, by the early s, ran full page advertisements extolling the many virtues of the product or products for sale.

But, they got the job done. Increasingly, retailers stressed the need for the middle class customers to emulate the wealthy. Advertisements, throughout the s, featured testimonies by celebrities and sports figures promoting merchandise. The s saw the introduction of Sunday newspaper pictorial sections. Called rotogravures, they detailed community social events through photographs. They were often accompanied by full-page advertisements showing the latest fashions found in a certain store.

Motion pictures also promoted department stores, but in a somewhat different way. Not relying on store advertising to sell their productions, Hollywood producers took great care when it came to selecting department stores for their films. Like other successful business leaders of their day, Hollywood promoters wanted the biggest bang for the buck.

Only the best and biggest department stores got their names on the marquee. Movie newsreels also featured department stores. Asia Pacific held the largest departmental store retailing market share in , followed by North America, owing to rise in income and purchasing power and increase in brand consciousness.

Moreover, reinvigoration of department stores retailing due to technological advancements pertaining to store automation and card-to-cloud concept also drive sales of in the departmental store retailing market. East Asia and South Asia hold a prominent market share owing to a large consumer base. Amid the outbreak of the global COVID pandemic, the community code word is - stay at home, stay safe.

Even though most stores have returned to business, a few departmental stores were up and running even during the lockdown. However, there is apprehension over the public visiting. The FDA is sharing information about best practices to operate retail food stores, restaurants, and associated pick-up and delivery services during the COVID pandemic, so as to safeguard workers and consumers.

Thus, the departmental store retailing market experienced slightly low sales in 1st two quarters of , and is expected to be back on track from the 4th quarter of A brief overview of the changing landscape of the departmental store retailing market has led our analysts to conclude that, the market is gaining momentum.

Adoption of automated department stores and artificial intelligence is expected to influence the overall market over the coming years. On the other side, increasing demand for premium brands, especially in the U. BHS: Where has all the money gone? BHS: What are the next steps? Image source, Getty Images. Merchandise under one roof. John Lewis says it stocks , products in its 46 stores. Social function.

Shopping and socialising: A chance to chat, recuperate and plan the next purchases, perhaps? Retail theatre. Part of London department store Liberty's appeal is its s era Tudor revival building. Christmas extravaganza.

Paris's Galeries Lafayette, still combining retail theatre and Christmastide extravaganza.