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The Department Store: Past Glory, Uncertain Future

16 Oct 2015 by Teresa Meek

It is a truth universally acknowledged — even on, Department Store Day (Oct. 16) — that nothing beats the Internet for shopping convenience.

But the grand department store as it existed between 1920 and 1960, when white-gloved ladies clicked their high heels across marble floors to a bustling tea room, later descending in a gilded elevator cage to magnificent window displays and an Art Deco façade below — begs us to consider: Is convenience everything?

When it comes to commercial survival, it may well be.

Then again, today’s shoppers, like their predecessors, like to sit on a sofa before they buy it, to try on that dress with the green-and-orange swirls to see if it could possibly work, to run their fingers across its fabric.

Until the online world can duplicate these experiences — and undoubtedly it will — there is still a role for department stores, albeit a diminished one, even as their market share steadily declines.

A place for women

The department store was a product of the Industrial Revolution, which created an affluent middle class with the means to buy the latest fashions and decorate their homes with factory-produced furniture. It was a boon to women, one of the few places outside the home where they could safely shop, browse and socialize.

The first department store may have been Harding, Howell & Company's Grand Fashionable Magazine, which opened in London in 1796. Over the next century, similar institutions opened their doors across Europe and the U.S.

Early department stores were small and dark compared to their later iterations, with merchandise secreted behind display counters. But the concept was a winner from the start.

The driving force behind the department store as we know it was Harry Gordon Selfridge, who left school at 14 and rose to become a partner at Marshall Field’s in Chicago, which was opened in 1852. Selfridge created appealing display windows and lit them up at night for all to see. He installed telephones. He may have coined the sales commandment, “The customer is always right” and the holiday mantra, “X shopping days before Christmas.”

But his boss, store founder Marshall Field, was conservative and did not approve of some of Selfridge’s newfangled ideas (Selfridge crossed the pond to England and opened his own store, where he could innovate to his heart’s content.) Though Field’s was the first store to adopt revolving credit, escalators and personal shoppers, its owner drew the line on mannequins in underwear, sales clerks in makeup and window displays on Sundays.

Growth and heyday

Marshall Field was soon joined by Macy’s in New York (1858) and Hudson’s in Detroit (1881), which formed the department store triumvirate of the 19th and early 20th centuries. Business grew as demand for consumer goods tripled between 1909 and 1929. Sales shrank during the Depression but rose again in the war years.

In 1924, immigrant workers from Macy’s hosted a Christmas parade with floats, bands and zoo animals. It attracted a crowd of 10,000 and was repeated over the years until it turned into the annual tradition known as the Macy’s Thanksgiving Day Parade.

Department stores became downtown fixtures in the ‘20s and ‘30s, and were remodeled with Art Deco facades, soaring ceilings and marble floors. Some added elegant tearooms and restaurants, or even concert halls. People went to the department store for bridge lessons and film screenings. The stores became informal community centers.

Moving to the ‘burbs

Department stores began to struggle a bit in the 1950s, as families decamped to the suburbs. The problem intensified in the ‘60s, when civil unrest made shoppers fearful of going downtown with their children. New discount competitors like Walmart, Kmart and Target began to siphon off some business. An estimated 2,000 shopping malls were built, and many landmark city department stores went out of business.

Though the ambiance of the department store changed in its new shopping mall location, surrounded by fast-food courts and trendy teen stores, it remained a significant social gathering place through the 1990s.

The Internet age

Then came the Internet and Amazon. By 2008, 20% of malls were failing; 200 more are expected to close over the next 10 years.

Nevertheless, a 2013 survey found that department-store-anchored malls can succeed if they have the right mix of shopping, entertainment and community activities. Some have installed fitness centers, children’s museums, ice rinks and hair salons to attract today’s busy, multi-tasking customers.

Omnichannel retail

Besides including the right mix of on-site activities to succeed, department stores today must offer consumers more online and mobile shopping options. However, this comes with risks from cyberattacks, which are becoming increasingly sophisticated. The retail sector is a natural target for financially motivated attacks, given that it involves the transfer of large amounts of money, whether in physical department stores or online.

Among the most well-known companies hit with data breaches are Kmart, Neiman Marcus and Target. For example, the attack on Target in late 2013 was so extensive that the company continues to be plagued by financial repercussions. It was recently reported that Target was nearing a data breach settlement with Visa, in which card issuers would be reimbursed by as much as $67 million.

The future: robots

Assuming they survive at all, who knows what innovations tomorrow’s department stores will bring?

One store in Tokyo is using a kimono-clad female robot as a receptionist to guide customers.

Today she can only read programmed scripts, but tomorrow she may replace store clerks. Perhaps she will someday hold a tea ceremony, raising her cup in a toast to lost traditions.