Thread by @stevesi

Book reco: Retail selling, specifically US department stores, have a long and rich history. Studying that history can be a great way to inform opinions on many debates going on today (🙄Amazon). "From Main Street to Mall" (2015) is a wonderful history. 1/ amazon.com/Main-Street-Ma…

[As it is holiday season it is always a good time to remember one of the most famous holiday films of all time takes place in the context of two department stores doing battle over Santa Claus and customers. (streaming on HBO)]

2/ Author Vicki Howard, lecturer at Univ of Essex, does a wonderfully researched history of the dawn of Main Street department store as it evolved through two world wars, trust busters, baby boomers, computerization, suburbanization, more. Lots of sourcing from trade pubs ❤️

3/ Tracing the history chronologically starting with the late 19th C. "Palaces of Consumption" tailoring their "dry goods" to women and household needs then on to formation of department stores. To modernizing Main Street. The early days characterized by luxury, service, quality.

4/ Especially interesting is the role of the New Deal and then WWII on stores. Retail of course had an enormous difficulty during the depression. The role of store credit, discounting, and varying goods are explored.

5/ WWII brought new challenges and suddenly retail was classified as "essential business" (sound familiar?). Dept stores created sections with "black out" goods. Had to deal with lack of labor (forever changing how sales were done). Then post-war consumer boom.

6/ Post war really changed department stores—they were primarily based in the urban core but all the customers were moving to suburbs. Along with this came all the challenges of urban/suburban planning. The rise of strip malls (innovation!), parking lots, and more. HUGE change.

7/ What really changed post-war was the arrival of discounting, self-service, national brands v. house brands (though much is discussed about this earlier in the book as well). BTW, book has a number of excellent photos/lithos.

8/ What I love about the book is that it "ends" before the arrival of Amazon, so in a sense it lets you learn this history without being clouded by the news of the day. The final chapter is about the "death" of department stores. Brutal.

9/ A few things really stuck w/me. Disclaimer: I'm a product of retail. When I was born, my father was working the sales floor at Bloomingdales, became a jobber, opened his own retail shop, then his own jobber (which I computerized!). The family store names are all in my DNA.

10/ Regulation. First, the challenges of regulating retail have been around since the very beginning. Early days of retail included RPM (resale price maintenance). Is it ok for a mfg to set prices that must be maintained or NOT?

11/ Turns out it depends on who you ask when. During the depression, everyone wants low prices. During expansions, national brands (& stores) want more control. But who is in control if there are jobbers in middle? The whole idea of "loss leaders" and "fair trade" detailed?

12/ Capital markets. The saying goes "retail is brutal" (note: its really brutal as a family business). Capital and cash flow are everything in retail. But the financialization of "everything" created great opportunities to expand retail (more stores, more selection, credit, etc)

13/ Labor. The theme of labor goes throughout the whole arc. Early stores almost exclusively employed women, white women. Then the tensions over PoC, but the desire to serve more customers. Then wartime challenges. Then labor-saving "cuts" to retail experience. So many issues.

14/ Structural changes. Department stores grew up with the country. From the general store to palaces to discounters to malls, each generation had enormous impact on the community and community infrastructure. Sometimes retail pushed. Sometimes it resisted changes.

15/ Side effects. At every step in history of retail govt and industry regulation was used/resisted by players almost "as expected" and at each step unintended side effects dominated the impact.

16/ Fascinating example of that was the ban on mergers between dept stores (even before modern Federated). This ended up creating conglomerates as a byproduct. Since those economics didn't work, ultimately all of retail was weakened. Oops.

17/ Fighting against discounting is a constant theme (one our family biz constantly struggled with). Reading how incumbents fought back against discounting and some "myths" that were put forth was a personal deja vu (eg "low quality" products).

18/ Another side effect was how enforcing fair trade (meaning prices can't be lower across retailers) only ended up creating inflation, right when the market was trying to control price inflation. Basically, economics 101 stuff that regulators thought they could outrun.

19/ Retail is a constant struggle to deliver the right goods at the right time with the best prices to customers. That's it.

The model of doing that evolves, reinvents, and iterates. It is way more sophisticated than many on the outside often consider.

20/ Almost none of the retailers covering 120+ years still exist, those that do are nothing like they once were. Retailing is brutal.

At each step, incumbents acted the part (innovators dilemma) and insurgents went through their own journey (product market fit, scaling).

21/ Ultimately retail is a story of Schumpeter's Creative Destruction and/or Clay's Innovator's Dilemma.

The book shows how disruption happened slowly, then quickly. For example, we might think department stores "died" 10, maybe 20 years ago. But really it started in 1965.

22/ Lots of opinions on how retail is changing now, but reading a book like this (though this is fairly unique) provides a good grounding in how much today's commentary has been experienced multiple times. The names and technologies change, but challenges don't seem to. // END

PS/ an ♻️ed thread on how the patterns described over a century in this book repeat.

Amazon: Retailers Gonna Retail medium.learningbyshipping.com/amazon-4648bdf…