December 1986 | Volume 38, Issue 1
I can remember Mickey Mantle before he hurt his knees and the exact spiral of a pass from John Unitas to Raymond Berry, but I’m too young to remember the golden age of the American department store. That age occurred, I gather, from the 188Os to the middle or late 1950s, and people who care about shopping still grow misty at the memory.
And why not? The department stores of the golden age featured “reading and sitting rooms, ‘silence’ rooms for the frazzled shopper, specially lighted rooms where women could examine gowns to determine how they would look in ballroom gaslight,” not to mention “service [that] was defined by personal attention from store employees and in the stocking of exclusive or unique merchandise. …”
Sounds pretty good, doesn’t it? This description comes from a tender and bitter essay, “A Sad Heart at the Department Store,” by Marjorie Rosenberg, which appeared in the spring 1985 issue of The American Scholar . Though I don’t remember the golden age of the department store, Rosenberg’s essay—part love song, part lament—got me interested in finding out something more about the pleasures I had missed.
According to Robert Hendrickson in his book The Grand Emporiums , the first true department store was Bon Marché of Paris, established in 1838. Its founder, Aristide Bouciçaut—a man “no bigger than Napoleon and ultimately much more successful,” Hendrickson says—based his business on policies that were very unusual at the time. Customers were encouraged to enter the store and browse for as long as they pleased. Fixed prices were marked on all goods, so there was no unpleasant haggling. In what struck many contemporary merchants as a concession close to insane, customers were given a money-back guarantee.
The business policies popularized by Bouciçaut in Paris were taken up by the owners of such American emporiums as A. T. Stewart’s, Wanamaker’s, Macy’s, Strawbridge & Clothier, and Marshall Field’s. John Wanamaker of Philadelphia, probably the greatest of our nineteenthcentury department store magnates, remembered the practices that prevailed in earlier times: “The law of trading was then the law of the jungle, take care of number one . The rules of the game were: don’t pay the first price asked; look out for yourself in bargaining; haggle … as hard as you can. … And when a thing was sold, it was sold—no returns.”
Zions Cooperative Mercantile Institution of Salt Lake City, founded in 1869, claims to be America’s first department store, and certainly it was our first incorporated department store. But the distinction of being the first recognizably modern department store in the United States probably belongs to either the Marble Dry Goods Palace, built by the New York merchant A.T. Stewart in 1848, or the Cast Iron Palace, built by Stewart in 1862.
In the Marble Palace, which still stands as a block-long office building near City Hall Park in New York City, Stewart held the first American fashion shows and sometimes rang up sales of ten thousand dollars in a day. The newspapers of the time called him “Stewart the Great” or “King Stewart.”
The king held his throne by treating his customers royally. “Never cheat a customer, even if you can,” he told his clerks. “If she pays the full figure, present her with a hair of dress braid, a card of buttons, a pair of shoestrings. You must make her happy so she will come back again.”
One customer who came back again and again was Mary Todd Lincoln, who redecorated the White House with goods purchased entirely from Stewart’s and who, at the time of her husband’s death, owed twenty-seven thousand dollars to Stewart’s for clothing. When Stewart himself died in 1876, fifty-three years after he opened a small store with three thousand dollars’ worth of Irish linen and laces, he left an estate worth more than fifty million dollars.
What distinguished the department stores of the golden age from the general stores and dry goods establishments that preceded them was, in the view of Marjorie Rosenberg, the “institutionalization of trust between buyer and seller.” That trust was made visible in such business practices as marked and fixed prices and the money-back guarantee. But there was more to it. There was also the role played by the department store in the community it served—a role “impossible to define in purely economic terms,” Rosenberg says, because it rested upon a feeling of local rootedness.
Consider Rich’s department store in Atlanta. In the 1920s, when the price of cotton plummeted, Rich’s announced that, to help farmers through the crisis, it would buy five thousand bales at well above the market price. In 1930, when Atlanta could not meet the payroll for its schoolteachers, Walter Rich suggested the city pay teachers in scrip redeemable for cash at his store. At the time of the great Atlanta fire of 1917, and the Winicoff Hotel fire of 1946, the store “assisted bereaved customers financially, even providing burial clothes for many of the victims.”
In recent years, Rosenberg charges, as more and more local enterprises have come under the control of larger chains with headquarters in distant locations, the sense of a vital tie between the department store and the community has diminished. Limited support of local activities still exists, but that support strikes her as tainted—based “not on a relationship with the community, but on the possibility for tax deductions.”
Though I found much to admire in Rosenberg’s essay, I also found much to question, and my questions began at this point in her argument. Is it really so difficult to find contemporary examples of department stores that play active roles in their communities and help out in local emergencies? An official at NeimanMarcus was happy to provide me with the names of a couple of dozen charities that it supports—everything from the Dallas Ballet to the Texas Coalition for Juvenile Justice, from the Salvation Army to the Dallas Black Chamber of Commerce. In recent years Rich’s has contributed to the creation of a new zoo in Atlanta, acquired art for regional museums, renovated a shelter for the homeless, initiated a Meals on Wheels program, and established in its downtown store an alternative high school, the Rich’s Academy. What difference does it make if tax deductions encouraged these activities?
The department stores of our own era make Rosenberg sad, she says, because everything about them reflects an obsession with short-term profit. “Unique merchandise, individual attention, and special services have become highly unusual. … The ambience of comfort, luxury, and beauty that was inextricably bound up with respect for the customer and the desire to cultivate lifelong loyalty has been sacrificed to a marketing technique that foists on the buyer huge quantities of merchandise as a substitute for real variety, and manipulation of prices as a substitute for quality.”
These tactics have led to the loss of the trust so diligently cultivated during the golden age. Shoplifting and employee theft have also become huge problems. By the mid-1970s such “shrinkage” had reached 5 percent of sales in many stores, and experts estimated that one out of ten department store shoppers was a shoplifter.
The stores have fought back in predictable ways: “Silent security guards stand at entrances where uniformed doormen once greeted regular customers by name. Plastic chains … rivet highpriced sportswear and coats to the racks on which they hang. Every item of clothing bears a large plastic tag with a miniature transmitter that will trip an alarm if the article is stolen.” The whole scene is deplorable, and it’s not the fault of the people who steal, Rosenberg claims; they are merely responding to an “essential repudiation by the store of its responsibility to its customers.” The fault lies not with the shoppers but with an “increasingly powerful managerial class that prospers at the expense of the gross national amenity.”
I’m willing to accept Rosenberg’s description of the inadequacies of our department stores, but I find it impossible to share either her rationalization of the causes of theft or her indignation at the management. I don’t believe that contemporary executives are as incompetent as she claims, but even if I’m wrong about that, I’m confident that we can rely upon the marketplace to punish their incompetence.
As consumers, most of us buy what we want to buy and shop where we want to shop. If something costs more than we’re willing to pay, we don’t buy it. In every discretionary transaction (to borrow the language of economists ), we’re exercising our sovereignty as consumers; we’re choosing what to buy and when and where to buy it.
Choice shapes the economy. People who find department stores intolerable will cease to tolerate them. They will decide that they prefer to stay home and make purchases out of mail-order catalogs, or that they prefer to shop out of the electronic catalogs now beginning to be available through cable television, or that they are willing to pay a little more for the amenities available at some other store. The department stores that fail to satisfy their customers—like the Gimbels in my neighborhood in Manhattan—will go out of business.
On the other hand, if people continue to shop at department stores, it must be because, all things considered, they prefer to do so. Rosenberg blames executives for the decline in what she describes as the “gross national amenity,” but she might as well blame free enterprise, because in a market system, amenities are bought and sold, not given away. The preferences of more than two hundred million consumers decide what goods and services will be available, and at what price. When all is said and done, I suspect that Rosenberg is sad because the amenities that especially appeal to her cost more than most of her contemporaries are willing to pay.
One consolation is available. If enough people share Rosenberg’s preferences, then it won’t be long before some bright lad or lass opens a store that caters to their desires. The customers will get what they want, and the enterprising youth will get rich. That is the beauty of a market system. If enough people set their hearts on something, other people can make money by selling them what they want. It’s a brilliant way to organize economic activity. On your next trip to a department store, take a moment to think about it that way. It may make you happy.