With the rise of industrialism came mass production; endless goods could be cheaply manufactured. What merchandisers had to master was mass consumption, convincing customers to purchase those things they once produced for themselves. Beginning in the 1840s and accelerating thereafter, a new approach to retail trade made its appearance. Although the term department store did not become commonplace until the 1880s, the idea of a large store housing many different "departments"�housewares, apparel, toys, books, and so on�was well established by the end of the 1860s.
Names such as Bloomingdale's, Filene's, Gimbel's, Hudson's, Macy's, Marshall Field, and Wanamaker's became familiar during this period as hordes of eager shoppers flocked to increasingly lavish emporiums. Located in the hearts of the nation's burgeoning cities, department stores offered patrons a cornucopia of choices unlike anything ever encountered before.
Architecturally, these multifloored "palaces of consumption" often featured ornate cast-iron facades with vast, open interiors. At times they boasted fanciful domes and skylights that flooded the interiors with natural light in the days before electrification. Plate-glass windows on the street level allowed elaborate displays of the treasures within, thus making "window shopping" a new urban leisure activity. Since the store itself was palatial, this focus on display created an atmosphere. It produced the proper environment for purveying goods that were seen as marks of achievement instead of necessities. Everything was ready-made; rather than bolts of cloth, here were racks of dresses. These were items for instant use, for immediate gratification.
To compete with one another, department stores offered a remarkable array of "customer services" including soda fountains, restaurants, tea rooms, telegraph and telephones, lost-and-found, post offices, lounges for gentlemen and sitting rooms for ladies, beauty parlors, checking and charge accounts, child care, first aid, delivery services, lectures, libraries, background music, and even art displays. For this new merchandising concept to be profitable, certain expectations evolved. Unlike the merchandise of peddlers and rural stores, prices were clearly marked and fixed. Bargaining was not allowed, which meant cheap labor (relatively inexperienced workers who could serve as clerks and cashiers). Prices were deliberately kept low so that stock would move more rapidly. Finally, with departmentalization, the firm could audit each area of merchandise and make any necessary changes to maximize profits.
To realize these expectations, department stores began, in the 1880s, to advertise heavily in daily newspapers. In fact, these new enterprises were major contributors to the rapid growth of urban dailies during this period. Eager consumers wanted to buy, but it was thought they might be uncertain about what they desired. Shopping was no longer a question of fulfilling needs; it was a process of creating wants, and advertising went far in promoting the desire for goods with extravagant display ads.
Department stores nevertheless remained an urban phenomenon. As late as the 1920s over two-thirds of American retailing was still accomplished through general stores, or single-unit shops such as hardware, drug, grocery, clothing, furniture, and so on. But department stores did have a significant impact: the concept of a fixed price became standard; rapid turnover, inventory control, and even increased advertising were taken for granted.
Rural America, however, was not ignored. Mail-order retailing had been attempted, rather unsuccessfully, in the earlier nineteenth century. But the concept blossomed when, in 1872, Montgomery Ward initiated such a business with the motto, "satisfaction guaranteed." Ward's catalog, or "wish book," opened the cornucopia still more, allowing millions to participate in the retail revolution that had previously passed them by.
In 1886, Sears, Roebuck and Company was founded. Destined to become the nation's biggest retailer for most of the twentieth century, Sears surpassed Ward's in sales in 1900. Regardless of what the mail-order firm was, the endless catalogs served a remarkable unifying function for the country. These profusely illustrated books were the ideal vehicles of Americanization; by perusing their pages, avid readers knew what other Americans wore, ate, and read.
The success of mail-order shopping led to the inevitable: in 1925 Sears opened its first retail store; Ward's followed suit almost immediately. The mail-order house had gone from coexisting with department stores to directly competing with them.
Local merchants found this dual level of competition beyond their limited means. Thus were born chain stores�J. C. Penney, F. W. Woolworth Company, S. S. Kresge Ltd., S. H. Kress, Grant's, Ben Franklin Stores�a simple idea with far-reaching results. By banding together, chains eliminated the middleman, the jobber; like their larger competitors, they could handle their own warehousing, shipping, and financing, thereby keeping costs down and passing the savings on to customers. Over two thousand chains with three or more stores existed by 1914, and that number would continue to grow. Since smaller towns lacked sufficient populations to justify a full-blown department store, the chain store filled a specific need.
Any protests against new marketing techniques were swept aside as department stores, chains, and mail-order firms established their complete retail dominance in the years before World War II. With the return of peace, Americans found themselves prosperous and anxious to buy; there existed a willingness to go into debt to satisfy wants. This period also witnessed the first indications of a desire to move to the suburbs, a desire that would ultimately turn into a virtual exodus from cities. The core clientele for the traditional urban department store began moving away, and the once-proud downtown flagship stores soon found themselves empty.
Seemingly overnight the country saw the rise of the suburban shopping center, ranging in size from a narrow strip of neighborhood shops to a vast mall serving an entire region. Although these shopping centers and malls were usually anchored by one or more branches of prominent department stores, the actual facilities were pale reflections of an earlier grandeur.
Discounters also began to move into selected shopping centers. Not a new marketing concept, discount stores had appeared during the Depression. Whereas a department store might mark up items 45 percent, the discounters cut their margins to 30 or 35 percent. In addition, the discounters attempted to turn over their inventories as quickly as possible�nine or twelve times a year, compared with the old department-store average of four or five times a year. They pioneered self-service, thereby greatly reducing personnel costs. Customers did not seem to mind the loss of personal attention, and the discounters boomed.
The year 1962 marks a seminal period in American retailing. It was then that the first Kmart opened, as did the first Woolco, the first Target, and, in Rogers, Arkansas, the first Wal-Mart Discount City. By 1973 discount chains had captured 20 percent of the retail market, and the department-store share had shrunk to 14 percent. The discounters' growth continued unabated: in 1991 Wal-Mart passed Sears to become the nation's largest retailer, a title the company continued to hold into the twenty-first century.
And so the department store, long the unchallenged leader in retailing, has had to adjust to a new, more subordinate role. In order to compete in today's cutthroat arena, department stores must pose as boutiques or offer a level of service that no one else can equal. Many, in the face of competition and declining sales, have retreated into an emphasis on women's fashion and attire. In addition, Internet retailers may eventually force many department stores out of business; only the strongest stores (those with the best prices, selection, and reputation) will survive. Most have abandoned the toys, books, garden supplies, furniture, and appliances that formerly made them one-stop shopping. Nonetheless, department stores, with their enduring window displays and still-lavish interiors, continue to indulge and sustain American consumer fantasies.
The History of Department Stores
Encyclopedia of American Studies, ed. Simon J. Bronner (Baltimore: Johns Hopkins University Press, 2018), s.v. "Department Store" (by William H. Young), http://eas-ref.press.jhu.edu/view?aid=149 (accessed August 23, 2018).
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