How Department Stores Reshaped Shopping Habits and Supply Chains
🌀 Valentine Şişman
Building Communities | Talking about Tech, Innovation And Self-therapy
Imagine you need to buy a new shirt, some socks, and a frying pan. Today, you'd go to one big store (or online shop) and get it all. But 170 years ago, you'd have to visit three different shops!
In the 1850s, shopping was hard work. You had to walk from store to store. Each shop only sold one type of thing. It took a long time and you didn't have many choices.
Then, something big happened. The first department stores opened!
Did you know? The first department stores had more than 50,000 items for sale. That's as many as 50 small shops combined!
Department stores made #shopping easier and more fun. They also changed how stuff gets made and moved around the world.
Creation of Shopping as a Leisure Activity
The transformation of shopping from simply buying and getting goods to entertainment and some kind of social activity was perhaps the most profound change effected by department stores. Department stores became places to see and be seen.
Many also included eating places, such as restaurants, tea rooms, and, later, food halls, turning a shopping trip into a day out, as well as entertainment venues, and other facilities, such as art galleries and reading rooms.
For women, who were often unwelcome in other public places and could hardly travel much beyond their own homes without proper male supervision, department stores were legitimate places to get out and meet people.
The shopping experience also became much more sensual. The visual spectacle of luxury merchandise displays was enhanced by the newest technology in lighting. Some shops used also the scent marketing and were perfuming their air in order to create a nice atmosphere.
The deparment stores were also key in the democratization of luxury. For the first time, various classes of society had unlimited freedom of examining the goods not for buying, which made fashionable goods available to much greater portion of people.
In essence, department stores were not simply retailers of products: they were retailers of experiences, dreams, and social climates. They created a new culture of consumption that went beyond necessity, tapping into desires and aspirations.
Role in City Center Development and Later Suburban Expansion
Department stores played a crucial role in the development and revitalization of city centers. They acted as anchor tenants, drawing foot traffic and spurring the growth of surrounding businesses. The areas around major department stores often developed into prime retail districts, with smaller shops and services clustering nearby to benefit from the increased customer flow.
As cities grew, department stores often led the way in expanding retail districts. In many cases, the location of a new department store could shift the center of gravity for a city's commercial activities, influencing real estate values and urban development patterns.
Later, as population growth shifted towards the suburbs in the mid-20th century, department stores followed. They became key tenants in the new shopping malls that began to dot the suburban landscape. These suburban department stores, while often less architecturally distinctive than their downtown counterparts, continued to serve as anchors for retail development, shaping the growth patterns of suburban communities.
The process of development of department stores played an important role in the growth and revitalization of city centers.
As the most famous department store of the time would be located in the center of the city, its appearance would attract more people, leading to increasing the number of customers willing to purchase the products offered in the shops located in the area.
Many major department stores were surrounded by hundreds of other shops and businesses. This added to the value of the district, as these small stores formed the #retail district of the greater department store.
Noticeably, as the new shop would appear, developing into a department store, the whole city would start moving closer to that store. It means that the real estate around the store would gain the value, the prices would increase, and more shops would be built.
The development of such stores attracted dozens of people to move to that area, and their massive #cargo trucks supported the construction industry with cargo lifts and trailers.
Influence on Transportation and Urban Planning
The location and scale of department stores had a profound effect on transportation systems and urban planning:
The influence of department stores tended to condition urban patterns of growth, influencing where we lived, where we worked, and where we spent our leisure time.
Recommended by LinkedIn
Innovations in Inventory and Supply Chain Management
Department stores didn't just revolutionize the customer-facing aspects of retail; they also drove significant innovations in backend operations, particularly in inventory and supply chain management.
From Manual to First Digital Inventory Systems
Early on, department stores tracked the products they had in stock mostly through written ledgers and physically counting them, as needed. It was an extremely time-consuming process that was prone to mistakes in the recording, mathematical, and stock counting departments.
As time progressed and stores became larger and products became more diverse, this manual system became considerably inefficient.
Better alternatives started being introduced towards the end of the 19th century as cash registers began to be utilized in these stores. They had the advantage of ringing up sales, and tracking sales, which allowed the owners of the stores to categorize their products by their items, strikes, and department numbers.
Then, in the mid-20th century, more automatic punch-card systems allowed these stores to track their stock on a more systematic level avoiding stock-outs.
Finally, the actual hardware and software computerized inventory systems were introduced in the 1970s and 1980s. Of course, department stores were one of the first to employ this new technology.
The new system allowed them to track the number of products in their hands continuously, sales tendencies, and the points when particular products. It increased the efficiency of this process by orders of magnitude, which resulted in fewer stock struggles, clearer visions on products that needed to be promoted for sales.
Today, advanced inventory management systems incorporate artificial intelligence and machine learning, allowing for predictive analytics that can anticipate trends and optimize stock levels across vast networks of stores and warehouses.
Centralized Warehousing and Distribution Centers
As department stores expanded, often into chains with multiple locations, they pioneered the use of centralized warehousing and distribution systems. This model allowed them to buy in bulk, reducing costs, and to manage inventory more efficiently across their network of stores.
Centralized distribution centers served as hubs, receiving goods from suppliers and redistributing them to individual stores based on demand. This system reduced the need for each store to maintain large backroom inventories, freeing up valuable retail space.
The development of these distribution networks also drove innovations in transportation and logistics.
Department stores were early adopters of technologies like barcode scanning and automated sorting systems, which improved the speed and accuracy of order fulfillment.
Just-in-Time Inventory and Global Sourcing Strategies
Department stores were at the forefront of adopting just-in-time (JIT) inventory strategies. This approach, which aims to reduce inventory holding costs by receiving goods only as they are needed, required sophisticated forecasting and close coordination with suppliers.
The implementation of JIT systems was closely tied to advancements in information technology. Electronic Data Interchange (EDI) systems allowed department stores to communicate inventory needs to suppliers in real-time, reducing lead times and improving responsiveness to market demands.
Global sourcing became increasingly important for department stores in the late 20th century. The ability to source products from around the world allowed stores to offer a wider variety of goods at competitive prices. This global approach required innovations in international #logistics, customs management, and quality control.
Department stores also played a role in developing private label products, often manufactured to their specifications by third-party suppliers. This vertical integration of product development and #retail required new approaches to supply chain management, blending the roles of retailer and manufacturer.
The push for more efficient and responsive supply chains led department stores to invest in technologies like RFID (Radio-Frequency Identification) tagging. These systems allow for even more precise tracking of inventory from manufacturer to sales floor, further optimizing the supply chain.
In recent years, the rise of e-commerce has prompted department stores to adapt their supply chain strategies once again.
Many have developed omnichannel approaches, integrating their brick-and-mortar and online operations. This has led to innovations like ship-from-store fulfillment, where local stores act as mini-distribution centers for online orders.
In essence, the behind-the-scenes innovations of department stores have been just as revolutionary as their customer-facing changes.
By continually pushing the boundaries of what's possible in inventory and supply chain management, department stores have played a crucial role in shaping the global commerce landscape we know today.