Monday, November 29, 2010

Department Store Building of the ... Book

One of the greatest (and most self-conscious) department stores ever, and still operating as a Macy's -- John Wanamaker Philadelphia, at 13th and Market Streets, in the center of this photo. I could tell you about it, but I'd rather you buy Michael J. Lisicky's second department-store book, "Wanamaker's -- Meet Me at the Eagle."

I had the pleasure of listening to Michael on Saturday at one of his Philadelphia appearances and he is as knowledgeable a person on department stores as you will find. His day job? He's a symphony musician. Part of the tale of his first book, on Hutzler Brothers Company in Baltimore, is how he got from point A to point B. Plus he is the designated "answer man" on Jan Whitaker's department store blog, which is linked to over at the left.

If you're interested in department store history, buy his books.

-- Just as an aside: It may be that Wikipedia founder Jimmy Wales is completely happy with WikiLeaks and its release of State Department memos. It may be that he's not. Just in terms of the name, though, it shows again what happens when you create a shiny new car and don't think of what happens when Mayhem jumps up and down above it yelling "Shaky, shaky." The fact that Ward Cunningham used a Hawaiian word for "fast" to create a software program allowing for easy universal updating of text is probably not going to mean much to John Q. Public, who could be perhaps not forgiven but possibly understood if he assumed that Wikipedia somehow was involved in a cabal to bring down world diplomacy and attack America's presumed interests. That doesn't make it more correct or more right than any other stereotyping. (Wonder what people would think today of the old Hollywood hotspot the Garden of Allah?) It is, though, why utopianism never succeeds, although it does have successes along the way while also causing damage. John Q. is not a utopian. John Q. is suspicious, not terribly well informed, and interested in self-preservation above all else.

I haven't forgiven Editor and Publisher for firing Mark Fitzgerald and his staff, but I will support its editorial in the December issue while acknowledging it shows the divide. When the Duncan McIntosh Co. bought E&P after its brief closure, it said it wanted a magazine devoted to the business side of newspapers as opposed to being another editorial review. Its editorial is consistent with that, attacking "self-absorbed 'experts' who most likely have never sold advertising in a depressed economy, negotiated contracts with labor unions, kept pace with evolving technology, or planned for fluctuating newsprint prices -- all the while meeting payroll..." But that is the journalistic dream of the Internet -- where journalism would exist without people worrying about selling advertising, negotiating contracts, etc. Where journalism would be a profession without the barnacles of the newspaper and magazine businesses. Where the individual journalism would never have to compromise because of press deadlines or length restrictions or presumed audience interest. Where we could have a world where nothing would ever be behind the curtain. Where the individual journalist would be as free as WikiLeaks to determine what was in the public good, and present it for the edification of the public.

Fine. But when that curtain comes down, watch out for John Q's reaction.

Monday, November 15, 2010

More About Strawbridge

As noted two posts ago, Philadelphia's Strawbridge & Clothier was one of America's most successful, innovative, and responsive department stores, and remained so under family ownership for more than 130 years. But eventually the cost of staying competitive in the field -- and in the discount field as well with its Clover division -- got too big, and the family sold out. (Beyond my expertise is how the cost of keeping up with vast national chains like Federated and May requires more capital than smaller companies could access based on their lesser cash flow.)

Like any mature business, Strawbridge faced challenges to its continuance every year. A couple are similar to the challenges newspapers have faced and are facing. Strawbridge's responses worked for a while, and while the company disappeared, many of its locations still are successful department stores under the Macy's name, so it's not that the business model of the store was bad, just the business model of the company.

As Alfred Lief notes in "Family Business," after World War II price competition increased, "resulting from improved production in many lines. Theoretically, lower levels were good for business because they were good for the public, ushering in better values; and from a financial standpoint it could mean lower capital requirements." This isn't quite the disruptive change of the Internet, but it touches on the same issue. Cheaper costs should be good for business because they allow you to lower your price and spend less on capital, so for a newspaper the need to not buy presses or paper should be good for it and its customers. "But too much of a good thing was always unhealthy." Get to a point where there's too much competition with too little capital investment needed, and established business founders. It can do nothing else. It can't make the past go away.

More important was that sales volume at the giant downtown store -- which had been expanded in the 1930s to handle its tremendous and growing business -- was now falling off. (Read: The massive pressrooms built during the height of classified and insert growth in the 1990s.) Disruptive change -- the postwar suburban push -- had made people less inclined to take a longer drive or train trip to go shopping. Yes, Strawbridge and Wanamakers might have better merchandise than was found at E.J. Korvette or Shoppers Fair -- but was it that much better to make the trip worthwhile, except for special occasions such as Christmas shopping or buying a party dress? Sort of like only buying a newspaper when your team wins the World Series. But while you can run a bridal shop on special occasions, you can't run a department store.

So Strawbridge went to the suburbs, opening stores throughout the Philadelphia area. This is somewhat the same as metro newspapers' response to suburbanization -- creating Neighbors sections. It was different in that Neighbors was more of a boutique than a branch. But the point was usually the same -- to try to follow one's customers' out to the suburbs and keep them from going to suburban rivals there.

Because department stores were department stores, those rivals were seen as -- other department stores. While department stores recognized that their customers increasingly were going to Kmart, they apparently thought it was only because a major department store wasn't close enough. Thus, when Strawbridge's was the motive force behind opening Cherry Hill Mall in 1962 as the prototype (Correction: Off by one -- see comments) for all of today's enclosed malls, the aim was to not re-create downtown Philadelphia with its (now down to) four department stores. As Lied writes, Strawbridge "proposed Bambergers of Newark as an acceptable neighbor... This development prompted Wanamakers and Gimbels to make a defensive move. They paired off the next year in a shopping center at Moorestown, New Jersey, about five miles east."

In the short run, this was fine, and Cherry Hill -- which eventually grew to include a Penney's as well -- was one of the marvels of the age and remains one of the East Coast's most important shopping destinations, with a Crate & Barrel, a Nordstrom, and a Container Store joining Macy's and Penney's. While it and similar stores in Springfield, King of Prussia, and elsewhere kept Strawbridge's going, they didn't address the discounter problem. This Strawbridge did, of course, with the Clover division, just as the Dayton Co. of Minneapolis did with Target. Eventually, of course, Dayton Hudson sold off its department stores and just kept Target. Would Strawbridge's have eventually just become Clover? Probably not, because it didn't have the resources to compete with national companies in either venue.

Strawbridge's recognized what was happening, as noted by these sentences bringing to mind the multiplatform moves (internal and external) of newspapers: "The future business of Strawbridge & Clothier would be carried on and directed in mutiple locations. In order to be able to run a multi-store operation, the organization would have to be restructured." In the short run, Strawbridge's did well. In the long run, though, its days were numbered.

What did Strawbridge's in was that it was competing with national chains (May Co., Federated, and Macy's at the end in department stores, Walmart and Target in discounters) that could outdo it when size and breadth were the issue, and competing with an incredible multiplicity of small stores that could outdo it in the personal service it once offered but could no longer afford because it was having to cut costs to compete with the national chains.

But could it have transformed itself into a surviving boutique organization? Doubtful. The "Strawbridge" name stood for a classy department store, just as the same of, say, the Omaha World-Herald stands for a newspaper. To make it stand for a small jewelry boutique -- doubtful. Loyalists would be miffed, and jewelry buyers would not care. They might still totally go to Jared.

So the problem for newspapers may be that in the end, there's not much you can do if your world falls apart. That's less hopeful than I usually try to be, but it wasn't bad management or resisting the customers that put an end to Strawbridge & Clothier. Strawbridge just didn't fit into the world anymore. That doesn't mean that there still aren't department stores, just as changes in communication don't mean that there won't be newspapers. But perhaps they will be print editions of the New York Times and Wall Street Journal for those who are willing to pay for them -- produced in ways that spread the overhead around nationally -- and a bunch of weeklies or local replacements as news boutiques, with the Internet as Walmart. The thing is that in the end, that doesn't matter that much for the consumer, who may even be happier with the arrangement. Whom it matters for, other than the people who lose their jobs, is those who remember how great it was to shop at a store like Strawbridge & Clothier, and feel a loss in their lives.

Friday, November 12, 2010


Great song by Coldplay, of course. But to the point -- some brief notes before getting back to Strawbridge's:

Best Buy plans to cut back its newspaper spend. If that money was going to online, it'd be one thing. But Best Buy, the ultimate mass retailer, is going to use it on something it considers more effective and mass. Our old friend television. Yes, this is replaying the late 1980s. Either Best Buy is total idiots, or they're saying something about the utility of the Long Tail Internet for true mass marketers.

Their problem? Metro newspapers no longer deliver their mass audience. (The Macons and Rockfords of the world still do in their markets.) Best Buy has been among the newspaper business' best customers and also among those who have said to newspapers, look, get it together. "We're seeing a shift back to traditional media. And TV still has a gigantic reach," said the head of the Retail Advertising and Marketing Association, who doubtless wants there to be a shift back to traditional media but says that the ROI on digital -- and remember how cheap digital ads are -- isn't showing up. That switch won't include newspapers as long as they appear to be a medium only read by people 75 and older, which will happen as long as newspapers say "We don't believe anyone under 75 will ever read our newspapers." If I were 25, I wouldn't want to read an old-folks medium even if I thought I might want to.

Only the newspaper business would find itself owning the Associated Press, as it does, and being told that the AP was losing money on serving newspapers and was going to remedy that eventually. Again, that's not on serving "print" newspapers. That's serving newspaper clients and their online sites. First-rate news, third-rate businesses.

And to get back to big-box stores, news from retailing on the front page of the New York Times: Not quite so big box stores, the Old Navy size, are downsizing and finding, perhaps to their surprise, that more people, not fewer, are coming into smaller stores. Now, this story has some weaknesses in the classic Times manner -- the lead promises more than is delivered, although by the end all the "we can't actually say this"es have all been said. The stores may be paying rent on the space they're not using, but that doesn't mean costs don't go down -- you're not having to have enough clerks to watch a larger room for theft and set up the displays, or straighten the merchandise, or put up signage. But it's in keeping with a problem department stores (and newspapers) have had for years: People have to be trained in how to use them efficiently.

A newspaper is a wonderful agglomeration of content even in the Internet age -- but you have to know how to use it (this is here, this is presented this way...) and be willing to spend the time using it exclusively. In department store terms, there's a wonderful selection of kitchen appliances when you want an iron, but you have to be willing to walk past perfumes and jewelry, take the escalator, turn around, and go past luggage. Then you have to find your way out, which is often harder.

In the Google era, your experience -- it's not the reality, there's a lot more starting and stopping and blind alleys than you realize, but you can always be doing something else at the same time -- seems to go from: I want appliances. Search for appliances. Find appliances. Having done so, walking into even an appliance store to look for an iron seems interminably long. I don't want no steenking gadgets. What I really want is: An iron store! I drive up to Iron World, walk in, and there are irons. No confusion. No need to ask the clerk, "Where are the irons," and have the clerk look at me with contempt as she says, "Behind you." I feel like I have not wasted my time, even if I spent 10 minutes more in Iron World than I would have in Appliance City.

As a person with Bloomingdale's notes, these are "stores that have been stripped of the distractions and temptations of unwanted merchandise." That sounds like the New Frugality, and it's certainly the New Inventory, but it also speaks of a change in shopper mentality -- if everything in the world is available online, why do I want to go to a store that has some of everything in the world when I am only there for a specific niche -- as with H&M and Zara, not even a specific product, but a specific gestalt? If I want everything in the world, I'll go online. But most of the time, I don't really want everything in the world. In that case, bricks and mortar works just fine. (Note to Long Tail enthusiasts: Yes, categories such as books suffer more than Iron World, because the number of irons is somewhat limited, whereas the number of books appears to be infinite. The number of blouses is infinite, but the number of blouses with H&M cred is not.)

As noted here before, it's not that the department store and newspaper failed to have enough content. They tried their darndest. It's that the amount of content available in the world rapidly exploded far beyond their ability to have a representative sample of Everything for Everyone. So you've got to figure out what your niche is -- who your customers are and can be, as opposed to who your customers used to be or who you wish they still were -- and then serve them to your profit, with your pipeline, and not worry so much about people who are never going to be your customers. And your pipeline can be Anything You Want It to Be.

And as Best Buy shows, your customers may not be living all their lives online at all. Newspapers, though, are still thinking that somehow they can create, online now, some product or combination of products that will still Grab Everyone in the Market. As Best Buy also shows, newspapers' problem is that that product was introduced after World War II and is ultimately responsible for their current fate far more than broadband access.

I'd just ask Best Buy, what can we do that works for you, and not worry so much if we can get the same product to work for Joe's Vinyl Record World that wants to reach 3,000 Long Tail vinyl fanatics. Let him be a customer of and never have anything to do with a newspaper. But that's not how newspapers think traditionally -- there's local money on the table! We must try to grab it all, because in the past we could! We will find The One Answer! (Alas, he's in Istanbul now.) If One Answer had worked, newspapers would not have started to decline once they were down to one title per market. (Wonder what would have happened to TV from the 1960s to 1980s if it had been reduced to one station per city, as advertisers might have seen as a efficient buy back then? Bless those government licenses. It goes in line with the theory that American religiosity stems not from the Puritan tradition but from the history of competition among churches, which was nonexistent in most nations.)

None of this looks good for newspapers whether they have printing presses or not. What's a printie to do? Talk about copy editing's obscure points, as at my entry here on the American Copy Editors Society's board notes.

Monday, November 8, 2010

Department Store Building of the ...

History gives us enough lessons of how you can do most things right and still disappear. Here in Philadelphia, we had such a department store, and it's not the one people who just know stores by reputation might think of.

Strawbridge & Clothier did not have the national panache of John Wanamaker for a number of reasons: 1) Wanamaker helped create the modern department store in terms of size and advertising, while also serving as postmaster; 2) the S&C main store didn't have the Eagle and the pipe organ and wasn't dedicated by a sitting president of the United States; 3) the Strawbridge main store was located at Eighth and Market Streets, where two of the city's mass-market department stores, Gimbels and Lits, also were; 4) Strawbridge throughout its life was a Quaker-run company, not prone to the Grand Gesture.

But as the history of Strawbridge (as recounted in "Family Business" by Alfred Lief, one of the essential histories of department stores) from the 1920s onward is one of constantly seeing the horizon and trying to reach it. Early moves such as the Clover Days sales and establishing a book department by buying the retail store of publisher J.B. Lippincott were just part of it.
Before the Depression, department stores may have operated in more than one downtown (such as Pomeroy's in Pennsylvania), but branch stores, outside of operations in resort hotels, were basically confined to some of the New York stores, Marshall Field's in Chicago, and Bullock's in Los Angeles. Strawbridge decided to join this group in 1929 by opening a store at Suburban Square, one of the first suburban shopping developments, on the Main Line. It followed up immediately with a store just north of Jenkintown, which -- like Bullock's Wilshire -- recognized that future customers would largely be arriving by car and provided, for the time, adequate parking.

After World War II, Strawbridge saw the downtown store's sales volume declining as 15 years of depression and war shifted into the suburban boom of modern houses for new families. It reacted aggressively, locating branches wherever it saw a combination of an established middle-class hub and new development nearby. After opening freestanding branches, it moved into South Jersey with the first truly "enclosed mall" shopping center, the prototype for a genre that has taken over the world. It saw the growth of discounters and established the Clover division. Recognizing the drain its massive downtown store was becoming, it worked with city officials to try to revitalize Market Street and made sure the store was attached to the new downtown mall. It continually tried to find the line between being a fashion store and a store for everyone.

And yet, after the company fought off a hostile takeover bid in 1986 and incurred a loss in 1995 after a failed bid to buy Wanamakers, the Strawbridge and Clothier families -- which still ran the business after 145 years -- decided it was in the best interest of the shareholders to get out, selling to May Company. The business was no longer profitable, and it was time to fold before the value of the goodwill started to evaporate. May Company kept the name Strawbridge's until the Great Macyization.

A second post will look at, as before, the parallels between the department store and newspaper businesses. Let one quote suffice for now. In 1941 business had been bad for years and the family was split about what to do. J. Clayton Strawbridge opposed the recapitalization plan presented by president Herbert Tily. In response, Frederick Strawbridge, son of cofounder Justus Strawbridge, said to Clayton, as Lief quotes:

"It is a very healthy thing to bring this out in the open, but rather presumptive for thee to tell older men about the goodwill of the business."

Thus sayeth the aged Quaker, his hand still on the tiller in a business that was ahead of nearly all of its rivals locally and nationally in recognizing changes in consumer behavior, but saying, await thy turn, what knowest thou? More to come soon.
In the picture above, the main Strawbridge store is both the large building and the smaller one to its left. Strawbridge downtown, which was completely rebuilt in the 1930s, may have been the last downtown department store built in the old style (with windows); or that might have been Loveman's in Birmingham or some store I've never seen, but those that followed or were contemporaneous, such as Cain-Sloan in Nashville or Herpolsheimer's in Grand Rapids, were clearly from the modern playbook. The little building to the left was part of the old Strawbridge store and was briefly the entire main store while the old building at Eighth and Market was torn down and replaced with what's seen above.

Thursday, November 4, 2010

Gee, It's Been a Long Time

Last post was in late September. Gosh.

Been learning how to use Twitter. Not really succeeding.

Off researching department stores in Baltimore. Going to the ACES board meeting. Being ACES secretary, which takes more work than being just an ACES board member.

Then there was the little matter of the ownership handover at my paper. I survived. Not everyone did, alas, but the bloodletting was minimal, for which I am thankful. I was going to quote from an issue of Editor and Publisher, but then they fired Mark Fitzgerald and his staff so that seemed irrelevant. No link for you guys.

And, probably most important, my addiction to Google Street View. I'm so angry at them for the data collection snafu, because -- to be really preachy here -- seeing how and where people in other countries actually live, as opposed to the tourist-oriented districts everyone knows, has made me feel more that it is one world than anything in recent years.

But a month and a half? I've probably lost all my readers, and preachiness like the above will lose the rest. Well, we'll just keep on plugging.

Let's get grounded again with News & Tech's Chuck Moozakis:

"When it comes to contradictions in terms, the words 'logic' and 'online' rank right up there with the best of them. Too often, objective, critical reasoning is dulled by the lure of the online siren.... Online has its place, heaven knows.... But the Web is a dangerous place when it comes to sustainable business." He's talking about the Toronto Globe and Mail's decision, noted in this New York Times story, to put money into better paper and reproduction:

"For Globe (Sorry, I wrote "Glove" earlier -- ds) and Mail Publisher Philip Crawley... investing in online, while important, pales in comparison to pouring resources into the paper's most vital component: the print edition."

Part of the problem is not in our Stars, or Timeses, but in ourselves. Chuck quotes from another Times story, about the mess at Tribune Co.:

"But even in 2010, when a print product is viewed as a quaint artifact of a bygone age..."

By whom, exactly? Not saying that it isn't by many. But one of the largest groups saying that is -- people who get their living from the sale of advertising in print newspapers. Yes, it's us journalists.

Not by the 2 out of 3 who, according to this poll, prefer print over digital. The report on the study is flawed and it looks to indicate that "paper" media has a lot in this survey to do with "printing out things at the office." But still. And then there was another Harris poll, which while highlighting that most Americans think "traditional media as we know it will not exist in 10 years" -- which is vague enough to cover any possibility -- also noted that 76 percent of 18-34s said "There will always be a need for newspapers in print." Admittedly, maybe they won't buy them. When I was 20 I thought there would always be Al Martino records, even though I wouldn't touch them myself.

I have no idea what people write in any country except America about newspapers and their problems -- except for Roy Greenslade in England. It's accurate to point out the vast fall in circulation and profitability. But I do know that like Barack Obama, those of us who see a future in print often have problem getting the point across, perhaps for the same reason: We see a nuanced future involving many platforms, whereas saying "Print Is Dead" is definitive, easy to understand, and makes you feel good about seeing the truth and contemptuous of those who don't.

But I can't think out if the sort of throat-clearing lines such as David Carr's quoted above come from this or that.

This: One becomes a journalist in part to show that one's hip, knowledgeable, not some stick in the Sandusky or Sidney or St. Cloud mud; so if those who "see the future" say, "Print's a dinosaur just like an Oldsmobile," I gotta let people know that I'm hangin' with them and not with those old guys. (As a baby boomer who went through many years in the 1970s of being an arrogant young ass who thought anyone over 35 who didn't agree with me knew absolutely nothing, I'm amused by the postings of so many young techies who are clearly just another generation of arrogant young asses who think anyone over 35 who doesn't agree with them knows absolutely nothing. Example: The comments on this report on our new CEO's plans.)

That: One is genuflecting in the direction of the future but also saying, "But of course, in my heart, I wish it were another way." So, print is like a scenic Victorian ruin, and wistfully accepting its departure allows one to think oneself superior even while bowing before the more denigrated future.