Thursday, October 20, 2011

At the Core

Have been on the road a lot -- last week in New Orleans for a board meeting. As in most large cities, the buildings that housed their department stores are still there, though with alternate uses. (Other than basket cases like Detroit, department store buildings tend to be reused in large cities -- it's the medium-size ones in which they are torn down because no one can think of any economic use for a big downtown building. The Zara chain not only has taken over part of Woodward & Lothrop in Washington, it now occupies the former Rinascente store on the Corso in Rome.)

The buildings of both Maison Blanche Co. and D.H. Holmes Co. in New Orleans are now hotels. It's a shame that no one will be able to experience again the quirky Holmes store, which went through interconnected buildings fronting on four streets, but good that it isn't just a large hole in the ground.

One then sees the many Target and Wal-Mart stores as well as the Macy's and Dillard's and again asks, why did these stores that dominated their markets for generations die? The answers, of course, are clear and found many places, sometimes here. But one is that they built capacity to handle a period when they were the dominant games in town, and then had trouble backing out of it when a new type of competitor -- the one-stop, single-floor suburban discounter -- became the "default" option. Newspapers have had the same problem, now spending money to shutter printing and inserting plants that in some cases they built only a decade earlier.

Most department stores faced another problem -- they wanted their customers to be, to some degree, everyone and anyone, and to that end they sold not only nearly every class of merchandise (basement stores! women's floors! the Tribout Room!) but nearly everything that was for sale except cars. Recently I was in Prince George's County, Md., which has a couple of Macy's that before the Great Macyization were branches of the Hecht Co. It was a time warp to go into these stores, which Macy's has not spent very much on -- the Marlow Heights store was like walking back into Block's Glendale in Indianapolis in the early 1960s. (Lovers of Googie architecture take note, it has an outdoor stairway with a canopy straight out of the Space Age.)  At the Prince George's Plaza store, a derelict auto center reminds that not just Sears, but local department stores did tuneups and sold tires -- sometimes at freestanding locations not in a shopping plaza parking lot. And you could still see where the garden center was, back when upscale suburban department stores also sold plants, fertilizer and mowers.

Omnia omnibus ubique -- all things for all people everywhere, as Harrods' has it. That idea created the great stores so many of us remember -- and here's a plug for Michael Lisicky's new book on Gimbel Bros., just out. When enough of all people turned away from buying all things, the weight of the department stores began to collapse them. The existence of Macy's, Sears, Penney's, Dillard's, Kohl's shows that the department store is not dead, but the department store that contained everything for everyone is long gone, and the department store that stood as a Pillar of the Community is gone as well. If Harrods truly followed its motto just in terms of the London market, it would be as dead as Simpson's of Piccadilly or Whiteley's of Bayswater. Harrods is all things for a few people -- the rich and the tourists.

Wal-Mart found out the danger of trying to appeal to everyone when, near the end of the most recent era of prosperity, it tried to draw in a more upscale shopper and found it had alienated its core users. Newspapers' institution of online paywalls to me means that at last they are realizing that they cannot be all things to all people anymore in the online world, where anyone can be everyone. They have to decide who their customers (and potential customers) are, which means realizing that 1) a lot of people will never be your customers and you shouldn't care and 2) you actually don't want as customers a lot of the people who visit your website, except to gather some low-hanging-fruit revenue until you can figure out if you can do away with it. Digital dimes will never replace print dollars, but with a defined, committed, enthusiastic customer base you can at least sell ads for digital dimes, as opposed to the digital pennies available to anyone with an open website.

Early in this blog I argued that the essential advantage of print was that it created a pipeline to the reader -- a separate distribution system apart from general dissemination -- and that we needed to exploit that. Still think so, but the apparent years of economic malaise ahead keep pressing in. Paywalls create another pipeline, and the tide seems to be turning in their favor. I remember a conversation with my managing editor back in 2002 or 2003, at which time the Times and the Post were playing chicken over a paywall. When one of them does it, she said, we will do it too. Neither did it, and the newspaper business went into years of decline while talking pointlessly about the conversation. Then the Times did it, and even though the Post did not, the newspaper business rule is that if the Times does it, it must be right. Your traffic doesn't fall off that much, and what you end up giving up is ad inventory you couldn't sell anyway. You get to know your customers and satisfy their needs instead of trying to walk down the street with a sandwich board surrounded by thousands of other people walking down the street with sandwich board. And you even see some resurgence in the print business, particularly on Sunday, from people who didn't really object to a print newspaper or paying you, but didn't want to feel like suckers for paying for something others got free.

The hardest part of this is realizing that you will never again be what you were, no matter how successful you may be. That's hard for people who have been successful to give up, particularly when they hear from longtime customers who really don't want you to change. I was talking with a colleague who came to the paper in boon times and remembered arriving at this giant operation and saying, "Wow, I have really made it." It was a wonderful time, a wonderful feeling, and no one else is likely to have it ever again. We sure don't have that sugar high anymore. But it doesn't mean you can't be successful both as a business and journalistically.

And one has to be willing to realize that long-established customers are going to hate what's happening and let you know, even though they can do nothing to make your situation better. Having heard from them in my job for years now, I realize that they'd be happy if Hecht's came back with its garden and tire centers even though they might never go there. They liked 1970 and would like to have it back. I'd like it too, but that won't get me a ride on the subway. You may have to continue to alienate some of these customers, which is really hard. There is little more pathetic than a reader in her late 80s who tells you that by dropping "Ziggy" you have taken the last bit of joy out of her life. (I do not exaggerate.) But if you continue to spend money on "Prince Valiant," which seems to now be jumping the shark by apparently having Flash Gordon appearing in a crater, just because a few people have read it for 60 years and no one else reads it, then you're the Hecht's garden store manager looking across the street at Home Depot and saying, "But they'll come back. I know they will." They're not coming back to a department store garden center after Home Depot. But they will do business with you for what you can do better. And never forget -- what we can do better than anyone else includes print.


John Cowan said...

Unless everything bar the facade has been destroyed and reconstructed, I'd think a department store would make an extraordinarily bad hotel. Seen from above, department stores are big blocks; hotels are long snaky things so as to maximize their surface area. After all, who wants a hotel room with no window at all? Even facing another brick wall ten feet away is better than that.

Sure newspapers can make money as providers to the elite. The Wall Street Journal has been doing it for years. What happens then, though, is that you sacrifice all claim to special political significance. You are no longer, even in principle, the guardians of the republic, the watchdogs who expose public and private misdoing. You are just another special interest, no better than the automobile companies, hopefully no worse.

Davisull said...

The Ritz-Carlton in New Orleans -- which not only occupies Maison Blanche but part of the Kress 5-and-dime as well -- has a huge amount of area facing the street. Maison Blanche was built as a giant office building with a department store, and it would have had as much window frontage as any hotel of its time.

The Chateau Bourbon -- which occupies the Holmes store -- would be a different animal. Holmes was built sort of like a cross with frontage on four streets. But it was not a behemoth like Macy's or Hudson's -- stores in the South tended to not have as many floors as in the North or Midwest, except for Atlanta -- and it seemed that all the parts of the store had been rebuilt or adapted or built above except for the Canal frontage.

honchojock said...

You can be a forty-seven year old and still protest about your beloved Ziggy being pulled from a comic section or no longer sold as a calendar. Stuff changes. Having lived through the last days of the grand dame department stores as a teenager in the 1980's and seeing the Macyfication of what was left of Federated-May in 2006, this period has really been depressing.

When the fun is gone out of shopping for stuff, and life leaves you with a 5 item for $4 menu at Burger King, something terrible is happening. So many of us are floating at the bottom of the food chain, that not much is worth getting too excited about.