Monday, July 28, 2008

Department Store Segue: Boscov's

The New York Post says Boscov's is in trouble. I went to our local Boscov's yesterday; it's a chain that prides itself on being stuffed with merchandise, and there were obvious holes. So it looks like it's in trouble.

This could be disastrous for newspapers in Pennsylvania, New York and Delaware, where Boscov's is a major advertiser. And, of course, even more disastrous for the people who work for Boscov's. In normal times, if Boscov's was in trouble you would wait for The Bon-Ton to buy it, but that chain is hurting as well. But in normal times Boscov's would not be in trouble. Boscov's has never forgotten who its customers are and what they want; it never made a frantic rush upmarket to find no one waiting for it there and its usual customers walking away.

(Never heard of Boscov's? Most of the country hasn't. Until the mid-1960s it was a neighborhood department store in Reading. Most of these little stores simply shut down when the founder retired, but Al Boscov, the son, took Boscov's into the Reading suburbs, then into the small markets in Pennsylvania. Through heavy promotions and sales it became a large regional chain. In the mid-1980s it moved into Philadelphia's suburbs.

(A couple of years ago Al Boscov and his brother-in-law Ed Lakin sold the company to the next generation and Boscov's picked up some stores set adrift in the Great Macyization; thus, like anyone who took on debt in 2006 based on expected cash flow, they're now dying. As usual, newspapers and department stores are joined at the hip.)

News coverage mentions the usual suspects -- the continuing decline of the department store model, the difficulty in being a mid-market store (you aren't the cheapest and you aren't the most stylish). Boscov's has these issues, yet with its aggressive prices, discounts, sales and promotions, Boscov's has been known as a place for bargains. I'm sure it's hurting as people trade down to Wal-marts and even dollar stores, but this seems more a case of expansion at the wrong time.

Mark Potts did a recent post called "The End of Mass," reiterating a point many have made, that there is no longer any mass market. In many ways that is true, but it can be overstated. If it were the End of Mass, Wal-mart would be in huge trouble, as would Home Depot, and not just Boscov's. In fact, in terms of product line, department stores offered far more choice than many big-box retailers do.

In television, as the New York Times noted, the total cable audience has been overtaking the total broadcast audience even while the four major networks remain the largest operations in the field. As it noted, "despite the gains, only a handful of cable series and specials — 'High School Musical,' 'WWE Raw' — draw audiences comparable to those of broadcast." And that's with broadcast drawing far fewer people than 20 years ago. So we can assume from this that mass media are dead at the same time as we can assume that mass media still have a large, though smaller, audience.

But another line in that article makes me think of newspapers and department stores more than trying to define "mass" or talking about long tails:

"It is not a totally fair fight. More than broadcasters, cable networks rely extensively on repeats and a handful of signature shows that define their brand. If viewers miss a new episode of 'Zoey 101' on Nickelodeon, they know the episode will be replayed many times. ... 'Cable’s dependable. Broadcast isn’t,' said [Ted] Harbert, a former programming executive at ABC. 'If you like the kind of stuff that E! does, you can turn it on any night and it’s there.'"

That's what Wal-mart's been selling for years, down to its trucks just bearing the word "Always." That's paint at Home Depot; we only sell Behr and Glidden, but we'll always have what you want. You can't get more mass than that, and mass retail has been driving out less mass-oriented competitors for years. And since Wal-mart is really a department store that we call a discount store, it made me think about a major difference between department stores and other mass retailers.

Department stores originally had all their goods behind the counter, on shelves or in counters. As stores moved into ready-to-wear this became less workable -- although I have a vague memory of my mother being discomfited when I was about 6 by one of our three big stores' having boys' wear kept in locked bins. (This would have been about 1958.) I do remember that Block's toy department had most of its merchandise behind the counter. You had to ask a salesperson to show you anything you wanted. I liked Ayres' a lot better.

Because there was no computer to track sales and because each department was run like a fiefdom, you had to pay at that department. If you had men's clothing to buy, but the line was long and there was no one at women's wear, that didn't matter; the salespeople there would not take your money. (I guess this is because it needed to be written up in the men's department so that a proper accounting could be made and commissions could be paid, even though the money was sent by pneumatic tube to the central cash office until the 1960s.)

Clearly that did not trouble the original discount store owners, though they did not have computers to track sales. The checkout people took the money, and that was that. Though anyone at a department store can now handle any merchandise, I was well trained and, like many department store shoppers, won't walk across the store with underwear to check it out at the furniture department, because I'll look like I'm trying to walk out with the underwear and the guy in furniture will look offended that he has to ring it up. The checkout person at Target doesn't care what you have.

What's the difference? The shopping cart. The traditional department store model was: You saw something, paid for it, put it in your bag, went to another department, saw something else, paid for it, put it in your bag. ... But the discount store, or Best Buy, or Kohl's, etc., gives you a cart. You wander the store at will, you only stand in line once, and because your merchandise is in the cart you don't look like you're holding it close to your body trying to steal it. You don't have to look for a cash register with an open salesperson until you're ready to leave, so there's less anxiety. And you have somewhere to put the baby. At Boscov's, you're walking around holding some purchases in your hands (along with the baby) that you have to pay for so you can go to another department and start over, because if you have any more stuff you're going to drop the clothes or the baby. Wal-Mart and Kohl's are more convenient and more dependable, even though they offer less selection -- and are therefore more "mass" -- than Boscov's.

So to bring this back to newspapers: In newspapers you often have no idea what the content is going to be or where it is going to be placed. Maybe the sports agate is on the fourth sports page, maybe on the sixth. Comics are here, or they're there. Maybe there'll be a story about what I care about today, or maybe there won't. And we keep wanting the readers to start reading a story, turn forward to Page 12 to read the rest of the story, then go back to Page One, then go to Page Seven, then back to Page One, and then start reading the rest of the inside pages. Or else they follow the jump to 12 and then go on from there, missing all the content and ads on 2 through 11.

It may be a great product editorially, but it's not very good as a consumer product. Mass still works, but mass without convenience doesn't work in the 21st century. Wal-mart doesn't expect all of its shoppers to go to the toy department, but it does let them know where the toy department is and doesn't move it from day to day, or put part of it here and part of it there. Some of what newspapers face is inevitable with different ad volumes and color positions, but some of it is just a lack of self-discipline. Combine that with our hostility to criticism and you've got a business bound for trouble even without an economic downturn. All you need is a consumer-focused competitor and you're toast. And that will bring us to Zell's 50-50 club.

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