Wednesday, September 28, 2011

Still Joined at the Hip

As has been pointed out, the original purpose of this blog was to draw parallels between the department store and newspaper businesses – a purpose that has been largely forgotten. Permit me then to quote at length from a wonderful book, “The American Department Store Transformed, 1920-1960,” by Richard Longstreth:

“The financial challenges identified by department store executives during the 1920s persisted over the next thirty years. … The percentage of revenues consumed by operating expenses…. continued to plague profit margins. … Even more ominous was the fact that department store sales formed an increasingly smaller percentage of retail sales overall. … Even in the best of times it was all the industry could do to hold its own.

“Equally daunting was the challenge from competitors. … What was seen as a potential problem in the 1920s became a very real one in the 1930s as the low-cost items that chains purveyed appealed increasingly to a consumer public with shrinking disposable income. Even more threatening was the fact that chains were expanding the scope of goods they sold, treading ever closer to the department store’s traditional base. …

“The persistence of economic challenges to the big stores led to mounting debate over the future of the industry. Considerable discussion was percolating by the eve of the war over whether the basic way that business was conducted should change. At the core of the debate lay the department store’s identity. Criticism of the status quo abounded….”

A writer for Women’s Wear Daily blamed the situation on “antiquated ... methods… The process had to be ‘streamlined’ so that the ‘merchandise is instantly accessible.’ … Increasingly, the great emporia were being admonished for employing ... methods that would surely bring about their demise…

“Service was upheld as the hallmark of the department store’s reputation. By abandoning this mode the great emporia would, in the words of one prominent retailer, surely lose much of their ‘character and prestige,’ becoming just another ‘low-cost distributor.’ …

Harvard professor Malcolm McNair in the 1950s “admonished the trade for failing to grasp changes in consumer habits brought about by supermarkets and other chain stores. The distinction between the kinds of merchandise these outlets sold, he intimated, was irrelevant. The lessons transcended such particulars…

"A flurry of critiques ensued, all now strident in delineating the department store’s intransigence. The great emporium was equated with the brontosaurus. …

In 1952, WWD noted that “‘many adults grew up with the idea that their department store was the center of life of their community. Contrast that … with those who have grown up in the last 15 years or so. … The department store is not highlighting the excitement of visiting their establishment.’ ….

"Furthermore, Albert M. Greenfield, chairman of the City Stores, emphasized that many of those who shopped were comparatively young. Wartime routines and the self-service structure of the supermarket had conditioned them to independence. Merchants underestimated the intelligence of their public, he charged.”

Substitute “newspaper” for “department store” and “Internet” for “supermarket” or “chains” and indeed, there is nothing new under the sun. Longstreth devotes the next 200 pages of his book to discussing what department stores did, and anyone who grew up in or near a city before the big stores began to shut down will find not only enlightenment here, but nostalgia. A different era for newspapers, of course, but what to do? Hint: It begins with determining who your customers are and what they want – which necessitates saying that everyone is not going to be your customer no matter how many offerings you have, a problem that all once-titanic businesses (railroads, department stores, newspapers, Microsoft) face and have trouble facing. Yes, more to come.

As an aside, I was amazed to learn that H.P. Wasson & Co., one of the three department stores in Indianapolis in my youth, was the first “windowless” department store in America. Part of my love for Moderne design came from seeing the unique Wasson’s building in the midst of the blocks of traditional buildings downtown; another source was the lettering used when the entrances to the William H. Block Co. were redesigned in the same era. From early parking garages to suburban branches and downtown redevelopment, it’s all here.

Friday, September 9, 2011

Out With the Old...

Wow, what a depressing week in the newspaper business again. Layoffs here, layoffs there, as Charles Apple notes. One of my former colleagues was laid off in Dallas for the second time there. Yeah, we laid him off, too.

At times like this I have to turn to my favorite upbeat source of news about traditional newspaper operations, News & Tech. As Chuck Moozakis writes:

"I understand that the Web and mobile audiences are important. But in order for newspapers to serve those audiences ... print is the engine that must be carefully nurtured and maintained."

He quotes a consultant, Sam Wagner, as saying, "We seem to want to leave the broadsheet here to die; in the States nobody wants to take the chance to really shake up their product and really try to redo it, whether it's content, size, or shape. Circulation is declining, page counts are declining, but people are afraid to change. To do nothing seems to be on a path to death to me ... What do they have to lose?"

And as Jim Chisholm -- boy, I want to meet this guy someday, I may have to go to France to do it -- says,"Don't believe everything you see in our own medium. ... Only about 8 percent of the industry's revenues are from digital. In the United States, that percentage is a bit higher, around 12 percent, but still nowhere near enough to sustain the business."

Of course, to this, digital fans would say -- not enough to sustain the business you have, but abandon that business and it is. In the old days, if I remember this figure right, you budgeted newsroom expenses as around 11 percent of your costs (since most of your money goes to paper, ink, plates, trucks, and carriers). As John Paton, whose newly ascendant Journal Register Co. just apparently engineered a back-door coup of Dean Singleton's Media News Group, said this week, online revenue by the end of the year will cover the cost of newsrooms. Chisholm's figure indicates that is correct. The issue then is, at what point do you say you also covered the cost of ad salespeople, business-side employees, and (if you're doing a paywall or replica edition) whatever you call your circulation department and your increasingly important promotions and community events departments, at which point you say, shut off the presses and let all those pressmen, drivers, and contracts with ink companies go. While Paton is careful to say that print will be around "indefinitely," any copy editor can tell you that word has two meanings.

U.S. newspaper companies say they are committed to whatever platform the customers (ad and reader) prefer, but it's clear many of them want to help consumers give up print, whereas in the rest of the world that pressure is not so strong. If you see it as inevitable, that's a good thing. But one of the mottos of this blog has been to challenge the idea, "If current trends continue..." What do you want the current trend to be? Who do you want your customers to be? If your definition of "local news" is "we have a few reporters to do the big stuff but most local news is Mrs. Smith putting her announcement of the book club on our site free," then heck yes you want to tell your print readers they're stupid and get out. The future then is, have volunteers do most of the work for you, and reap the profits.

Admittedly, News and Tech's advertising base is people selling print products. And its columnist Marc Wilson, reporting on a Borrell Associates survey, noted that a "panel of industry experts" -- this column was about Yellow Pages, so I don't know what industry this is -- 21 percent said "fewer than 100 daily newspapers in North America will exist in print form" within three to five years, and 63 percent in total said that would happen in 20 years or longer. It's hard to know what to do with that -- does that mean "exist in print form every day" or "exist  in any print form at all," and also hard to know if that the people answering knew that means 1,300 out of the 1,400 or so daily newspapers in the United States and Canada, taking the typical American position that Mexico is not part of North America -- but even admit N&T's upbeat attitude, the views of the Minneapolis publisher editor that in more than five years, the Star Tribune might be a Sunday print product with daily digital news -- well, it makes you wonder if Moozakis is, probably like me, just a person who still loves printed newspapers even as the country says, go fish.

A final word on layoffs. We journalists and our amen corner -- academics, goo-goo advocates, and dyed-in-the-wool readers -- tend to believe that cuts in editorial staffing will inevitably lead to less readership and thus less advertising. But advertisers have always used tons of media that don't involve editorial staffing, and readers complain about reading wire stories they've already seen on TV or the Web -- i.e., big stories -- not about wire stories that didn't make the top of Google News; they complain about a paucity of local news, but don't really care if the local news was written by the local antiques dealer. There's probably a relationship there between news and advertising, but if it were as strong as we think, news departments wouldn't have to deal with continual staffing cuts. People generally just want to read something they haven't read before.

ADDED NOTE: Thanks to Vince Tuss for correcting the title of the Minneapolis executive quoted.

Wednesday, September 7, 2011

Department Store Building of ... Uniontown

My relative Larry Stratton has been getting acclimated to his new home in southwestern Pennsylvania, and has even been taking the local paper from Washington, Pa. We'll get to Washington in a bit, but first here's a surviving store building in Uniontown, which for a coal-mining capital had two very sophisticated stores.

Most people probably remember this store at 22 E. Main St. just as Metzler's, but it was linked to a large regional operation. The genesis of the chain was the Wright-Metzler Co., which started in Connellsville with two Wright brothers and Sankey Metzler.  Metzler was a West Virginian who took over the Uniontown operation. After his death in 1939, his son William took over, and then it went into the hands of daughter Martha and her husband, Daniel MacDonald.

As noted here before, the Metzler stores were interconnected with stores Warren and Latrobe, as well as, briefly, Washington, Pa., all of which eventually went in other directions. What I haven't been able to track down is if there was any connection between the Metzlers and the Kaufmans, who owned Uniontown's other big store, N. Kaufman's Inc. Nathan Kaufman, a merchant from Brownsville, Pa., bought what had been Rosenbaum Bros. in Uniontown in the wake of the Depression. Day-to-day operations went into the hands of Bailey Greenwald in the late 1950s, although Kaufman's son William was still the owner. The interesting question is: When I was in Uniontown a few years ago, a house on the same street that Bailey Greenwald had lived in was owned by one Sankey Greenwald. The chance of "Sankey" being coincidental would seem minuscule. So did the Greenwald and Metzler families intermarry? Nothing exists online to show such a connection; indeed, many of the references to Sankey Metzler in Uniontown are to this blog. But if anyone reading this in Uniontown knows whether its two department store families finally became one, let me know.

NOTE: IT'S ONLY WEEKS AWAY: The release of Michael Lisicky's newest department store history, this one profiling Gimbel Bros. Start storing away your money now to buy it!