Economics and Business

Department Stores

When did department stores begin?

Department stores, which offer a wide variety of goods for sale in various departments, emerged in the mid-1800s. Many evolved out of general stores (which offered a variety of goods but not divided into departments), while others evolved out of dry-goods stores (which sold textiles and related merchandise). The first bona fide department store was established in Paris: the Bon Marché (French meaning “good bargain”) opened its doors in 1838. Between the 1850s and 1880s, numerous department stores opened in American cities—including Jordan Marsh, founded 1851 in Boston, Massachusetts; R. H. Macy’s, founded 1858 in New York City (the store was known for its creative advertisements); Wanamaker’s, founded 1861 in Philadelphia, Pennsylvania (it successfully implemented fixed pricing so that customers no longer haggled over price); and Marshall Field, founded 1881 in Chicago (within 25 years it became the world’s largest wholesale and retail dry goods store). These pioneer department stores, multistoried enterprises located in downtown areas, introduced many innovations to merchandising, including the policy of returnable or exchangeable goods, ready-made apparel, clearly marked prices, and window displays. By the early 1900s department stores could be found throughout the country. The timing was right for their emergence. Urban centers grew rapidly at the end of the century, giving department stores a ready clientele; the advent of the telephone, electric lighting, and billing machines helped retailers conduct business efficiently; transportation improvements allowed for the shipment of large quantities of goods; and a variety of finished goods were mass-produced, increasing supply and lowering cost of production as well as the price to the consumer. By the 1910s the stores were part of a new mass culture, which centered in American cities. During the twentieth century, department store sales typically ranged between 6 and 12 percent of total annual retail sales.


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