How Department Stores Are Carried On.
by W. B. Phillips.
INTRODUCTION.
No other branch of business can bear comparison with the wonderful results achieved by Department Stores, such a success as has made them the wonder of modern merchandising. These stores, that have grown to greatness from small beginnings, have a force and power behind them that commands general interest. Their store-keeping rests upon certain well-defined principles, and not upon chance, sensations or experiments.
It is not the intention in this volume to prejudice public opinion against Department Stores. No attempt has been made to enumerate any reasons why they exist and flourish, nor any effort made to prove that they are a necessity, or otherwise.
Whether they promote and build up the best interests of the people and country at large, or are detrimental to them, is a question on which intelligent opinion is largely divided.
The fact remains--a plain indisputable fact--that they do exist; that they have had a tremendous growth in recent years, both in Europe and America; that organizations of this character beginning a few years ago have developed into the largest and most successful mercantile institutions in the world.
The author, from several years' practical experience, having been closely identified with the policy adopted, and with all the detail of system employed, in running one of the largest Department Stores on this continent, having visited at different times the trade centers of America, and examined carefully into the systems employed in other stores of a similar character, and made careful comparisons, is satisfied that the enquiring public will appreciate the endeavor to give them an intelligent idea of "How Department Stores are carried on."
General Principles.
One of the great underlying principles of Modern Department Stores is cash. Buying and selling for cash. Cash and one price. Some deviations are made from this rule, according to existing conditions in different business centers; but this is exceptional, the larger percentage of trade being strictly cash, and this fact has contributed largely to the general success.
A few years ago nobody sold for cash. Nobody in those days marked the price on goods in plain figures and stuck to it. To-day this is done, and is acknowledged to be highly satisfactory.
The first aim is to get the best and choicest goods direct from the makers; and, second, to have the lowest prices, thus enlarging the purchasing power of every dollar. A Department Store is different from the ordinary store, by being big enough to deal in almost everything that people need; handling merchandise of every class that goes well together for all sorts of people; providing the means of doing everything quickly, easily, cheaply.
A store large enough to accommodate thousands of shoppers arranged to serve a purpose. Floor upon floor filled with merchandise, broad aisles, easy stairways, elevators to do the stair climbing, cash system for quick and easy change-making, with all the newest ideas in store mechanism; places to sit, wait, meet, lunch, talk and rest; in short, an ideal place to shop in. Everything done that can be done to study the convenience of customers and look after their interests. This constitutes one of the greatest factors in the success of modern retailing.
Looking after the customer. Looking after them in such a manner that the service is an attraction in itself, that shopping is made easy and comfortable. Service is what these stores are for. Complete service in every detail, beginning with the purchase of the goods, and ending with delivery to customers, guaranteeing every article sold to be exactly as represented, or cheerfully refunding the money.
The development of these great businesses is largely the product of better service, and this service has been effective in winning the favor of shoppers.
The strength of these organizations, while centered in well-known principles strictly adhered to, is backed up by a well-defined system of government, including all departments, and the development of this system has had a great deal to do with the success of present-day business. The principles referred to build up and support the business, but it is the careful management and perfect system which controls.
The Management.
The central point around which the whole organization of Department Stores gather is the man, or men, who put up the capital; who own, control and manage the business; and who insist that the profits shall be consistent with their expectations. They not only put up the cash, but define the policy of the business, and organize and develop the system under which it operates. The organizing and executive ability, as well as the faculty of knowing men, must be largely displayed; knowing men, and how to combine them; knowing how to use their capabilities and energies, how to bring out all their qualifications and all their ambitions.
The management must be of large perspective and broad experience, make a close study of store-keeping ways and methods, be quick to take advantage of every new idea in service and appointments, and enterprising in everything that goes to make a business strong and successful. Associated with the head of the business, usually selected from active workers who live with the business every day, are a few who are taken into intimate relations with the business policy, and who very materially assist in its development, and in the working out and building up of the system by which the business is carried on. Capable, intelligent, energetic, lieutenants, who are intensely interested, and who exhibit no lack of earnestness or energy; who are imbued with implicit faith and confidence in whatever may be advocated and decided upon, and who direct their best efforts to its accomplishment.
The System.
The system that dresses the windows with attractive goods, that provides the special bargains, that furnishes such a variety of goods comprising nearly everything that people wear or use, that gives a courteous and agreeable service under all conditions, that provides a place to rest when fatigued, that enables shopping to be done under such favorable circumstances, that delivers all purchases promptly, and if a mistake has been made in the selection, or for any reason goods bought are not satisfactory, presents no difficulty in their being exchanged or the money refunded; the system which does all this and more is not the result of accident or chance, but there is a vast machinery behind it all which directs and controls.
But the system must do much more than this. It must provide for getting at results, and it is in this respect that the perfection of the system is reached. While the store space is divided up into little stores or departments, under different heads, who are given every possible leeway in the buying of goods and management of stocks, yet each head is made directly responsible for everything in connection with this part of the business. Each department is charged with the goods bought and with the expense of selling, and credited with the sales made. Each section pays its proper share of all general expenses, such as delivering goods, lighting, heating, elevator service, fixtures, rent, etc. The system employed enables the head of the business to always know the true condition of each section. It enables him to know, if desired, what each individual salesperson does; how much the total business is of any department on any day; what the expenses are for any given time; and these facts are not obtained spasmodically, but are regularly recorded and made use of. Lack of knowledge of the condition of any department does not exist. Success, or the lack of it, is apparent at once. The truth of Eternal Vigilance being the Price of Success is here acknowledged, and in no other business organization is more special care and attention paid to knowing constantly just what the actual results are.
Advertising.
Someone has said, "The time to advertise is all the time," and among modern business organizations none more thoroughly recognize and strictly adhere to this statement than Department Stores. Nowhere else is the science, the art, of advertising more intelligently understood, appreciated and applied. Advertising is recognized as the pulse of the business, the great vitalizing force. The importance of the relation of advertising to business cannot possibly be exaggerated, and for this reason it is considered most seriously. A recognized authority has said, "Advertising taken seriously in the retail business makes the policy of the business. It is the fundamental thing, the corner stone. Therefore, it demands the attention of the head of the business. I cannot think of any concern so large in its affairs, so extended in its ramifications, with so many responsibilities resting upon the head of the business, as to make the advertising subservient to the general management of the business, to make the head of the business ignore the advertising. The manager of a department, and the salespeople who are to sell the goods, should be told the policy of the head of the business so far as advertising is concerned, and the way the matter is to be presented to the public, so as to arouse the interest of all. It is important that the man at the head should vitalize the business by making everybody feel and know that the advertising, the address to the public, is made in conformity with his wishes, under his supervision, and is absolutely part of his plans for disposing of his merchandise. This being so, the proposition that the advertising of a well-ordered establishment makes the policy of the business is really correct."
Many methods are made use of to present and keep the business before the public, but preeminently the best and most satisfactory is the newspaper. Its columns are recognized as the very best medium for business notices, going as it does into the homes of the people regularly, filled with the world's news, with information for everybody, about everything from everywhere. The newspaper column is the merchant's platform, his pulpit from which he speaks to the public. It gives his words thousands of tongues. It is in this way he reaches his audience and tells them about his goods and business. He must talk straight, and his address must be interesting and readable, and, above everything else, true. It must always have the true ring of honesty, and advertisements are becoming more truthful every day, as business men realize that it must be true or it will fail. People judge and form their estimate of a business by the honesty with which their advertisements are lived up to, soon find the truth-telling places, and trade gravitates that way with absolute certainty. Lying advertisements never built a permanent and successful business. Advertising of to-day is honest, or meant to be, and, every day, people are gaining more confidence in it, and are understanding more and more that it is a necessary and legitimate part of this business; in other words, a "Store Bulletin," to which they can refer as an honest statement of what the store has to offer them.
Advertising properly means attractive news, news of daily importance, news which is appreciated and taken advantage of by the most wide-awake, economical and thrifty. News that must not get old by repetition. There is nothing more important about the business than advertising. Of what use to have tons of merchandise to sell if the people are not told about it, told about it regularly? Keeping everlastingly at it. Hammering away day after day. Continuous effort in the right direction, systematic, persistent. The advertising must be clear, logical and convincing; containing exact and definite information, telling the store news plainly and honestly, telling the people what the store can do for them, telling it often and in the right way. Some departments may be systematized so fine that they don't require such undivided attention; but the advertising can't run along like this, but must have constant and careful thought. Every advertisement must have careful consideration. Carelessness or neglect will lead to serious results.
Spasmodic advertising won't do. One might as well expect to close the store one day and open it the next. It must be regular, just as regular as the day comes.
Attractive advertising becomes a department of the paper, and people expect it--look for it with the same interest as other features. It is keeping the business prominently before the people and asking persistently for their trade that brings the business. Advertising is the greatest force, the most powerful lever, for facilitating business.
There is a generally-accepted theory that advertising pays, but Department Stores prove by facts that the theory is true. There has been considerable talk about the uncertainty of advertising; but thoroughly understood and skillfully used in the interest of Department Stores, it has become a most powerful factor in contributing to their general success.
Back of Department Store success, are earnestness, persistence, concentration, energy; but between these and achievement stands advertising. "As the business grows and is prosperous, it is due to the controlling factors of system, merchandise and advertising, but advertising is the dynamic force which vitalizes all the rest."
With this understanding of the important relation of advertising to business, a decision is arrived at as to the amount of advertising appropriation the business demands, not a fixed amount--no more or no less--but about the amount expected to be spent, which depends upon the amount of business necessary to be done, and is determined by the percentage of profits. A selection is made of the best daily papers, space secured, and "The Advertising Department" is ready for business.
This department is under the direct management of the Advertising Manager, or "Ad. Writer." He has a distinct recognition as one having a separate profession, and must, if the best results are obtained, be confidentially taken into the inner workings of the firm. He must be familiar with the history of the business, its progress and development.
While he may not require to know the exact amount of money made, yet he must know which departments are weak and which are strong. The strength of the best departments must be maintained and increased, and the weaker ones built up. He should know what the goods cost, where made, how bought, etc., and receive the hearty cooperation of the buyers, to obtain the necessary information to write up his appeal so as to secure a hearty response from the buying public. He must give an individuality to the store advertising, and see that every advertisement is backed up honestly, every promise fulfilled, and that the information he gives the public is absolutely true. He must keep on file a complete record of all advertising, and should keep in constant touch with each department's daily sales, with a view to continual comparison with previous records. He must know what other stores are advertising and see that his prices do not run higher than competing figures. All window dressing, wagon cards, display cards and interior decorations should come under his supervision. He must decide the amount of newspaper space for each department; and though heads of departments may take issue with his decisions, yet, as head of the advertising, he does what he thinks is best, usually giving space according to the money-making abilities of the departments. He must understand the goods he is advertising, know all about their uses and superior qualities, go in amongst the salespeople and customers, and talk with them, in order to write convincing money-bringing, trade-building advertisements. Copy should be submitted by departments at least two days before advertisement appears, in order that he may give it proper attention, prepare the cuts used in illustrating, have his copy to the papers early, proof carefully read, and any corrections made. He must study the character of his illustrations, the display part of the advertisement, and having secured a distinctive cut or style of the firm name must stick to it, as it adds an individuality to the advertising. The type used must also be selected, usually good, clear and legible, easily read, but characteristic, so that it distinguishes his Ads. from all others, and advertisements should always appear in the same position on the same page, so that the public know just where to find them. He must not only look after all the detail connected with the advertising, but must be able to analyze the conditions which confront him, grasp every possibility of the field, be wide awake to every change, sensitive to every trade throb, and have such a command of the English language as will express his ideas in a captivating and original manner. He is the artist who, having the ability and talent, either inherent or acquired, paints the picture that attracts; and who, when backed up by good merchandise, right prices, perfect system and careful management, becomes a great business force and an indispensable adjunct to present-day business.
The Buying Organization.
A large force of experienced buyers are constantly employed, who visit the world's markets at regular intervals in search of new goods. The aim is to save all intermediate profit, by buying direct from the makers, making direct connection between the manufacturer and consumer, and thus getting as near as possible to the actual cost of production.
Hundreds of thousands of dollars are represented in the several stocks purchased. Assortments must be complete at all times, and there must be a constant income of new goods. As fast as one thing sells, another must take its place, and no interest must be overlooked in the buying. Buying in great quantities, they are enabled to send buyers regularly to the great manufacturing centers and leading sources of supply. Prices are low in proportion as orders are large, and ready cash secures the best trade discounts. To collect such a wealth of goods and have styles and qualities just right, means a good deal. It means that the whole range of merchandise must be known. To get the best in the world for the money, and keep assortments complete the season through, calls for careful calculation. The varied human needs of civilization are to be satisfied, and each buyer in his own particular lines must be a man of large experience, of most excellent judgment, and high mercantile ability. They must know the merchandise they buy, that such a factory has the best reputation for one line, that this mill excels in another class, never buying anything simply because it is cheap, but picking out the best manufactures in each department, always maintaining a strict standard of reliability; and that the goods are well bought is demonstrated by the persistent growth of the business. They buy to unusual advantage by reason of ready money and the great outlet for all classes of merchandise. Several of the largest stores render valuable assistance to their buyers by establishing permanent foreign buying offices, thus enabling them to keep in close touch with the newest styles and novelties; and from these offices the shipment of a considerable amount of foreign goods is managed, the service being so facilitated and systematized that a prompt and rapid delivery of goods is effected.
But the buyers' duties do not end with the purchase of goods. He is also manager of the department which is made up of the various lines he buys, and is responsible for the proper management of the same. In his absence while buying, he must provide a capable assistant to represent him and the department, one whose services are esteemed as second only to his own, and who, if need be, in many instances is quite capable of acting as buyer and manager in his stead. He is given almost complete control of everything pertaining to his department, must sell the goods he buys, and his permanent position depends entirely upon the success with which his department is handled. As "head of a department," he is expected to comply with the rules of the house and set an example to all those under him. He should be first in the department in the morning and last to leave in the evening. He should be thoroughly acquainted with all rules pertaining to employees, and any new instructions which may be issued from time to time, and see that they are carried out. He is expected to use his best efforts to aid salespeople in making sales, instruct inexperienced help how to handle and display goods, how to wait on customers, make out checks, and, in fact, see that all duties are intelligently understood. It is not sufficient that new, inexperienced help be given a number and salesbook and told to go ahead, but thorough instructions must be given as to the methods of doing business. In order that enquiries of customers may be intelligently answered, he should know the location of all the stocks of the house. If travelers' samples are to be examined, it should be done in the sample room provided for that purpose, and in forenoons only. Only in special cases is it permissible to examine samples in the afternoon, as he is expected to be in his department during the busy hours of every day, to watch the trade and see that customers are properly waited upon.
Certain expenses are almost wholly within the control of heads of departments, and must be watched by them with the greatest care. This is especially true as applied to the amount of help employed. By using care and judgment, it is often possible to do with less help, and thus reduce the cost of selling. This is largely supplemented by watching the sales of each salesperson, and enquiring carefully into any cases where there is a falling below the average percentage of cost.
He should see that all advertised goods are properly displayed at the counters, and that all the people in that section are promptly notified of all particulars, such as quantities to be sold, price, etc.
He should see that all slow-moving goods are reported promptly, and goods must not be allowed to get old, but be moved out quickly. Any goods that do not move readily _must_ be got rid of--cleared out--whatever cash value they have must be secured, and at once, and no matter at what sacrifice; it being considered best to get what you can for them immediately, and replace the stock with something that will sell readily.
He should furnish a complete statement of stock to be purchased and hand the same to the office a reasonable time before going on a purchasing trip, and must have the sanction of the office to the same. Buyers are expected to respect the limits placed and not to exceed the figures sanctioned; but if the market is showing any special lots of goods which in his judgment should be bought, or he is confident that a saving will be effected on goods which are likely to rise in value by buying heavier, considerable latitude is permitted.