Amazon rediscovering department stores?

Amazon’s online empire is vast but it is also expanding its brick and mortar operations with plans to open department stores:

Photo by Artem Beliaikin on Pexels.com

What solves all of these problems—the high return rates, the cost-prohibitive last-mile freight, the logistics nightmares, the buyer frustration, and the monumental volume of consumer waste it all sends to landfills—on some level? Stores. Going to a store. In America especially, this notion was obvious for more than a century. Department stores were actually such a good idea, something that people like so much and that works so well, that the Gilded Age barons who invented them used their stores to create middle-class identity from near whole cloth and keep it going for generations.

Amazon helped kill most of those stores, but that has only created a vacuum into which more Amazon products and services are ready to be inserted. If Silicon Valley has taught us anything in the past two decades, it’s that if you have a bottomless pit of money, you can remake an industry in your image. You can acquire customers so quickly that they might not realize they don’t totally love everything you’re doing, and you can embed yourself in their lives in ways that would be tangled and inconvenient to remove, largely by snuffing out competition. Which leaves the retail industry in a precarious position: Amazon, and maybe a handful of its largest competitors, will go about deciding how you get to buy the things you need, with very little meaningful pushback. They’ll set prices, they’ll set labor conditions, and they’ll decide which things are too inefficient for you to buy online. Apparently, those things will go into a store.

Amazon and the companies like it invent the solutions to the problems they created, and you pay for them to be implemented. At least in some cases, physical stores may ultimately win out. You can try on your new pants, sit on your new couch, and leave with the thing you wanted immediately, which, it should be noted, is considerably faster than two-day delivery. Yes, you have to go to the store, but doing so will likely obviate the need for you to go to the post office—the dreaded post office—next week. Work smarter, not harder. It’s what Amazon would do.

A physical location offers certain conveniences. But, do not discount the embodied experience of shopping compared to online shopping. In a building, you can:

  1. See and possibly touch the item you want to purchase. This may matter more for some consumer goods than others.
  2. Browse and bump into things – literally. You can end up following rabbit trails online but this is different than seeing something unexpected or just look around.
  3. Be around other shoppers and enjoy the atmosphere. I wrote about this at Christmas; part of the fun is being around people and activity.
  4. Physical spaces can project status and emotions in ways that online portals cannot. The size and layout of department stores can impress and invoke particular feelings. Would you rather think about a soulless and endless Amazon warehouse or a fashionable and high-tech store?

Of course, some of these things can go awry. The item might not be in stock, you do not find what you are looking for, you have negative experiences with other patrons, and the experience is off-putting rather than exciting. But, Amazon might be at the point where they can offer compelling experiences in both realms in ways that others could not.

Mr. Selfridge got his start in Chicago’s department stores

Henry Gordon Selfridge hit it big in London (and on PBS) but got his start in Chicago’s burgeoning department store scene:

“Within a short time after he entered the employ of the Field store he met the first Marshall Field and made a favorable impression by asking for a job as manager of his department,” the Tribune recalled upon Selfridge’s death in 1947. “He won the job and from then on his rise was rapid.”He proved to have a knack for advertising, then a rare business skill. He was the first to promote holiday sales with the reminder: “Only ___ shopping days until Christmas.” Some credit Selfridge with the department store’s celebrated motto: “The customer is always right.”

In 1890, he became a partner in Marshall Field’s and married Rose Buckingham, a member of a prominent Chicago family. One of Rose’s bridesmaids, Kate Buckingham, donated Buckingham Fountain in Grant Park. An entrepreneur in her own right, Rose bought property on Harper Avenue between 57th and 59th streets, where she built and sold 42 homes. She also was an accomplished horticulturist. The Tribune reported she had a collection of 2,000 orchids…

The girls got a shot at marrying into the nobility because their father transferred the family’s fortunes to England, almost on a whim. In 1904, Harry Selfridge sold his interest in Marshall Field’s for $1.5 million and bought another Chicago department store, a few blocks south on State Street…

Yes, there was a Selfridge’s in Chicago before there was one in London. But not for long. Having bought it in May, he sold it in June — and the new owners renamed it Carson Pirie Scott & Co. Selfridge then went for a visit to London, where he discovered two differences between doing business there and in Chicago.

Chicago contributed much to the development of department stores which helped transform American retailing. Perhaps London makes for a more attractive place to tell the department store story but Chicago would be a pretty interesting setting in itself with department stores around the turn of the century. Why continue the Dick Wolf Chicago Fire/Med/PD/Justice system when you could go back into an even quicker changing era. Additionally, it would be interesting to see someone tie together several strands of American stores: from general stores and department stores to the big box companies and ubiquitous chain pharmacies of today.