“Let's Go Shopping at the Square” Cleveland's

Title “LET’S GO SHOPPING AT THE SQUARE” CLEVELAND’S LEADING DOWNTOWN DEPARTMENT STORES A BUSINESS LEGACY BY RICHARD KLEIN, PH.D Let's Go Shopping at the Square Let's Go Shopping at the Square Richard Klein, Ph.D MSL Academic Endeavors Cleveland Copyright:2014 Let's Go Shopping at the Square by Richard Klein, Ph.D is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted. Let's Go Shopping at the Square Acknowledgments This book is a tribute to the eight major downtown Cleveland department stores and their many loyal customers. For over 150 years, these large stores dominated the local retail scene. They represented exciting places that not only provided a full range of goods and services all under one roof, but also, offered a special shopping adventure every time their customers visited. I also wish to acknowledge the many men and women who dedicated their working lives to providing their customers with the best products and services year in and year out. A number of my colleagues and friends assisted me throughout this effort. Bill Beckenbach, an Urban Center Fellow at Cleveland State University, first approached me about writing this book. He believed that there was a need for such a study. Once I started writing, Bill provided worthwhile suggestions based on his own experiences as a born and bred Clevelander and local business leader. Mr. John S. Lupo, former President of Higbee’s, offered a wealth of information and insight regarding the local retail scene especially from the 1960s to the 1990s. Others assisting me in this endeavor included my longtime colleague and friend Mr. William C. Barrow, CSU Special Collections Librarian; Ms. Lynn Duchez Bycko, CSU Special Collections Assistant and Ms. Elaine Herron, Subject Department Librarian Cleveland Public Library-Public Administration. My wife Jo Ann, a dedicated shopper in her own right, also lent her expertise. Let's Go Shopping at the Square i Executive Summary The arrival of discount department stores, on-line shopping services, specialty shops and warehouse clubs over the last fifty years had a pronounced impact on retail activity. An entire new generation of shoppers has never experienced the excitement of downtown department stores. This is unfortunate. For over 150 years they ruled. They provided quality merchandise at affordable prices all in a service-oriented environment. Cleveland, Ohio epitomized the fast growing city of the 19th and 20th centuries where this kind of retailing prospered. This writing will focus on Cleveland’s eight major downtown department stores. Starting with the development of ready-made clothing, at the outset of the Industrial Revolution, it will trace the evolution of the department store as seen through these specific retailers. Using them as a barometer of local change affords a human aspect to what might otherwise be construed as impervious economic forces at work. This writing will also emphasize economic and social changes wrought by Baby Boomers and how they impacted traditional stores. Retail success never lasts forever. The ability of local stores to meet the challenges of their day insured their success then. Their inability later-on to fulfill the needs of a changing customer-base led to their demise. Learning from their successes and failures may assist modern retailers as they attempt to remain at the top of their game during our own highly mobile age. Let's Go Shopping at the Square ii Introduction Discount department stores, on-line shopping services, specialty shops and warehouse clubs dominate much of today’s retail scene. They fill the void created by the closing of many locally-based downtown department stores over the past fifty years. National department store chains such as Wal-Mart, Target, Macy’s, Kohl’s, Dillard’s, Saks 5th Avenue, J.C. Penny’s, Nordstrom’s, Sears & Roebuck and K-Mart have survived the on-slot of those closings. Although some such as Sears and K-Mart are finding it increasingly difficult to sustain their retail niche. Their lack of significant capital outlays over the past twenty years to modernize and upgrade their stores generally has impacted sales. However, economic problems, of that magnitude, are nothing new to the U.S. retail scene. Some economists, beginning in the 1960s, predicted bad times ahead for traditional department stores especially those who refused to change with the times. Problems first surfaced during the recession of 1957-58 when about fifty department stores closed their doors. If a minor recession like that forced so many stores to close imagine what a major economic depression might do to this industry. Many economists believed that the future of U.S. retailing would be in the hands of a new breed of retailer. They would not only fulfill the needs of their customers today, but also, set the pace for future consumer spending. If department store owners doubted their wisdom they had only to look around. Small suburban shopping strips, large-scale shopping centers and huge regional malls with their growing number of discount department stores and specialty shops had begun to nudge out giant retailers. It would be only a matter of time before they dominated. Critics, at that time, considered these recent, and in many cases, dramatic shifts in the preferences and practices of customers to be a major wake-up call for traditionally-focused retailers. They warned department store owners to act quickly to combat this growing threat or they will find themselves out of business. Specific recommendations for change ranged from adopting more flexible layaway plans and instituting better return policies to offering a greater variety of merchandise and initiating more lenient installment programs. Unfortunately, few large-scale retailers paid much attention to these warnings. U.S. department stores, in the immediate post-war years, enjoyed unprecedented high profits. Rising wages for the U.S. workforce, promoted in large measure by an expanding national economy, accounted for much of it. The majority of department store owners saw no reason to worry about potential future financial downturns and they certainly were not about to change their highly successful business strategies. Local retailers viewed these dire warnings as just that, unsubstantiated caveats with little basis in fact. Or so it seemed, then. Large-scale store owners believed that this latest round of competition would end quickly once their loyal customers realized that traditional department stores still provided them the best quality merchandise and services at the lowest possible price. Of course, this scenario did not unfold like that. Instead of seeing less competition over the next several decades, it only intensified until it dominated local retailing. Let's Go Shopping at the Square iii Main Body Let's Go Shopping at the Square 4 The Shopping Experience of a Lifetime Key Takeaways By the 1970s, discount department stores, shopping centers and large malls accounted for 35% of the entire U.S. retail market. Discount department stores in particular, represented the fastest growing part of this phenomenon with annual profits exceeded $20,000,000,000. Leading discounters, at that time, included Ames, Bradlees, Caldor, E.J. Korvette, Fisher’s Big Wheel, Jamesway, K-Mart, Kuhn’s-Big K, TG&Y, Wall Mart and Zayre’s. [1] Learning Objectives Some of the largest traditional department store chains tried to counter this competition by opening their-own discount outlets. For example, Montgomery Ward introduced Jefferson Ward, while Chicago-based Jewel unveiled Turn Style stores. Not to be outdone by their competitors, J.C. Penny opened The Treasury and Atlanta-based Rich’s debuted Richway. Marginally successful, the majority of national chains never ventured into these unchartered waters. Economists, in the 1970s, castigated the local department store industry for not readily changing with the times; however, few predicted its demise. After all, large local department stores had ruled the retail industry for nearly a century and a half. Well-run organizations with a full range of affordable, quality goods and services, they served millions of shoppers annually. They represented a success story well worth talking about. The fact that many U.S. cities in the late 19th and early 20th century boasted two or more department stores illustrated their continued popularity. Customers loved buying there and these highly motivated retailers committed themselves to the cause. Competing for the same customer-base within a specified market area never fazed these enterprising leaders. They relished any-and-all challenges. In their minds, fierce competition promoted innovation, this in turn, resulted in a steady flow of high quality goods and unmatched professional services. Most retailers began by selling nearly everything. With time, they discovered their particular retail niche and increasingly catered to customers who valued their specific products and services. Shoppers showed their loyalty to these shopkeepers through repeat business. Additional buying incentives such as periodic sales on certain items along with valuable store services brought hordes of new shoppers into their premises regularly. Prized services, in particular, denoted one retailer from another. These services ranged from award winning restaurants and stylish beauty salons to exciting travel agencies and delicious wine and cheese shops. Such luxuries were new to late 19th and early 20th century retailing. Add into this favorable business mix, heightened one-on-one customer service, as demonstrated through competent salespersons and shrewd store buyers, and how could shoppers lose? The public looked forward to the splashy window displays announcing different holidays and special store events. St. Valentine’s Day, Washington’s Birthday, Easter, Mother’s Day and Memorial Day followed by Graduation Day, Let's Go Shopping at the Square 5 Father’s Day, Independence Day, Thanksgiving and of course Christmas enticed thousands of customers to these establishments annually.

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