Retailing: Harrowing, Hustling, and Expanding

Underneath Washington Street the subways cross each other. It is there that Boston's retailing prototype, the department stores, have buried their foundation deep in harbor mud to catch the swirling masses before they reach the light of day.

Up off-black trains crowd after crowd jostles and fights past grimy turnstiles into a world of pale blue walls, glass doors, chrome-plated escalators, and emaciated salesgirls. Plump ladies fill the aisles, new mothers fondle bibs, middle-aged housewives try on the latest fashions illuminated by indirect lighting, and dirty-faced boys in brand new shoes follow Mama from counter to counter.

Cash registers jungle, Johnny Ray drones over the crowd, and children wail for their mummies. Everyone hurries.

"Be with you in a just a minute, sir" the girl says. She looks haggard. "That will be eight-five cents, ma'am." "No, these are not tropical gold fish." "Just a minute sir, I believe you only gave me a quarter." "No, South Station is down the sheet."

This is the old retailing business. This is the land of overcrowded sidewalks, of subways and skyscrapers. This is the land of the central location where the bargain hunting customer first clashed with the ulcer-conscious executive.

On the outskirts of Boston and every large city a new retailing business is growing. It is still the land of Hopalong Cassidy suits, vacuum cleaners, and nylon stockings. It is also the land of vast parking places, long, low buildings and customer convenience.

Already this new frontier in American retailing is threatening to change the merchandising and shopping habits of all the larger metropolitan areas. In Los Angeles last year only a third of the area's department store volume was accounted for in downtown stores. Framingham's now Shoppers' World is typical of the retailers rush for the suburbs, and is typical of the markets gradual change in tactics to meet a change in American way of living.

New Tactics

Rapid suburban growth, more automobiles, choked traffic, inadequate parking, and poor public transit have finally forced the retailer to switch his tactics to catch up with the people.

So far, the planners into the future have been all too few. No branch department store has yet proved too large. The retail world is already full of men who have built too small. Sentiment runs today that 150,000 feet is the absolute minimum for a full-line suburban department store, and some go as high as demanding 300,000 feet to do the right job.

Even now, the retailers are again faced with a parking problem. They have not built their suburban lots large enough. In an ever-changing industry operating at a helter-skelter pace this lack of planning represents one of the crying needs of the retail trade. The business has never had and may never have the chance to catch up with itself, relax, and plan.

The retailing scheme consists of over a million and a half independent, chain, leased department, side-line, and consumer cooperative stores, together doing the third largest volume of business in the country, and supplying 90% of the needs of the country.

Despite its recent development, the retail industry is far from easy street.

In an age of mechanization, the trade still must rely almost solely upon manpower for its success. The IBMs are still few and the salesgirls are many. It is business of buying and selling. It is a business whose success rides on the infinite perception, dogged persuasion, and constant conversion of human beings.

Cut-Throat Competition

Although they did a business of over 153 billion dollars in 1952, retailers, faced with half the costs of overall distribution and cut throat competition from within their ranks, only averaged a profit of one to three cents on the dollar. The problem of reducing distribution costs will fall on the coming generation of retailers to solve before the industry can offer high returns to its stockholders, and establish itself as a blue-chip investment field.

Retailing may have lagged behind other industries in its development, but never because of inaction. Merchandising has always been a dynamic field, of necessity living from day to day, dependent upon its ability to guess what the public will want tomorrow. With ever-fluctuating customer demand and price competition setting the pace, retailers have until recently hesitated to gamble on long-range planning.

The first steps in an organized industrial development can be seen in the move t the suburbs.

The move has only served to heighten the ulcer-forming problems of the merchandising executive. All the old problems of daily sales reports, increased expense problems, profit responsibilities, slow selling merchandise, fashion trends, and long hours have taken on a new suburban slant. The result has been to make the retailer's job one of the toughest and most unpredictable in any field. Rapid turn overs in executive positions are the rule, not the exception.

With the industry based more than ever on the query "What's new?", the trend and demand is more than ever toward younger men to fill extensive junior executive posts. yet younger men are sorely lacking in the field.

High Overhead

Department store heads blame high initial salaries offered by more mechanized industries for luring away college graduates who, they feel, would do far better in the merchandising field in the long run.

Yet salary and the rate of advancement are the strongest inducements t men to enter retailing. After completion of the initial six to 18 month training period, "the sky's the limit" for a talented person able to stand the physical rigors of the buying and selling life.

Establishments customarily divide themselves into five departments: merchandising, management, publicity control and finance, and personnel. Although the trend is away from the emphasis now placed upon the merchandising division, it is still by far the most dominant and distinctive feature of the business. It includes the essential functions of buying and selling.

The buyer is still the center of the retail trade, and will probably always remain so. He is the hub of a wheel around which flourish dozens of advisory bureaus connecting every phase of the business. They exist solely to support the buyer. He must go out and bring in the goods that will sell. It is on his success above all that every branch of the retailing industry must stand.

Nine out of ten prospective retailers gamble their physical energy and mental capacity in the hectic field of buying.

For college graduates the gamble usually begins to pay off within three years with no more serious results than eventual upper bracket incomes.

Buyers live at a phenomenally fast pace, performing a dynamic and fascinating function. The starting pay is low, and the training period is tedious, but 18 months will make a man an assistant buyer, and sometimes another 18 months make him a full buyer. With companies hiring one buyer for every 50 employees, advancement is rapid.

Salaries depend upon the size of the organization, and the sales volume of the department for which a buyer is working. Pay will run from 1 1/2 percent to 2 1/2 percent of that volume. An assistant buyer usually earns between $50 to $125 a week; a buyer makes from $75 a week to $25,000 a year after bonuses.

Stores currently follow one of two dif- ferent schools of thought on the function of a buyer, but the tendency seems to be toward turning the buying job into that of a department, manager.

Under the two pyramid system in effect since the stores reached the department, stage in the info 1800's the buyer is completely separate from any selling responsibilities. All sales and store operations are handled by the management division. But under the increasingly popular department manager system, the buyer takes on all the duties of a small store owner.

Increased Sales

Department stores have found that giving a buyer the additional supervision over selling and facilitating functions, as well as over buying, sales events, and profit accounting, has tended to increase sales. With minute records of day-to-day sales acting as chock-ups, the buyer can no longer shift blame onto the management department for poor sales of his specialty.

Most men, however, spurred on by early assistant buyer openings, enter departmental store buying, then branch out after gaining experience. The department stores concentrate on instilling a comprehensive knowledge of merchandising in its junior executives, making a rapid rise in any branch of the field.

But not all men leave well-playing positions for better paying jobs elsewhere. The physical demands upon the department manager or buyer together with constant mental strain are enough to soon force the unqualified out of retailing. It is no life for a person looking for the stability of routine work.

The field is dynamic. It is a young man's field, and exacts the work that only a young man can give. The hours are long. planning must be done off the job, and effective planning is essential for rapid advancement.

Yet even for the experienced buyer the field offers a minimum of security. Retailing is a fashion business. If a buyer does not have what the people want, he goes. few stores will risk hiring a buyer or merchandise manage for more than one year at a time. A buyer may even be extremely successful for several years, then he dumped for not surpassing his previous record. Often the buyer goes for reasons over which he has no control.

All is not buying however.

Establishments have lately tended to increase personnel in their other departments much more rapidly than in the merchandising divisions. More jobs and faster promotions will probably always be found in the merchandising end, but top fight executives today no longer regard buying and selling as the sole guts of the trade.

Other industries have proved the advantages of personnel departments, modern advertising, and detailed record keeping; retail trade is now trying t catch up. Executives expect the next large improvement to come in the application of electronics to the industry. Rapid expansion to the country and suburban areas is proving all the while the necessity for having top men in store management and control, as well as in buying and selling. Expansion, of course, means more demand for college graduates to fill additional posts.

Lack of Manpower

But employment offices of the big retail outfits report they do not have enough men to fill their training program courses, and are having to go outside their companies t find the needed men. The most recent move t increase the attractiveness of the business has been elimination of the six-day working week. Yet knowledge that the free day will probably not come on Saturday has served to decrease the effectiveness of this move.

Personnel departments place most of the blame on the draft for the recent slack in interested college graduates. Those not being drafted want to go on to graduate schools to avoid having to serve and to complete as much education as possible.

Major stumbling-blocks to men entering retailing are the tough training programs. College graduates recoil at the prospect of six to 18 more months of detailed training during which time they will perform no responsible function, but even business school graduates are required to submit to the technical merchandising instruction.

The periods vary in length and content with the size of the establishments.

In the smaller companies, the complexities of the trade, especially the art and science of merchandising, are learned solely by rotation through one department after another. This direct experience method is often supplemented by talks from heads of departments.

In the larger companies specialized courses cover every phase of the retail field, and often require half the work to be done on the student's own time. The training aimed at developing a buyer's sense of merchandising hard though it may be, qualifies a program graduate to enter any aspect of the retail trade, and advance with rapidity unknown in other fields of business.

Opening in personnel, control, finance, management, and advertising are filled from the same training group that supplies a store with its assistant buyers, depending on individual talents.

Of course the problem facing the man about to enter the retail field, whether to stake his chips with a large or small firm, with a single store or with a chain cannot be answered.

The battle between the single store and the chain store has been in progress ever since the close of the Civil War, when the chains first began t spread out over the country.

Until recently the mortality rate among independents has been high, yet the cause of the rate has largely been poor management. Independents still do over half of all retail business, and can usually truthfully claim to give customers more individual, personal service than can the chains. Individual stores tend to foster higher employee morale and greater interest in the welfare of the company. In certain states, chain stores operation has been the target of high taxation by legislatures.

Yet, through standardized methods of operation, efficient management, scientific location, and the advantages gained through quantitative buying, the chains have taken almost half the total sales volume away from the independents. But the necessity for standardization in the chain store will prevent it from ever eliminating the small merchant with his personal contacts with the customers.

The advantage is with the chains, and large independents in attracting college graduates into the field, yet the dominating attraction of the retail trade can be found in any part of the tremendous field, from the grocery to the specialty store to the department stores.

The appeal of the field is in its infinite variety of problems. Retailing stretches from baby pins to refridgerators from bathing caps to water sprinklers. It involves all kinds of humanity; it faces all kinds of problems. It is a dynamic proposition.Photos Courtesy of FORTUNEThis project, being constructed north-west of Chicago, typifies the Leviathan trend in modern department stores. Located in a suburban area, it provides parking space for over 7,000 autos.