6 Innovators Who Crafted Modern Retail (Who Are Not Jeff Bezos)

6 Innovators Who Crafted Modern Retail (Who Are Not Jeff Bezos)

July 10, 2020 Off By Koehler Home Decor

How much do you know about the history of retail and the people behind the innovations we take for granted these days as we run our own retail businesses?

While Jeff Bezos and Amazon may have changed what seems like a lot, there are other retail pioneers that came before him that deserve more credit as well. And understanding who these people were and what they did may even help you innovate and expand within your retail business too!

Here’s a look at just some of these clever folks and their contributions to retail that have helped shape it as we know it today.

Harry Gordon Selfridge — Credited With The ‘Golden Rule’ of Retail: The Customer is Always Right.

The retail business would definitely not be what it is today if it were not for Harry Gordon Selfridge, the Midwestern-born business tycoon.

At a young age Selfridge found retail success, working his way up quickly among the ranks at Marshall Fields which we now know as Macy’s. He is credited with establishing the golden rule of retail: “the consumer is always right.”

But even advancing age could not quell his love of the trade. In early retirement Selfridge found himself traveling with his wife to London. It was then that he realized that this bustling, trendy city was without a department store that would be able to compete with the increasingly successful American stores.

In addition, department store shopping was still seen by most Londoners as something reserved for the rich, so Selfridge set out to introduce shopping to the masses. A few short years later, in 1909, Selfridge opened Selfridges & Co., a beautifully merchandised store with thematic spaces, restaurants, a hair salon and a cigar smoking room.

Not only did Selfridge develop enticing exhibits of merchandise that consumers could touch and connect with until they bought a product, but through informative and interesting in-store experiences he attracted customers much as you would find in a museum. Today’s department stores owe him a lot.

Clarence Saunders — Piggly Wiggly Founder And The Idea of Self-Service.

The US saw the birth of self-service in 1916, with the first Piggly Wiggly. Before 1916, shoppers had to hand their shopping list to a clerk who would grab their goods from behind a counter for them. No touching allowed was the rule.

Clarence Saunders felt this was a waste of time and resources for both retailer and customer. High overheads, long queues, and losses of income due to unpaid debts motivated Saunders to change the way we shop for food and everyday goods.

Piggly Wiggly featured shoppable displays, a constantly changing store layout to highlight specials and new items, and multiple lines at the check-out for customers. In 1917 Saunders patented the idea of a self-service store (source) and within just a few years grocers and general stores everywhere were following suit, making self-service the new standard.

Sylvan Goldman — Inventor Of The Shopping Cart

As the idea of self-service started to gain momentum, entrepreneurs everywhere jumped on the chance to get into the rising grocery market.

Because of the gradual downturn in California’s oil boom, Sylvan Goldman found himself relocating to his childhood hometown in Oklahoma after selling off his failed wholesale manufacturing business. Goldman was exposed to the concept of supermarkets in California, a new style of store where consumers could get everything they needed under one roof.

Goldman and his brother took that concept, borrowed money from their wealthy mother and opened a supermarket in their home state of Oklahoma. They opened 55 stores in just three years, but (very cleverly) sold off the chain before the 1929 stock market crash.

Eager to move into something new, Goldman wanted to be the one with an idea other retailers would be eager to replicate. He remembered watching women walking through his stores, struggling trying to carry products on one hip and an infant on the other, so he set about solving the issue. His solution was the first retail shopping cart.

Surprisingly, most people were not initially pleased by the shopping cart, especially women. Women were increasingly liberated in their ideas, and many thought the cart was symbolic, as though they were to keep pushing strollers until their old age and balked against using it.

To address the backlash, Goldman was forced to hire male and female models who promoted the carts as shoppers walked into shops. The idea eventually caught on, and soon women thanked Goldman for creating something that made their shopping easier.

Frank McNamara — Creator of a New Age of Retail Consumerism.

“There will only be two groups of people-those with credit cards and those who can’t get them.”

Frank McNamara came onto the retail scene in 1950 and founded Diners’ Club International. With it a new era of consumerism flourished and the credit card was born.

The Diners’ Club set up a network of restaurants and entertainment outlets that would allow customers to add their bill to an account at the end of each month. Although DCI did not collect interest on these charges, the network establishments paid $5 a year to DCI and club members 7 per cent of sales. This business model was the first of its kind.

Others were quick to jump on the bandwagon though. A small company called American Express produced the first physical charge card, with DCI quickly following suit. The cards became not only conveniences for consumers but also status symbols, as one had to have a certain amount of money to obtain one, leading to the quote you see above.

The modern, carry a balance credit card was born in 1958. Bank of America launched the first all-purpose card, the BankAmericard, which could be used at any establishment with its processing network and the balance on which could be paid off in monthly installments. And consumer spending -and debt – has never been the same again.

Victor Gruen- The Father of Impulse Retail

It was Victor Gruen who brought us the shopping mall as shopping became part of American culture and earned his title as (arguably) the most influential retail architect of the twentieth century. But while shopping malls were the focus of his career, it was the “Gruen effect” that left a lasting impact on how we shop today.

What makes you enter Target to buy a new phone charger and leave with $200 worth of bath towels and cosmetics you did not intend to buy is still known in retail circles as the Gruen effect.

Gruen underlined the value to retailers of providing an enticing window display to draw customers to their store, so much so that at first it did not allow companies to showcase their names at the entrance of their stores in his malls.

But where the Gruen effect really takes hold is after the customer walks into the store, realizing they ‘re not quite sure where the item they came in for is located, so they end up browsing the entire store, gathering impulse buys along the way because the merchandise displays are so appealing.

Dan Kohn — Credited with The First Commercial Encrypted Digital Payment.

In the early 1990s, the shopping mall had become the focus of American retail consumerism. But all that would begin to change in 1994 with a Sting CD.

Although transactional internet exchanges began in the late 1980s, it was internet entrepreneur Dan Kohn who conducted the first secure online retail transaction, which meant that the seller’s credit card information was encrypted or, as he put it ‘hidden away’.

To test his system, he created a website, NetMarket, and sold a Sting CD to a friend. He created the first online music store soon afterwards, and the online shopping cart was born, oddly enough in the very same year as a certain Jeff Bezos founded Amazon in Bellevue Washington.

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