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Unit 1: Introduction to Retail Environment

products to locations, which were in short supply. They could be termed as the early entrepreneur Notes
and who saw the opportunity in serving the needs of the consumers at a profit. In most parts of
the world, a flea market-typically a place where vendors come to sell their goods could be the
earliest forms of retail congregations.

Social Development and their Impact

The development of trading has been intimately associated social development over the ages.
The development of railroads and telegraphs largely affected the growth of retail trade. Orders
could be placed largely and confirmed by telegraph and the goods arrived by train. The wholesale
business actually developed with advent of the traveling salesman. The success of wholesale
business led to the emergence of the departmental store.

Did u know? In 1852, Ban Marche, the first departmental store, was setup in Paris. Bon
Marche revolutionized retail at that time by relying on volume rather high mark-ups, to
make money. The store also offered customers a money back guarantee on purchases. By
the year 1897, the store sold more than $30 million worth of goods per year. The success of
Bon Marche led to other department stores coming up across Europe and America, which
continued to grow and flourish. Until World War-II Theories believes that the department
store was a format that evolved simultaneously in Paris and Philadelphia in the 1860s.
One of the first department stores, which opened in United States, was Stewart’s in New
York, which was followed by Macy’s after the civil war.

The world witnessed a new form of retail when Montgomery ward launched the world’s first
mail order catalogue. Most rural dwellers encountered mass merchandising in the form of mail-
order categories. The success of mail order business led to the emergence of chain stores.

Industrial Revolution

The industrial revolution necessitated changes on the retail front. The increase in urbanization
meant that consumers now clustered in smaller geographic areas. This led to the emergence of
shops, to serve the needs of the locals. The middle-income consumer’s increased and mass
transportation became a way of life.
The industrial revolution saw the retailers’ evolving new methods of operation. The importance
of food for the working class customers and the difficulties faced by them in procuring the food
products led to the emergence of cooperative societies in the United Kingdom. By the year 1900,
these societies had achieved 6-7% of the retail sales in the country.

Emergence of Self-service

In the early part of the 20th century, the American housewife, while shopping for her family’s
dinner bought meat at one store, glossaries at another, and fruits and vegetables at still another.
It was back then that chain stores which existed such as the great Atlantic and Pacific Tea Company
(now known as the A & P chain of stores) started introducing new methods of food selling.
Because they did large volume of business, these chain stores could stock larger quantities of a
greater variety of products and afford to sell them at lower prices. Soon these chain stores too
began to sell meat, fruits, vegetables and dairy products; all products under one roof and
housewives liked this idea of one stop shopping.

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