DEPARTMENT STORE

Department stores emerged in the mid-1800s and offered a wide variety of goods for sale in various categories. Many were transformed general stores (which offered a variety of goods but were not divided into departments), while others evolved out of dry goods stores (which sold textiles and related merchandise). The first bona fide department store was established in Paris: the Bon March (French, meaning "good bargain") opened its doors in 1838.

Between the 1850s and 1880s, numerous department stores opened in U.S. cities. The department store Jordan Marsh was founded 1851 in Boston, Massachusetts. R.H. Macy's was founded 1858 in New York City and was known for its creative advertisements. Wanamaker's, founded in 1861 in Philadelphia, successfully implemented fixed pricing so that customers no longer haggled over price. Marshall Field was founded in 1881 in Chicago, Illinois, and within twenty-five years it became the world's largest wholesale and retail dry goods store. These pioneer department stores, multi-storied buildings located in downtown areas, introduced many innovations to merchandising, including the policy of returnable or exchangeable goods, ready-made apparel, clearly marked prices, and window displays.

By the early 1900s department stores could be found throughout the country. The timing was right for their emergence: urban centers grew rapidly at the end of the century, giving department stores a ready clientele. Also the advent of the telephone, electric lighting, and billing machines helped retailers conduct business efficiently. Transportation improvements allowed for the shipment of large quantities of goods, a variety of finished goods were mass produced (which increased supply and lowering production costs and consumer prices). By the 1910s the stores were part of a new mass culture, which centered in U.S. cities. During the twentieth century, department store sales typically generated between six and twelve percent of total annual retail sales.