Evolution of Retail Formats

The origins are as trade itself. Barter was the oldest form of trade. For centuries, most merchandise was sold in marketplace or by peddlers. Medieval markets were dependent on local sources for suppliers of perishable foods because journeys wee far too slow to allow for long distance transportation. However, customers did travel considerable distances for specialty item. The peddler, who provided people with the basic goods and necessities that they could not be self sufficient in, followed one of the earliest forms of retail trade. Even in prehistoric times, the peddler traveled large distances to bring products to locations, which were in short supply. They could be termed as the early entrepreneurs who saw the opportunity in serving the needs of the consumers at a profit. The remains of major Greek cities are witness to the fact that retailing existed even then. The agora, or the market, which existed then, served the needs of the local populace. 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. The original flea market is likely to have existed is the Marche’ aux puces in the suburbs of Paris in the 17th century. Over the years, these markets have existed across major cities of the world and were selling a diverse array of products.

Social developments and their Impact:

The development of trading is intimately associated with social developments over the ages. Two important developments of the eighteenth century – the development of railroads and that of telegraphs – largely affected the growth of the retail trade. Orders could be placed and confirmed by telegraphs – largely affected the growth of the retail trade. Order could be placed and confirmed by telegraph and the goods arrived by train. The wholesale business actually developed with the advent of the traveling salesman. The success of the wholesale business led to the emergence of the departmental store.

In 1852, Bon Marche, the first departmental store set up in Paris. Bon Marche revolutionized retail at that time, by relying at that time on volume rather than high mark up to make money. The store also offered customers a money back guarantee on purchase. 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. Theorists believe that the department store was a format that evolved simultaneously in Paris and in Philadelphia in the 1860’s. One of the first department stores, which opened in the United States, was Stewart’s in New York; which was followed by Macy’s after the civil war.

The late 1800s saw the rise of the so called five and ten cent stores, which emerged to serve the needs of the poorer classes. The world witnessed a new form of retail when Montgomery Ward launched the world’s first mail order catalogue in the year 1870. Most rural dwellers encountered mass merchandising in the form of mail order catalogues. The success of mail order business led to the emergence of chain stores. The first chain store was A & P (Atlantic & Pacific) – a grocery store founded in 1859 by George F Gilman. Another important chain store was F W Woolworth set up in 1879 where nothing cost more than a dime; it was a predecessor to today’s dollar stores.