Standing on the shoulders of giants
13 books about great retail innovators and luminaries
“If I have seen further it is by standing on the sholders of Giants.”
Reading is an important way to learn about the retail industry. There is a lot of discussion about how much and how fast the retail industry is changing. From some of the discussion one can get a sense that all old knowledge about the industry is outdated and not worth a lot.
However, the more I have read about the history of the retail industry, the more I have realised how much there are similarities between the great retailers of the past to the ones shaping the sector today.
One book review per month
Despite the fact that much has changed within the retail industry and the society at large, many things have remained similar when it comes to succesful retail pioneers. I intend to shed some light to many of the past greats by introducing one great retail founder/leader per month.
Each of the books illustrated here will be reviewed, one book per month.
There are probably dozens of different books to read and stories to tell, but I have selected the following books to cover. I have selected these books, because I believe they tell the stories of the most important people and companies influencing the retail industry as we know it today.
Building the list of only 13 retailers has required me to leave some great retailers out. Why M&S and not John Lewis or why Selfridges and not Nordstrom? Some selections have been choices that could have gone either way.
The list is somewhat skewed to department stores (Bon Marche, Selfridges, Sears, M&S) and to grocery retailing (A&P, Walmart, Trader Joes, Aldi). However, these two concepts have been fundamental in the history of retailing.
1. The Bon Marché, Michael B. Miller
What Jeff Bezos is to online retailing, Aristide Boucicaut in Paris (alongside A.T Stewart in New York) was to the department store concept. The great department stores of the late 19th century and early 20th century fundamentalismi changed the way retailing was done.
That happened through increasing the amount of products sold and lowering prices by increasing volumes. This same cycle has happened in retailing numerous times since and also to the detriment of the great department stores.
The book illustrates how these great retailers saw the rise of the middle class and the technological evolution (for example railroads) that enabled new forms of retailing, such as high rise buildings in city centres as well as mail order retailing.
2. Shopping, Seduction & mr Selfridge, Lindy Woodhead
If Aristide Boucicaut and Le Bon Marche initiated many of the models made famous by the great department stores, Harry Selfridge was the man who really made the concept famous. He perfected many of the trademarks of department stores, such as use of publicity and experiential stores to draw in crowds.
Harry Selfridge grew up learning about the department stores from one of the early innovators of the concept, Marshall Fields in Chicago. Harry Selfridges’ story encapsulates many learnings (positive and negative) for the modern day retailer.
3. Great A&P and the Struggle for Small Business in America, Marc Levinson
If department stores (and the men running them) became famous symbols of the early 20th century retailing, one concept was even more important: chain retailing. The Great American & Pacific Tea Company (later known as A&P) was one of the first retailers to form a chain of stores throughout the United States. This enabled them to grow rapidly. With the invention of self-service retailing, A&P responded swiftly and became by far the biggest retailer in the world.
Marc Levinson’s book explores the story of the A&P Company in detail. The book is a great depiction of how a company can grow to dominate an industry spanning an entire continent. The spectacular rise of A&P is also a story about corporate power and the struggle between public sector regulators and Corporate America. This sounds very familiar in today’s retailing setting also.
However, probably the most important contribution of the book is to introduce us with one of the most important families in the history of retailing: the Hartfords.
4. Shaping an American Institution: Robert E. Wood and Sears & Roebuck, James C. Worthy
Everyone in retailing knows about the greatness of Sears & Roebuck, but very few know how and by whom did Sears become the biggest retailer in the world. It was not by Richard Sears & Alvah Roebuck. Either it was not by mail order retailing.
The crucial people behind the rise of Sears & Roebuck were the early CEO Julius Rosenwald and especially the man whom he recruited as his successor, Robert E. Wood. Mr Wood understood the importance of both the rise of the automobile and the growth of the middle class and suburbs. By transitioning to department stores in the nascent suburban malls and subsequent rapid expansion, Sears was able to become the biggest retailer in the world.
Robert E. Wood is one of the most significant retail leaders of all-time. Sears became such a highly influential corporation that even the management guru Peter Drucker used it as an example of an exemplary leadership.
5. The Rise And Fall Of Marks & Spencer: ..and How It Rose Again, Judi Bevan
At it's peak in the mid to late 1990s, Marks & Spencer was the most important retailer in the UK. It was by far the most profitable British retailer and only second most profitable retailer in the world after Walmart.
M&S embodied the fundamentals of great retailing by offering good customer service and high quality products with great value as the prices were often a fraction of what similar branded products costed at the high streer. M&S was able to do that, because of their strong long term and mutually beneficial partnerships with British manufacturers.
The foundation to the success of M&S was built by Simon Marks (son of the founder) who ran the company for almost five decades until his death in 1964.
Lord Marks inherited Marks & Spencer as "penny bazaars" founded by his father Michael Marks and Tom Spencer. In the following decades Lord Marks transformed the company to one that became the most revered British retailer of its time.
6. Sol Price: Retail Revolutionary & Social Innovator, Robert E. Price
Sol Price is a little known name even to the retail industry insiders. However, his influence has touched the entire sector.
He was one of the founders or early innovators of the big box retailing concept that revolutionised American and subsequently European retail industries during the 1980s and 1990s. In 1954 Sol Price founded FedMart that was one of the first big box retailers and also warehouse clubs.
He personally inspired both Sam Walton and Bernie Marcus as they were founding both Walmart and Home Depot. Most important influence Sol Price had on his protege Jim Sinegal who worked for Price before founding Costco.
All of the three companies are now among world's most valuable retailers.
7. Made in America, Sam Walton
No list of great retailers would be complete without Sam Walton, the founder of the world's biggest retailer (and corporation), Walmart. Made in America is a down to earth story of how Sam Walton built Walmart that we know today from a humble store in Bentonville, Arkansas.
The book depicts many of the fine details that mr Walton perfected on the way to becoming the world's greatest retailer. Many of Sam Walton's principles are still very much relevant today.
Sam Walton ends the book in wise words about competition and someone eventually challenging Walmart’s might: “Somewhere out there right now there’s someone—probably hundreds of thousands of someones—with good enough ideas to go all the way”.
As it happened, as Sam Walton was writing the final chapters of the book, an employee at a hedge fund D.E. Shaw was studying how the nascent technology of internet could be harnessed for business. A year after Made in America was published, the employee, Jeff Bezos, went on to establish his company, Amazon.com.
8. Becoming Trader Joe, Joe Coulombe
Trader Joes is not the great retail empire that Walmart is, nor is it the great innovator that Amazon is. But Trader Joes is one of the rare retailers that is uniquely different from the mainstream. Like IKEA or Costco, Trader Joes does things differently.
Trader Joes is a company of great paradoxes. It provides a great customer experience in the store with unique and exciting products, but at the same it only offers around 4 000 products.
Trader Joes also doesn't do traditional ad campaigning, but it spends a lot of time to craft the strange and exciting Fearless Flyer leaflets. These and many other controversies fly on the face of common wisdom on how grocery retailing should be conducted.
Still Trader Joes has a loyal following among customers in certain parts of the United States. Trader Joes is also very efficient retailer with industry leading inventory turnovers and revenues per square feet.
9. Built from Scratch, Bernie Marcus, Arthur Blank & Bob Andelman
Home Depot is one of the pioneers of the big box retail concept that swept the American and European retailing landscapes during the last five decades.
Home Depot has been one of the fastest growing retail companies ever. It was started by two previous DIY executives after being fired from the Handy Dan chain, Bernie Marcus and Arthur Blank.
Home Depot has over time become famous not only for its fast growth and big stores, but also for its great customer service. With regards to the previous book about Walmart, Home Depot was built around the same time and the two companies had a deep admiration for each other. Despite some competitive overlap in their assortments, the companies (founders) did quite a lot of collaboration with each other.
10. Bare Essentials, Dieter Brandes & Nils Brandes
The Albrecht brothers who have founded the discount grocery retailer Aldi are notoriously secretive. In their book Dieter & Nils Brandes share the story of how Aldi was set up and why it is divided into two different companies: Aldi Nord & Aldi Sud.
The book also highlights what makes a discount grocery retailer unique and what kinds of trade offs Aldi makes in order to able to offer very low prices. These trade offs are also the reason why Aldi (and their main competitor Lidl) has been able to spread into so many markets. They are among the most internalised retailers in the world. Traditionally grocery retailers can't take their businesses abroad easily.
11. Legendary letters : Ingvar Kamprads visionary leadership at IKEA, Staffan Jeppsson
I have chosen this book to the list even though I have not read it yet. There are two reasons.
Firstly, IKEA is such a unique company in the way it can differentiate totally from the competitors. The company is built in a way that makes it almost impossible to copy it. Even Michael Porter himself uses IKEA as an example of great strategic differentiation.
Secondly, Ingvar Kamprad was so little known to the public despite building one of the most succesful retail companies in the world. My hope is that this book can summarise some of the thinking behind IKEA.
12. The Man from Zara: The Story of the Genius Behind the Inditex Group, Covadonga O'Shea
Similarly to Ingvar Kamprad or the Albrecht brothers, Amancio Ortega is a little known person behind one of the best known retail companies. During the last decades Zara (Inditex) has grown to the top of the fashion world. Inditex has been able to become more efficient than its main competitors and at the same time grow to dominate especially European fashion markets.
13. Everything Store & Amazon Unbound, Brad Stone
As there are only 12 months in a year, December will have two book reviews (with three books in total). As a bonus book to highlight the list is a review of two books about the same company, but from different time periods. Brad Stone’s books provide a great overview into how Amazon was founded and grew to survive the dotcom bust and eventually become one of the most important companies of our time. The Everything Store book was published in 2013, at a time when Amazon was already a huge ecommerce retailer and a significant company, but not yet such a tech behemoth as it is today.
Everything Store was also published at a time, when most of the important projects that became the hallmarks of the Amazon today were already in place, but there was no idea how important they would turn out to be. Both Marketplace and AWS are mentioned in the book, but it is in Amazon Unbound that the true nature of their importance is unveiled.
Where Everything Store was a book about an upstart that is launched to conquer the retail world, Amazon Unbound is a book about one of the biggest and most powerful corporations in the world. The two books also illustrate interestingly how Amazon has changed internally from a start up mindset into a congolomerate. The books also highlight how the company and especially its founder is seen very differently in the public media. Jeff Bezos has transitioned from a geeky family man that founded a ecommerce company into a business superstar that mingles with the movie stars.