Instant gratification is key to Big Box success
Jerry Epperson -- Furniture Today, January 7, 2007
There's a new book out titled "Big-Box Swindle" by Stacy Mitchell. It caught my eye because many believe the first modern big box targeting the big baby boom generation, now 42 to 60 years old, was Levitz Furniture Warehouse, which exploded on the scene in the 1960s and was the nation's leading furniture retailer by the early '70s.
Customers would enter Levitz through the warehouse so they would be overwhelmed by the high racks of boxes, usually bearing brand names like Kroehler, Singer and others. In the large showroom, they would be greeted by a smiling salesman in a brightly colored blazer. Ralph, Leon and Sid Levitz learned the industry from their father and took the warehouse concept national. Others opened clone stores — Wickes, Federated's Gold Key, Mangurian's.
America truly loved it at Levitz, where you bought it and took it home, or paid a little more and had it delivered in a day or two.
Big boxes in other categories soon followed. Circuit City was the same concept originally, and today we have the Best Buys, Toys 'R' Us, Lowe's, Home Depot and on and on. They all offer vast selection and instant gratification.
I believe instant gratification is what really made the original Levitz stores successful, not price or selection. Before Levitz, furniture and most consumer durables were bought and then ordered. I remember waiting for my family's first living room suite, Victorian with lots of showwood and incredibly uncomfortable, but Mom loved it. That was how it was done in the 1950s and earlier.
Mitchell's book notes that most communities subsidized big-box stores, often at the expense of local retailers. The federal tax code was changed in 1954, and since then federal, state and local authorities have given tax breaks and subsidies, and built roads and public utilities, to bring big stores to their communities in hopes of generating more sales tax revenue and additional employment.
That often doesn't happen, Mitchell says, because of lost jobs at local retailers. She also discusses the loss of "local premiums," the monies spent by smaller retailers locally as opposed to the big boxes, which tend to spend centrally, leveraging their buying power. The obvious target of her book is Wal-Mart, the nation's largest retailer of just about anything.
Ours is an industry that is adjusting to a more capital-intensive retail model, forced largely by the attractive prices of imports. That's creating new opportunities, but I hope we don't lose the entrepreneurial aspect of our industry, like we've seen with pharmacies, groceries and others.
We need to act now to save this heritage.
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