System and Business Management

Retail Merchandising a Science

W. J. Pilkington July 1 1910
System and Business Management

Retail Merchandising a Science

W. J. Pilkington July 1 1910

WHEN one discusses the business of the retail merchant from the scientific standpoint he at once must contend and work against prejudices of the average person against a subject with the word “scientific” attached to it. I know and we all know that usually when one speaks of a scientific proposition we at once think of the college professor. We are willing to let the university and the college take care of and study the scientific problems, but to business men and merchants to-day, as ever before, the studying of the retail business from the scientific standpoint is of vast importance. Never before in the history of the business world have we undergone the revolutionary conditions we are undergoing to-day.

The retail business is not done today even as it was a year ago, let alone twenty years ago. Many and many a retail merchant who fifteen, twenty or twenty-five years ago, found it comparatively easy to make a little money, to-day has discovered that it is almost impossible for him to make a respectable living and interest on the money invested. This man to-day will say to you that some way or other things have changed.

They tell you that years ago they were making a little money, but today it is hard for them to do so.

The trouble with such a man is that conditions have changed and they have not. They fail to understand that to-day, as never before, it is not only one's neighbor who is his competitor, but it is every other man on the face of the earth. Our fast railroad trains, our electric lines, our telephones, telegraph systems, wireless telegraphy and rural mail delivery have made of us one family. To-day the retail merchant must compete with every other retail merchant in the civilized world. No longer is trade in local boundaries bound to him. It goes where it pleases, it goes to the men who to-day know how to appeal to it and reach it scientifically.

It is time that as business people we understood that nothing happens in the retail business. Every condition existing in your business exists because something has caused it to exist. It exists because some scientific, fixed or natural law, whatever you please to call it, has brought about the condition. It is time that our merchants understand that everything in our business is ruled and regulated by fixed laws and principles. These laws and principles are the same to-day that they were when Adam and Eve were in the dress-making business. These laws never have changed and never will change. When once the retail world understands these principles, understands the basic principles involved in the retail business, then we will begin to remedy many of the existing conditions. Once the retail merchant knows that every condition in his business is the result of a fixed law, then he will see it is best to know what these fixed laws are, and what the effects of their violations produce.

See here, Mr. Retail Merchant, every time you violate one of these fixed, scientific or natural laws, you of necessity must pay the penalty for the violation. It makes no difference how shrewd you are, how wealthy you are, or how poor you are, a violation of one of these fixed laws brings on you the pently, the punishment. You cannot escape it, whatever course you pursue. If there is a condition existing in your business that is not satisfactory, that is not as it should be, it of itself is prima facie evidence that you have violated some fixed scientific law.

Let us apply this same principle to our physical bodies and we find we cannot violate any fixed law governing our human bodies without paying the penalty of the violation. You abuse some function of your body, you cross the fixed laws and the result is a diseased condition and this disease is the penalty nature visits on you for a violation of her laws. None of us expect to escape these penalties once we violate these laws.

Another thing, whenever you violate one of the laws governing your body you bring about a penalty, a diseased condition, and never again is that body the same as it was before. Some place, somehow, the disease will leave its scar. It maybe you cannot see the scar but nevertheless it is there. Because the unchangeable laws of nature and science tell us that that scar must be there. You can no more violate one of these scientific, fixed laws, governing your body and escape the penalty of the violation than you can violate one of the fixel laws governing your business as a retail merchant and escape the penalty. Don’t you see that both of them are dealing with scientific and fixed laws and the result must be the same in both instances.

Let us go further and see if we can apply these same principles to other phases of life. First, what is a “wrong,” how do you produce a “wrong?” There is only one way to bring about a “wrong” and that is to violate some fixed, scientific, natural law. You absolutely cannot produce a “wrong” in any other way. Now then, a man commits a crime, we will say he steals a horse. When he has stolen that horse he has violated a fixed law of right between man and man, and the next step you take is to try him in a court of justice, sentence him to the penitentiary and that is called the “punishment” for the violation of the law. This man serves his sentence and is dismissed from the institution. Now mind you he violated a scientific, fixed law, he has paid the penalty, but mark you, as long as that man lives on the face of this earth his life bears the scar of that penalty. He may go to the ends of the earth, he may change his name, he may change his occupation, but never, never, can he efface the scar that penalty leaves on his life.

You can apply this same principle to any phase of life and you get identically the same results. The facts are, you can take this same principle into vegetable life and by violations of fixed laws you get fixed penalties. Mr. Merchant, does not this present to you a phase of the retail business that possibly you have never considered before? It makes of the retail business a serious problem.

The trouble with you and I is when we see a condition existing in the retail business it is the effect. We forget that the thing we see is the effect and not the cause. We at once busy ourselves in trying to overcome it. We adopt premium schemes and plans and this and that, trying to overcome the thing we see, but all the time, down below the whole problem, is the cause, and it is grinding away day after day and night after night, producing a new batch of effects.

If the retail merchant before he had gone into the business had attended a school and been educated as a retail merchant, if he had been taught where to look for causes and what effects certain causes would produce, he would at once know where to look, and once he found the cause it would be remedied in a short time. The time will come when a young man wanting to enter the retail business will first attend a school and receive a technical education having to do with the business. Such a preparation will make it possible for the same man to, in five years’ time, get the practical experience that otherwise it would take him from twenty to forty years to get. Mr. Merchant, the trouble with you is you have “happened” into your business instead of going into it because you had taken an inventory of your qualifications and made up your mind that you were fitted for the business. Too many times men have gone into the retail business because they were looking for something “easy,” instead of sitting down calmly and deciding that they were by nature and by natural qualifications, fitted to make a success of the retail business.

Mr. Merchant, to-day you are practically the only man out of the whole realm of life who is not educated for his business before he goes into it. You are the “'tag end” of the whole procession when it comes to preparing for your calling. The doctor, the lawyer, the preacher, prepare for their professions. Your railroad lines, your electric lines, your factories are all laid out and planned and equipped and many times operated by men who have received a technical education fitting them for the things they are doing in life.

To-day the blacksmith finds that by attending certain schools he becomes a better blacksmith. The automobile builder does the same thing, and in many of our schools we find them instituting an agricultural department where boys and girls are taught the science of agriculture. In some schools, girls are taught the science of cooking. But show us the retail merchant who has attended a school to study the science of retailing. The time will come, Mr. Merchant, when you will study your business out of a text book. You will study your business out of a book just the same as Johnny studies his multiplication table out of a book. True, we will never be able to do away with the value of practical experience, but we can make the practical experience of more value by first laying a foundation for it.

The traveling man, the real one, today looks upon his calling as a profession and he studies his business out of a text book. He gets the basic principles involved in it. It makes no difference what you may sell, whether it be dry goods, or shoes, or clothing, or drugs, or whatever it may be, the basic principles involved in one are the same as those involved in the sale of any other thing.

One great trouble with the retail tail world is that we have gone to seed over the “buying end” of the business. Let me say to you that the buying end of your business is the least important one. It is not a question of buying goods to-day. Any fool with credit or money can buy goods, but the question is, “can he sell them at a profit ?” It is not uncommon to have a merchant put a couple of hundreds in his pocket, grab his night gown and start for market. He thinks nothing of spending two or three hundred dollars in going to market and buying goods, but have you heard of any of them spending a ten dollar bill to learn how to sell more goods : to learn how to get more profit out of his business.

The facts are nearly the whole problem in the retail business to-day is in the selling end of it. Factories can erect buildings, miles long, for the production of goods, but their problem, the same as yours, is the question of selling these goods at a profit. The traveling man comes to you and of course he talks “buying” to you. He emphasizes the “buying end” of your business, when in the very act of doing so, he himself is emphasizing the “selling end” of your business, and you merchants have not awakened to the fact that you are making the mistake when you argue with the traveling salesman over a few cents, when you are losing hundreds of dollars by not knowing the selling end of your business.

It is impossible to cover all the phases of the retail business in one article. And let me say to you, that what I am saying right here is not a question of theory, it is a question of having worked it out in actual practice. The facts are, instead of being a theorist, I have been on all sides of the counter, back of it, in front of it, on top of it, and even under it. I have come from a family of retail merchants, and in addition to this it has been my pleasure to come in touch with thousands of retail merchants of every part of America. Their problems have been presented in a way that any one with ordinary intelligence could not help but see what the problems involved are.

Now then, I want to take up this question of “retailing” on the installment plan and see whether or not we can apply this thing we call “science” to the different phases of the retail business. If we cannot, then we are on the wrong track, but if we can then it proves that the principles we are advocating are right.

First, let us discuss the buying end of your business. Let us see whether or not there are any scientific problems involved in it. The first I think of is the study of economics. I mean, know the financial conditions of the people of your community. As a good buyer it is your business to know the earning capacity of the people of your community. If you are in a community which is a manufacturing district, know what the salary list of these people has been for the last two or three years and then get some idea of what they are liable to be for the current year. If you are in an agricultural community, know in dollars and cents what the farmers of your community produced for the last three or four years, and then, if you can, get an idea of what the conditions are liable to be this year. You ask, “why is this necessary?” Simply this, let me say to you that every community and every individual has a buying capacity. I mean every community and every individual ought to spend a certain amount of their earnings for the luxuries and necessities of life. Don’t forget now about this buying capacity, because we will come back to it later on. Further, if any community or individual buys over or under this buying capacity, somebody pays the penalty, because here again you run into those same scientific, fixed laws which apply all along the way. The man who eats beefsteak instead of liver all the time is a better man for it. If he eats better food and wears better clothes and lives in a better house he is a better business man. You and I think more of ourselves and hold our heads higher when we have on a $30 suit of clothes than we do when we have on a $10 suit. You and I are better men and women when we ride in an automobile than when we ride in a wheelbarrow.

The community, or the individual, who buys over their capacity, when a stringency comes, when there is a strike or lockout, or whatever the conditions may be, pays the penalty through hardships of the family. They go beyond their means and these people find this fixed penalty being visited on them.

The individuals who under-buy their capacity find another penalty attached to them. Whenever the individuals pay less than they should for the necessities and luxuries of life, they become poorer citizens. They have a dwarfed citizenship or a dwarfed life. This is illustrated by a story of a young man, who in attending school found at the end of the term he was out of money. He got a job selling Bibles — fancy ones — out through the country. One day he stopped at the home of an old maid and he found in her home only one table and that an old rickety kitchen table. He found the floors were made of old boards with cracks between. There was no paper or paint on the walls. You can imagine what the place looked like. The young man sold her a Bible. Another young man delivered the Bible. After he had gone the old maid laid the Bible on her kitchen table. What a contrast— this would never do. The next time she went down town she bought a centre table, placed it in the middle of the floor and placed her Bible on it. That looked worse than ever, she had to buy a rug to cover up the cracks in the floor and then the walls had to be fixed up. The last we heard of her she had bought an automobile. Some times these things amuse us, but it shows the development which can be brought about to bring them up to the buying capacity, not only doing the individual a kindness but you have done the government a kindness by making a better citizen.

The average merchant buys because some good salesman comes along and talks him into it. He buys not because he has deliberately sat down and figured out what he was going to buy and then stuck to it. It is this very weakness of the average merchant that leads to so much over buying. We are safe in saying that ninety per cent, of the failures among retail merchants are caused by over buying. They either buy more than the people of the community can absorb or more than their capital can handle, both phases of over buying.

The next scientific principle we find involved in the buying of goods is that of “suggestion,” being able to say to the traveling salesman the thing you want him to do and then make him do it. You know, we all know, if we have had experience, that there are merchants who are continually getting a little better price, a little better discount, or some favor of this kind, that other merchants are not getting. Many and many a retail merchant is doing these things by handling the salesman just right, practising the science of suggestion, but he does not recognize the fact that he is doing so.

Mr. Merchant, there is no greater force in the retail world to-day than that of “suggestion,” being able to tell people the very thing you want them to do and then by suggestion make them do it. The facts are, you and I are creatures of suggestion. Every day of our lives we live by it, and in this article I want to give you some of the particular phases of suggestion as I have seen them in traveling around over the country. These are not things I have read out of books, but they are things I have seen with my own eyes.

One day a friend of mine in discussing suggestion, said he believed it was possible to talk “sour” so forcefully and so strenuously to a man that you could touch a lump of sugar to the man’s tongue and the nerves would report “sour” to the brain. These things can be done. I remember one evening in a northwestern city of speaking to a court room full of merchants and salespeople. The room was crowded full and when I was telling them what it was possible for one to do with suggestion. I noticed an old gentleman with a long beard sitting in front of me. I thought I would experiment. I leaned over the railing and I put the end of my finger near that man’s nose and talked “sour” with all my energy. In just a moment, to my astonishment, the old man’s face puckered up. What was he doing, tasting sour, and he was the only sour thing in the room. He was taking in that suggestion, he was doing the thing I suggested him to do. He was the living example of the power of “suggestion.”

We all have seen friends return from California and they have a regular ecstacy over the beauty of the country. They tell us of the wonderful beauty out there: they tell of the flowers being higher than the houses : they tell us it is the most beautiful place on the face of the earth, when the facts are there is no more God-forsaken country on the face of the earth than California, when we speak of it as a whole being beautiful. California has its good qualities, but the reason people see beauty when they go out there is because, for forty years, California in her advertising, has been telling us that these things exist and for us to come and see them, and we find the things we are told to look for. Take the advertising matter of the railroad companies running their trans-continental trains to the Pacific Coast. What kind of pictures do they use in these ads? Did you ever see them, in these advertisements, picture one of the awful dust storms they have in California? Did you ever see them picture one of the God-forsaken deserts out there? No, you don’t see these things. This is what you see, probably two shade trees with a hammock strung between the trees, and in the hammock is a young lady, either reading or fanning herself ; with a young man beside the hammock. What does the picture mean? Possibly it means a wedding for all we know, but it means idleness, contentment, ease, beauty, sunshine. It suggests all the things we expect or contemplate when we go on a vacation. Cannot you see what the person who designed that ad is getting at? They are simply suggesting to you and I the things they want us to contemplate when we come out there, because they know we will find the things we look for.

We have all been in railroad depots when trains were late, and we have seen some one grab their grip and start for the door, and every one goes along. Why? It is not because they heard a train, but they did it because the individual suggested a train was coming. Well do I remember of being in the Rock Island depot in Des Moines last February, when all trains were late. After waiting about two hours a gentleman suddenly grabbed his grip and started out the door for the platform. We all went out after him. When all had gotten out he turned to us with a sickly grin and walked back, and in a while he did the same thing again, and this man worked the same trick on us three times. When he did it the third time I walked to him and took him by the hand and told him “he was a dandy.” He was —he illustrated to us what could be done by suggestion.

As another illustration of what suggestion can do, I remember of being on the Chicago & Northwestern train in South Dakota. The news agent came in with a basket piled full of packages of cracker jack. He put the basket on the front seat, opened a package and then walked through the car distributing samples of his crackerjack. After he had sampled the crowd, he went back to the front end of the car and started to sell crackerjack. When he had gotten as far as the second seat, he stopped, looked to the back end of the car, raised his hand and then in a voice so every one could hear him, said, “Yes, don’t be in a hurry, I will be back there pretty soon.” He had only gotten to the third seat when he raised his hand and rather indignantly said, “Well, don’t be in such a hurry, I will be back there in a minute.” For the time I did not have sense enough to get next to what the fellow was doing. Three days after this I was on the same road and in comes the same news agent with his basket of cracker jack. He samples every one, just the same as he had done before. He started to sell his cracker jack and he got to that same second seat; he raised his hand and looked to the back of the car and says, “Yes, I will be back there.” I turned in my seat and looked to the back end of the car, and there was not a living soul saying anything about cracker jack. This young man was suggesting to the people in the front end of the car that everyone in the back of the car wanted to buy cracker jack. And he sold cracker jack.

Mr. Merchant, is it not true that you and I sit around and wonder what there is we can do to help business. We wonder what we can do to change conditions, and all about us are these things people are using day after day to bring success to them. The facts are, Mr. Merchant, success is an easy thing to attain. All you need to do is to appeal to human nature. Once you know how and then use it, success is yours. Let me say to you that human nature responds every time it is properly touched and it always responds in the same way. Human nature in the American Indian is just the same as human nature in the retail merchant. If our human natures were not all the same, it would be impossible for a national advertiser to so prepare his copy as to appeal to the people in all parts of the United States, or even the world. Let me go further and say, that once you and I know what these fixed principles governing business are ; what these fixed laws governing human nature are; once we-understand these, and then stick right by them, and never deviate, success is ours. Nothing can stop us. If it were possible to do this there would be no power on the face of the earth to keep us from being successes. It is no trick to sit down and figure two and put another figure two under it and multiply and get the answer four. We do it because mathematics is a fixed science, is a fixed scientific principle, and it will always produce the same results, and while of course the retail business is not a fixed science, yet the principles involved in it are so nearly fixed that generally speaking we can depend upon results by using given methods. Of course we would be foolish to say that the retail business was a fixed science because there is only one or two of such, but we are gradually working out the scientific problems involved in this thing until we have nearly a fixed science out of it.

Oh, merchants, the trouble is we don’t think enough; no, we do not think enough. Do you know that today the success muscle is not in your arms, that is not where success lies nowadays. The success muscle is up there in your brain. It is a question to-day of brain energy and not muscle energy. It is a question of thought, a question of brain action, instead of feet and legs action. You can hire men to work from their neck down for $1.50 a day, but try to hire a few to work from their neck up and see what you will pay them. Mr. Merchant, be a “neck-upper” instead of a “neck-downer.” Russia had bull strength enough that she could have taken every Jap and drowned them in the ocean one at a time, but she got beaten just the same, and to-day historians are writing that Russia was defeated because Japan had beat her at head work.

You merchants have no business with the broom and poker. You have no business in washing windows and doing the chores and waiting on trade. You can hire people for eight or ten dollars a week to do this work, and are you, by doing this work, going to confess to the world that your time is not worth any more than this? Your place is to be the brains of the business. It is your place to do the thinking and let some one else do the manual labor.

So many of you merchants think you have to work hard ; that you have to put in long days, that you have to wait on trade ; that you must spend long, long hours in your store. Say, brother, don't you know that to-day it is the man who spends the least number of hours at his desk who is drawing the biggest salary? Business management is a question of nervous force, and in order to drive your business you must husband that nervous force and you cannot do it by keeping your stores open until eight, nine or ten o'clock at night. You make the biggest mistake of your life when you do this thing. Look about you, the large merchant succeeds because his days are short and he has his nervous force, his thinking energy, with which to drive his business.*