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Remembering the Reason for the Season: A Salute to Retail Capitalism

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Now that the dawn of a new year is upon us, there could be no better time to sit back for a moment and reflect on what it is that truly gives the holiday season its meaning in modern American culture. While your neighborhood priest or minister would likely suggest that it is the birth of Jesus Christ, and he or she would not be wrong with regards to the most devout of their clergy, this is simply not the case for the vast majority of our country. No, the smiles spreading across the faces of both young and old on — for the most part — Christmas morning are derived solely from the reception of a material gift.

This, of course, is by no means a bad thing. When all is said and done, denying something so apparent would be, in my view, quite ridiculous. As someone who celebrates both Hanukkah and Christmas, I can safely say that shunning the religious significance associated with the most wonderful time of the year would be a terribly unfortunate thing to do and completely unnecessary in recognizing that retail capitalism is undoubtedly its lifeblood. For more insight on this undeclared national pastime, I recently spoke with Raymond Zimmerman, the former CEO of Service Merchandise. While what was once the United States’ most popular discount department store’s status as a bricks-and-mortar institution ceased in 2001, it remains in existence as an online enterprise, which Zimmerman currently heads.

When I asked him about his opinion on the defining factor in Service Merchandise’s spectacular success, there was no beating around the bush in his response that it was the “concept of (a) large assortment of brand name items at low prices and instant delivery.” Zimmerman also said that the changes which have occurred amongst retail companies over the last decade, such as semi-local businesses being absorbed by national ones, are, in essence, “good” because there is “still room for little competitors” as “someone new will come along with (a) unique concept” to rival the powers that be. Since Service Merchandise was a trail blazer in Internet sales during the mid-1990s, I inquired about his views on the future of both online and bricks-and-mortar department stores, specifically if he believed that the former would eventually overtake the latter. “Customers still like and want instant satisfaction,” Zimmerman replied. “(The) Internet will grow but so will b and m.” He felt it possible for the federal government to bolster commerce for retailers by working “with banks to lend money to small businesses rather than dry(ing) up (the) money supply by raising liquidy requirements.” Finally, I questioned about what ultimately led to Service Merchandise’s decline. He chalked it up to the “company need(ing) to change” and his managerial successors making “too many drastic changes too fast”.

In the story of Service Merchandise, both the zeniths and pitfalls of retail capitalism can be found. However, it bares a unique quality, one which is distinctly American in nature. While many of its counterparts have followed a similar path of originating as an outlet of sorts in a small town and growing to be a conglomerate whose presence can be felt virtually anywhere, Service Merchandise truly rose and fell on its own two feet unlike, say, Marshall Field’s (Which merged with Macy’s), Burdines (Which also merged with Macy’s), Hess’s (Which merged with The Bon-Ton), or numerous other now-defunct department stores. Even more interesting is that, after all the chips appeared to have fallen, it was revived by a member of its founding family. We should let Service Merchandise’s tale serve as a testament to all of the benefits which can be reaped through free enterprise, as well as an excellent reminder of, you guessed it, the reason for the season.

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About Joseph F. Cotto