Oldest known form of currency is the barter system that started in the 9000 BC.
Cows, animals, and poultry were treated as forms of exchange when currency didn’t exist. Barter system worked fine, but was not sustainable, making it difficult to store wealth.
Similar case with quantifying the value of goods, it was almost impractical until 3000BC, when Mesopotamia (modern day Iraq) Shakel was introduced, both as a unit of currency and unit of weight.
Fast forward to 800BC, Agora’s started ancient Greek marketplace where local artisans had their goods and services displayed for sale. For accounting purposes, Chinese abacus ‘Suanpan’ was introduced in 200BC.
Suanpan was 20cm long with seven rods with two beads in the upper row and five in the lower. Modern-day multiplication, addition, division, subtraction, square and cube roots have been derived from the Suanpan.
This accounting technique continued until the first cash register was invented by James Ritty, in 1883. James was the owner of the saloon in Dayton, Ohio, USA and wanted a place to store cash to prevent employee theft. In 1878 on a ship back from Europe, Ritty noticed a machine that counted the number of times the ship’s propeller completed a revolution, he took that as an inspiration and patented the Ritty Model 1 along with his brother John in 1883.
It was called “Ritty’s Incorruptible Cashier”.
The original model, however, did not have a cash drawer, it simply recorded the sales noting the amounts for each. James tried manufacturing the cashier and wanted to build cash register’s business but had no luck, he finally sold his register to a group of Ohio investors.
It was John H. Patterson, who eventually turned this into a fortune, forming the National Cash Register Company, today’s NCR, a leader in Point-of-Sale(POS) solutions, which today is valued at $5 billion. Every service department in their company had the slogan “We Cannot Afford To Have A Single Dissatisfied Customer”
Between 1843 and 1855, gentleman names Rowland Hussey Macy opened four retail dry good stores, all of which have failed. So he moved to NYC in 1848 and established “R.H.Macy & Co” on 6th Avenue between 13th and 14th streets. First day sales on Oct 28th, 1858 totaled $11.28. Macy’s logo included a star, which comes from a tattoo that Macy got as a teenager, working on a Nantucket whaling ship, the Emily Morgan.
The business grew and they kept expanding with more stores and started attracting customers with Santa Claus themed exhibits and cash savings offers with a money back guarantee. In 1902, the flagship store moved to 34th Herald Square, which eventually occupying the entire block on the seventh avenue at 2.2 million square feet.
As of 2016, it was 115 years old, making the world’s second largest departmental store. Their thanksgiving parade attracted over 10,000 people in 1924.
In 1879, Great Atlantic Pacific Tea company was a grocery only retailer founded by George Huntington Hartford and George Gilman in New York City. The company started as a tea company selling tea by post mail in Lower Manhattan that grew into a big famous brand.
They purchased directly from Chinese plantations, operating 67 stores by 1876. Until 1976, it was the largest retailer of any kind and from 1915-1976, it was the largest food and grocery retailer in the US. It was an American icon, and the Wall Street Journal called it the “Walmart before Walmart”.
In 1909, Harry Gordon Selfridge, an American, founded a London based departmental store, Selfridges. Their flagship store on Oxford Street. which was toured as “London’s greatest store”. One of the early successes for Selfridges came from their innovating marketing techniques, they made shopping fun and adventurous, and not another boring routine.
He soon realized that shopping was a social experience, and had high-end merchandise displayed for women in an exclusive space so they could safely try them out and indulge with each other. Adding displays of educational and scientific exhibits made the store become a hub for the social and cultural phenomenon. Next twenty years, Selfridges became a retail magnate known as the ‘Earl of Oxford’. He is also known to have created the slogan “The customer is always right”.
Selfridges maintained strong ties with the media and advertisement industry to ensure the megastore opening was widely publicized in newspapers, magazines, and journals. His opening week cartoons were a big hit. One of the aspects, current day retailers could borrow from self-ridges is providing personalization at an individual customer level. The absence of price tags and referring to visitors as “guests” tells us that Selfridges was more about selling the whole lifestyle than mere products.
When the Titanic sunk in 1912, a lot of the then wealthy, influential and elite had lost their lives. Amongst them, were Macy’s co-owner, Isidor Strauss and his wife Ida. When the ship had hit the iceberg, Ida reportedly said “I will not be separated from my husband. As we have lived, so will we die, together.” So, the couple sat on the deck holding each other until the last moment.
The 1920s was a very interesting decade for American history, because of the credit bubble. Consumers started to purchase more than they could afford, and the ‘charge card’ was introduced as a convenient instrument for people who used to visit banks often to draw cash. In 1929, it was also rumored that Safeway would merge with Kroger.
Safeway was founded in 1915, by Marion Barion Skaggs who purchased his father’s grocery store in Idaho for $1089. With the help of his five brothers, Skaggs handles two different businesses: Skaggs Cash Stores and Skaggs United Store. By 1926, he had 428 stores in 10 states.
The same year, Charles E. Merril, the founder of Merrill Lynch, saw an opportunity for consolidation and purchased 322 Safeway stores from W.R.H.Welson, who was looking for an exit strategy to get into the wholesale business.
On July 1st, 1926, Safeway merged with 673 Skaggs united stores and Skaggs cash stores of California. It was listed on the New York Stock Exchange in 1927, with an initial public offering of $226.
The philosophy behind the name was that grocery model worked on a cash and carry basis, no credit was offered as other grocers had done. It was a “safe way” to buy during the Great Depression as the family could not get into debt. In 1930, Safeway was the first to introduce “sell by” date on nutritional labeling and perishables.
Kroger started in 1883 by Barney Kroger, who invested his life savings of $372 to open a grocery store at 66 Pearl Street in downtown Cincinnati. In 1929, it was the first time in the history where they all groceries, perishables and fresh produce under one roof. It was also rumored that Safeway would merge with Kroger.
Kroger was also the first grocer to monitor the food quality, testing the perishables offered to customers, and the first to have parking lots on all four sides.
1930 was when the first shopping mall ‘Highland Parkland’ opened in Dallas. Minimum labor wages were introduced at 25cents per hour. Then in 1946, 7 Eleven invented extended retail hours, open from 7am to 11pm. South dale center in Edina, Minnesota opened in 1956, one of the oldest and temperature controlled malls. It had 1,300,000 sq.ft. of leasable retail space with 123 retail tenants.
In 1945, a former J.C. Penney, employee purchased a branch of Ben Franklin stores from the Butler brothers. His primary focus was to sell lower priced products at high volumes at a lower profit margin, serving the bottom of the pyramid. Little did he know that he would redefine the entire country’s shopping experience.
When his leases and branch purchases went higher, he found lower-cost suppliers than those used by other stores. The savings were passed onto the product pricing. The store’s sales increased to $105,000 in his first year of taking over, $140,000 next year and $170,000 the year after.
The business generated $250,000 in its fifth year, and with lease renewal issues he opened a new store at 105 N.Main Street in Bentonville, naming it “Walton’s Five and Dime” which today is the Wal-Mart museum.
Sam Walton’s story of Wal-Mart is a very inspiring case of the great American dream.
Wal-Mart today operates 11,566 stores in 28 countries, under 63 banners with 2016 revenue of $482.13 billion dollars. According to Forbes Global 500, it is still the largest company by revenue and the largest private employer with 2.2 million employees.
Sam Walton’s heirs own 50% of the company through their holding enterprises, Walton Enterprises, and individual holdings. The Wal-Mart museum still has his iconic red Ford Truck, displaying the values of his true humility.
eCommerce pioneered in 1995 when Amazon was established and Jeff Bezos sold his first book online. In 1999, internet shopping continued to grow, with many brick and motor brands doubling their online revenues. At this point, internet retail market was just begun to warm up, estimated around $20 billion.
Jack Ma, the founder of Alibaba, also established his business the same year in China. Alibaba started off as selling goods and services with web portals. Ma, first learned about internet in 1994, during his trip to the USA, he tried entering the word ‘beer’ and lots of articles came up. Then he typed ‘China’ and nothing came up.
And that has been his ‘Aha’ moment, which motivated him to build a simple website in the morning, and by noon he had emails from China wishing to learn more about him. Ma immediately started building websites for Chinese companies, managed to raise $20,000 along with his friend and wife and started their first company ‘China Yellow Pages’.
By year 3, they were making $800,000 USD. The very next year, he went on to head an IT company established by the China International Electronic Commerce Center(CIECC), a government arm operating under the People Republic of China. And in 1999, he quit that to start Alibaba.
He started pitching his vision to build a China-based B2B marketplace to 18 of his friends at his apartment. After that, he raised venture round of 500,000 Chinese Yuan.
By Jan 2000, he attracted foreign investments nearing $25 million USD, with an intent to build a domestic e-Commerce platform for SMBs (Small and Medium-Sized Businesses) to address gaps in global trade.
And the rest is history, by 2010 they announced the $25 billion record-breaking initial public offering.
He also made the statement with CNBC “Today what we got is not money. What we got is the trust from the people”.