How Brands Were Born: A Brief History of Fmcg products in Marketing today.
The History and Evolution of Retail Stores: From Unbranded and Personal Designer to fmcg brands and standalone Shops
For nearly as long as people have existed, they have been sharing, bartering, selling, and consuming resources.
In the History of commerce .
People exchanged cows and sheep in trade as far back as 9000 BC. The first proper currency extends as far back as 3000 BC in Mesopotamia.
The first retail stores take up the mantle a bit further down the line. By 800 BC in ancient Greece, people had developed markets with merchants selling their wares in the weekly fair in the city center.
Flash forward a couple thousand years and we have our modern mammoths: retail giants like Walmart, Max Hyper,D Mart Lulu Mall,Metro C&C and Target.
But what happened in between?
In this deep dive, we’re investigating the evolution of retail and retail shopping in America. We’ll focus primarily on the post-Industrial Revolution era when retail really took off, all the way up to the Digital Revolution and the game changer that is ecommerce.
What is Retail?
First things first. What do we mean when we say retail?
At its simplest definition, retail is the sale of different goods and services to customers with the intention to make a profit.
Retail includes selling through different channels, so items purchased in store and those purchased online both apply.
The definition of retail is expansive enough that it includes the traveling merchants of antiquity all the way to sprawling shopping malls, big-box stores and ecommerce platforms.
Let’s consider how various points on the retail timeline have affected what retail has become, how people shop, and what customers expect today.
The History and Evolution of Retail Stores
We’ve already looked at some of the earliest history of retail — covering hundreds of years of bartering and peddling in a single bound.
However, now let’s look at some (relatively) more recent retail history, how it impacts what we buy and sell, and how we behave today.
1. Mom and Pops: 1700s–1800s.
A “mom and pop” store is a colloquial phrase for a small, family-owned, independent business.
In the 18th and 19th centuries, and particularly by the 1880s, these stores were plentiful throughout the world. Many of these stores were drug stores or general stores selling everything from groceries and fabrics to toys and tools. People during this time were also expanding settlement across the country and creating new towns. It was not uncommon for each town to have a mom and pop store offering general merchandise that could be purchased for daily life.
While these community-anchoring, catch-all stores are less common, family-owned businesses are still out there. Of the nearly 30 million small businesses in the world, 19% are family owned and 1.2 million are run by a married couple.
Today, there is something of a generational divide in how people like to shop. Of Baby Boomers who grew up with brick-and-mortar as their default, 72% primarily shop in-store. This is in contrast to Millennials, 67% of whom shop in online stores.
2. Department stores arrive: Mid 1800s – Early 1900s.
The pioneering spirit of people moving west and both opening and shopping at local general stores evolved as the fmcg consymer moved into the 20th century.
These institutions became fixtures of influencing lifestyles.
- what people bought,
- how they furnished their homes, and
- what luxuries they felt they needed.
The stores didn’t just sell items. They also provided demonstrations, lectures, and entertainment events that appealed to newly wealthy customers looking for how best to use their disposable income.
Today people are still looking for content and experiences as part of their shopping activities that can help influence what they buy.
3. Cha-Ching: 1883.
The first cash register was invented by James Ritty in 1883. Ritty was a saloon keeper in Ohio and nicknamed the invention the “incorruptible cashier.” The machine used metal taps and simple mechanics to record sales. A bell sounded when a sale was completed, leading to the phrase “ringing up” — which we still use today.
This invention went on to spark the ease of customer checkout for over a century, as it was quickly adopted for retail sales.
Prior to this, many businesses had trouble keeping track of their accounting and often didn’t know if they were operating at a profit or a loss. Over time, advances in cash registers have worked to make them more resistant to theft.
Later POS (point of sale) systems have advanced the cash register industry even further by providing computerized cash registers that can keep track of inventory, process credit cards, and provide multiple connected touch-screen terminals in addition to helping to manage profit margins.
As customers are shopping more omnichannel than ever — including shopping from the same merchants both online and in-store — businesses are also seeking methods to combine POS systems and payment gateways so they can keep track of inventory across channels.
4. Credit takes a hold: 1920s.
Just as it’s hard to imagine a store without a cash register, it’s equally hard for many to imagine a time when paying in cash was still king.
In the 1920s, credit cards or “charge cards” began to take hold of the American shopper. However, these early cards were usually issued by hotels or individual businesses and could only be used within their companies. The first universal credit card that could be used at multiple establishment was the Diners Club card in 1950.
The first bank-run credit card was started by Bank of America in 1958. Unlike today, a credit card’s main use was so people didn’t have to travel to a bank and withdraw money to shop. Today it is far more of a bookkeeping/convenience use.
Credit cards are also now much more likely to carry debt as consumers use them to make up for budget shortfalls. According to the Federal Reserve, Americans now have a record $1.09 trillion in credit card debt.
5. Shopping malls: 1950s.
As touched on in the introduction, the concept of malls as central locations where customers can visit multiple merchants has been around since the agoras of Ancient Greece. However, our more modern concept of malls — as physically built shops connected in one location with communal facilities — began in the 20th century.
The first shopping mall was technically an outdoor shopping plaza that opened in 1922 in Kansas City. However, the first indoor shopping mall that mirrored how we think of malls today was opened in 1956 in Edina, Minnesota. Malls were often anchored by a large department store with a cluster of other stores around it.
The growth of these shopping centers was correlated with the growth of automobiles. With cars available to the masses, more people were leaving cities and commuting from the suburbs.
The mall was envisioned as a cultural and social center where people could come together and not only do their shopping but also make an activity of it. By 1960, there were more than 4,500 malls accounting for 14% of all retail sales.
6. Big Box is in: 1960s.
The very first Walmart in Rogers, Arkansas.
While people loved malls for the social aspect and enjoyment of window shopping and moving from store to store, there was also a renewed interest in a return to the one-stop-shop. However, unlike the mom and pop general stores of old, these large stores served bigger populations and provided items cheaply at a much bigger scale.
In 1962 the first Walmart opened its doors in Rogers, Arkansas. Target and Kmart also opened their first stores that same year.
The efficiency and overall size of these indoor giants made them attractive to consumers looking for convenience and friction-free, no frills service. Unlike the department stores of early in the century that provided personalized service and attended to customers’ needs, these large retailers were more focused on self service and providing efficiency.
At these big box stores, customers could find the consumer goods they needed, and at much lower prices. This was made possible by changes in the laws after World War II that paved the way for discount retailing.
Which brands did exist in India before its independence?
The story of India’s favorite biscuit – Parle-G.
Mohanlal Dayal started a tailoring shop at the age of 18 in Mumbai. When his sons joined the business, they started exploring confectionary Mohanlal traveled to Germany to learn the techniques involved in making confectionary In 1928, Mohanlal Dayal founded the ‘House of Parle’. It was named after the suburb it was located in – Vile Parle.
The first factory and initial machinery were set up in 19296/ They initially started by producing sweets, peppermints, and toffees made of glucose, pure sugar, and milk. House of Parle employed 12 family members initially – all of them taking care of the engineering, manufacturing, and packaging the products.
Parle Orange Bite was one of their first products. Biscuits were a premium product back then and were mostly consumed by Britishers and upper-class Indians. Parle produced their first biscuit in 1938 – Parle Gluco.Since it was very affordable and accessible, it quickly became a hit among Indians.
Parle Gluco was made of the masses. It was India’s answer to the British-branded biscuits During World War II, it became a go-to biscuit for the British-Indian army. In the early 1940s, Parle also produced India’s first salted cracker – Monaco.
After the Partition in 1947, Parle had to stop production of Parle Gluco due to the shortage of Wheat – one of their main ingredients. For the time being, they start producing and selling biscuits made out of Barley.
By the late 1940s, Parle had created the world’s longest oven at the time – 250 ft long. Over the years, more and more brands started entering the market with ‘Gluco’ or ‘Glucose’ in their names. Britannia came up with their brand of glucose biscuits called ‘Glucose D’.
To keep up their sales and stand out in the market, Parle Gluco changed its name to ‘Parle-G’ in the 80s, introduced it in a new package with white and yellow stripes, and the illustration of ‘Parle-G Girl’ – or the package design that we know of, today.
There are multiple stories about who the Parle-G girl is. It was recently clarified that the featured Parle-G girl was just an illustration done by Everest Creative’s artist Maganlal Daiya in the 60s. A result of his imagination.
In 1982, Parle also launched their first TV commercial on Doordarshan for Parle-G with the tagline “Swaad Bhare, Shakti Bhare, Parle-G”.In 1998, Parle convinced people’s favorite superhero at the time – Shatkimaan to do a commercial for Parle-G.
Originally, the “G” in Parle-G stood for “Glucose” which was later changed to “Genius” in the early 2000s. As of 2009-10 data, the volume sales of Parle-G were bigger than the combined sales of all biscuits brands in China – the 4th largest biscuit-consuming country in the world.
By 2011, Parle-G had become the largest-selling biscuit brand in the world according to a Nielsen report.
In 2013, Parle-G launched its ‘Kal ke Genius’ campaign. Gulzar wrote the lines for the campaign as Piyush Mishra added his voice. In 2013, Parle-G also became India’s first FMCG brand to cross the Rs. 5000 Cr mark in retail sales.
The recent COVID-19 lockdown contributed to the parent company and increased its market share by 5%. 80-90% of that growth was a result of Parle-G sales. In 2019, Parle-G was #29 on the ‘Food & Beverages’ category of TRA’s Brand Trust Report India.
Today, Parle-G has more than 130 factories and is present in more than 5 million retail stores across India. Parle-G produces more than a Billion packets of biscuits every month.
Parle-G is available even in the most remote parts of India today – where no other biscuits are available. Truly, meant for the masses.
Some big companies are proof of it which not only survived the ups and downs of the country’s history, but have also thrived despite all odds.
Bennett Coleman & Co. Ltd
Started in 1938.
Also known as The Times Group is India’s largest media conglomerate, according to Financial Times as of March 2015.
Started in 1884.
Founded by SK Burman, a physician in West Bengal, it is India’s largest Ayurvedic medicine & related products manufacturer with Revenues of over Rs 7,073 crore & Market Capitalisation of $5 Billion.
Started in 1892.
Britannia Industries Limited is an Indian food-products corporation based in Bangalore, India with an estimated market share of 38%.
Godrej & Boyce
Started in 1897.
Managed and largely owned by the Godrej family leading name in its field.
Started in 1907.
Tata Steel is a top ten global steel maker and the world’s second most geographically diversified steel producer, a subsidiary of the Tata Group.
Started in 1910.
Started as Imperial Tobacco Company of India Limited, the company was rechristened I.T.C. Limited in 1974.
ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal.
Started in 1911.
TVS was established by Thirukkurungudi Vengaram Sundaram Iyengar.
TVS Motor Company is the third largest two-wheeler manufacturer in India, with a revenue of Rs.11,516 Cr in 2015-16. It is the flagship company of the Rs. 40,000 Cr TVS Group.
Started in 1929.
World’s largest selling biscuit brand, Parle G was established in Vile Parle Mumbai in 1929. They began manufacturing biscuits in 1939. In 2013, it was the first Indian FMCG brand to cross the INR 5000 crore mark.
It has stopped to manufacture biscuits now but Parle is a big brand.
Started in 1910.
Castrol India is the largest manufacturer of automotive and industrial lubricants in the Indian lubricant market.
Started in 1907.
It all started as soda fountain in 1907 by Vadilal Gandhi and today is said to be the second largest ice-cream player in India.
In the initial days, Vadilal would make ice cream with a hand-operated machine.
The Birla Group
Started in 1857.
The Birla business group was founded by Seth Shivnarayan Birla.
Currently, they have presence in 33 countries and provide employment to 1,36,00 people. They are the third largest Indian company in private sector with net revenue of $40 billion.
The Mahindra Group
Started in 1945.
Brothers J.C Mahindra and K.C Mahindra along with Malik Ghulam Mohmad started a business to trade steel.
Later the company was known as Mahindra and Mahindra. Currently, they have $15.9billion revenue and employ 1, 55,000 people.
Started in 1925.
Raymond mill was set up in Thane to produce woolen blankets.
Currently one of the leading fashion retailers and fabric manufacturers of India with revenue of $210 million.
Way back in the early 1950s, an economic survey of spending in India revealed that Indian women were splurging on imported cosmetics. Nehru was not very happy because it was affecting the forex reserves. Nehru hit upon the idea of a home grown beauty brand which would cater to cosmetic needs of Indian women.
Lakme was started in 1952 as a 100% subsidiary of Tata oil mill. It was a hugely successful brand and the rest is history. In 1996, Tata sold its stake in Lakme to HLL since it felt that HLL being an FMCG company will do better justice to the company and HLL have continued to efficiently nurture the brainchild of JRD. A recent survey ranked Lakme topmost amongst 50 most trusted brands in India.
Started in 1902.
Shalimar Paints BSE: 509874 is an Indian paints manufacturing company. The company is engaged in manufacturing and marketing of decorative paints and industrial coatings.
Punjab National Bank
Founded in 1894.
Punjab National Bank is an Indian multinational banking and financial services company. It is a state-owned corporation based in New Delhi, India. The bank has over 6,968 branches and over 9,935 ATMs across 764 cities.
Other banks like
Allahabad bank founded in 1865.
& SBI founded in 1806 as Bank Of Calcutta.
Cherry on the Cake -:
These all brands are Indian originated or Indian based.
A Brief History of Consumer Culture
Between 1950 and 1980, there was limited investment in the FMCG sector. Local people had lower purchasing power, which meant that people opted for necessity products rather than premium products. Indian government was inclined towards favouring the local shops and retailers. Between 1980 and 1990, people wanted more variety of products which encouraged FMCG companies to increase the availability of products. FMCG Industry started getting traction and other companies started entering the industry. Media industry in India also boomed during the same time which gave new companies even more incentive to make their business profitable. Prior to 1991, when globalisation and liberalisation occurred in India, western apparels and foreign food products were not available to local customers. Common people weren’t very aware of brand recognition. After 1991, FMCG industry was inspired by the international companies which also allowed government intervention to incentivise foreign FMCG companies to operate in India.
The notion of human beings as consumers first took shape before World War I, but became commonplace in America in the 1920s. Consumption is now frequently seen as our principal role in the world.
People, of course, have always “consumed” the necessities of life — food, shelter, clothing — and have always had to work to get them or have others work for them, but there was little economic motive for increased consumption among the mass of people before the 20th century.
Quite the reverse: Frugality and thrift were more appropriate to situations where survival rations were not guaranteed. Attempts to promote new fashions, harness the “propulsive power of envy,” and boost sales multiplied in Britain in the late 18th century. Here began the “slow unleashing of the acquisitive instincts,” write historians Neil McKendrick, John Brewer, and J.H. Plumb in their influential book on the commercialization of 18th-century England, when the pursuit of opulence and display first extended beyond the very rich.
“The cardinal features of this culture were acquisition and consumption as the means of achieving happiness; the cult of the new; the democratization of desire; and money value as the predominant measure of all value in society,” Leach writes in his 1993 book “Land of Desire: Merchants, Power, and the Rise of a New American Culture.” Significantly, it was individual desire that was democratized, rather than wealth or political and economic power.
The 1920s: “The New Economic Gospel of Consumption”
In 1930 the U.S. cereal manufacturer Kellogg adopted a six-hour shift to help accommodate unemployed workers, and other forms of work-sharing became more widespread. Although the shorter workweek appealed to Kellogg’s workers, the company, after reverting to longer hours during World War II, was reluctant to renew the six-hour shift in 1945. Workers voted for it by three-to-one in both 1945 and 1946, suggesting that, at the time, they still found life in their communities more attractive than consumer goods. This was particularly true of women. Kellogg, however, gradually overcame the resistance of its workers and whittled away at the short shifts until the last of them were abolished in 1985.
Mass production is profitable only if its rhythm can be maintained—that is if it can continue to sell its product in steady or increasing quantity.… Today supply must actively seek to create its corresponding demand … [and]cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda … to assure itself the continuous demand which alone will make its costly plant profitable.
President Herbert Hoover’s 1929 Committee on Recent Economic Changes welcomed the demonstration “on a grand scale [of]the expansibility of human wants and desires,” hailed an “almost insatiable appetite for goods and services,” and envisaged “a boundless field before us … new wants that make way endlessly for newer wants, as fast as they are satisfied.” In this paradigm, people are encouraged to board an escalator of desires (a stairway to heaven, perhaps) and progressively ascend to what were once the luxuries of the affluent.
Charles Kettering, general director of General Motors Research Laboratories, equated such perpetual change with progress. In a 1929 article called “Keep the Consumer Dissatisfied,” he stated that “there is no place anyone can sit and rest in an industrial situation. It is a question of change, change all the time — and it is always going to be that way because the world only goes along one road, the road of progress.” These views parallel political economist Joseph Schumpeter’s later characterization of capitalism as “creative destruction”:
Capitalism, then, is by nature a form or method of economic change and not only never is, but never can be stationary.… The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.
The prospect of ever-extendable consumer desire, characterized as “progress,” promised a new way forward for modern manufacture, a means to perpetuate economic growth. Progress was about the endless replacement of old needs with new, old products with new. Notions of meeting everyone’s needs with an adequate level of production did not feature.
The nonsettler European colonies were not regarded as viable venues for these new markets, since centuries of exploitation and impoverishment meant that few people there were able to pay. In the 1920s, the target consumer market to be nourished lay at home in the industrialized world. There, especially in the United States, consumption continued to expand through the 1920s, though truncated by the Great Depression of 1929.
Electrification was crucial for the consumption of the new types of durable items, and the fraction of U.S. households with electricity connected nearly doubled between 1921 and 1929, from 35 percent to 68 percent; a rapid proliferation of radios, vacuum cleaners, and refrigerators followed. Motor car registration rose from eight million in 1920 to more than 28 million by 1929. The introduction of time payment arrangements facilitated the extension of such buying further and further down the economic ladder. In Australia, too, the trend could be observed; there, however, the base was tiny, and even though car ownership multiplied nearly fivefold in the eight years to 1929, few working-class households possessed cars or large appliances before 1945.
This first wave of consumerism was short-lived. Predicated on debt, it took place in an economy mired in speculation and risky borrowing. U.S. consumer credit rose to $7 billion in the 1920s, with banks engaged in reckless lending of all kinds. Indeed, though a lot less in gross terms than the burden of debt in the United States in late 2008, which Sydney economist Steve Keen has described as “the biggest load of unsuccessful gambling in history,” the debt of the 1920s was very large, over 200 percent of the GDP of the time. In both eras, borrowed money bought unprecedented quantities of material goods on time payment and (these days) credit cards. The 1920s bonanza collapsed suddenly and catastrophically. In 2008, a similar unraveling began; its implications still remain unknown. In the case of the Great Depression of the 1930s, a war economy followed, so it was almost 20 years before mass consumption resumed any role in economic life — or in the way the economy was conceived.
History of Consumer Industry
All of us are consumers, from cradle to grave, to be more precise, from the womb to grave or cremation. In a sense, the history of the consumer is the history of mankind. Consumers are the largest economic group in any country. They are the central point of all of our economic activities. But the very same consumers ate the most voiceless group also. The nature of consumer in terms of needs, consumption patterns, and problems has been changing and evolving along with the social and economic development in the course of history.
The consumer in the Early Ages
The history of the consumer in the sense of one who consumes anything may be said to have started with the history of mankind.
In pre-historic times, humans gathered food and other necessities from nature directly. As years passed they started producing/ preparing their food and other articles from naturally available materials.
Thus production was for self-consumption and for immediate dependents. The man was both a producer and a consumer at one and at the same time.
Therefore, there were no problems related to the sale and purchase of goods. With the passage of time, the needs of men and women increased and became varied. What they produced also left a surplus.
Also, they needed to stay in one place to look after their produce. Gradually individuals realized that they were not capable of producing on their own everything they needed.
So they began socializing and started mutual dependence. This led to group living which resulted in the sharing of responsibilities with others and exchanging individual products with that of others, to fulfill varied needs.
Thus, the system of Barter is the exchange of goods for goods. With time there arose the need to establish the equivalence of goods according to their value.
The Industrial Revolution which started in England in the late 18th century and spread to Western Europe in the early I9th century brought about unprecedented changes in the lifestyle of people.
The fast pace of progress in science and technology and the consequent mechanization of production led to mass production of goods.
This, in turn, required marketing of goods that have been produced and drew a clear line of distinction between the producer and consumer.
Barter gradually gave way to money as a medium of exchange.
Coins and paper currency came to be used for the purchase of goods and hiring services.
The emergence of standards for goods and Weights and Measures or the sale of goods was logical outcomes in the process.
Issues regarding the choice of goods, availability of essential items, profit-making, etc. became important soon after industrialization also brought in its wake a number of effects that completely changed the face of the market and the consumer environment. The markets offered a huge variety of goods for consumers to have their choice. At the same time, consumers were subjected to all kinds of selling pressures and persuasive methods of sales promotion by competing producers and sellers. The modern-day concept of the consumer as buyer and user of goods from the market may thus be said to have emerged from industrialization. This has also given rise to what is called Consumerism.
Advent of Consumerism
The term consumerism refers to the hidden range of activities of government, business, and independent organizations that are designed to protect individuals from policies that infringe upon their rights as consumers. Since the introduction of modern technology and growth or large scale enterprises, mass production and distribution of goods and services have contributed to making business activities more competitive and highly complex. Hence, their regulation and control have increasingly become more important. The following factors may be said to have contributed to the growth of consumerism:
- The spread of education and knowledge
- Rising incomes have increased the purchasing power of people
- An attitude to expect better quality
- A large variety of products
- Complex features introduced by new technology
Consumers in the Modern Age
Thanks to the Industrial Revolution, multiple varieties of goods are produced and marketed today. An average consumer is exposed to varieties of manufactured goods in the market place. To a certain extent, the sales promotion techniques adopted by sellers influence the buyer’s decisions. Not only in respect of goods, but today’s consumer is increasingly dependent also on common utility services like electricity and water supply, transport, communication, banking, insurance, hospitals, etc. Those who are producers also need services both for their private use as well as for production purposes. Similarly, providers of services depend on producers to have the means necessary for providing services. For example, producers of trucks and buses require electric power, communication, system, water supply, etc. On the other hand, providers of transport services require buses, trucks, cars, etc. which are manufactured by producers.
Evolution of Consumer
In a way, today’s consumer combines the role of the producer as well as the consumer and may be called a “Prosumer”. A doctor renders medical service to a restaurant owner but for his refreshments, he becomes a consumer in that very restaurant. A textile shop keeper sells cloth but is also a consumer of other goods and services. Thus, today most people are prosumers i.e., producer and consumer rolled into one. All professionals are service givers and consumers too.
As most of us are both consumers and professional service providers, a dichotomy prevails in us. As consumers, our expectations from the sellers of goods and professionals are different from our position as sellers or service givers in relation to buying consumers. It is largely because of lack of awareness of this dichotomy that we often alienate ourselves from the very environment which should give us security and protect us from exploitation. We expect the marketer to be accountable without subjecting our own role as a service or good provider to scrutiny. Unless we become aware that the concept of the pure consumer is of limited validity, it may be difficult to orient ourselves towards efficiency and quality in goods and services.
Over the course of the 20th Century, capitalism moulded the ordinary person into a consumer. Kerryn Higgs traces the historical roots of the world’s unquenchable thirst for more stuff.
The notion of human beings as consumers first took shape before World War One, but became commonplace in America in the 1920s. Consumption is now frequently seen as our principal role in the world.
People, of course, have always “consumed” the necessities of life – food, shelter, clothing – and have always had to work to get them or have others work for them, but there was little economic motive for increased consumption among the mass of people before the 20th Century.
Quite the reverse: frugality and thrift were more appropriate to situations where survival rations were not guaranteed. Attempts to promote new fashions, harness the “propulsive power of envy,” and boost sales multiplied in Britain in the late 18th Century. Here began the “slow unleashing of the acquisitive instincts,” write historians Neil McKendrick, John Brewer, and J H Plumb in their influential book on the commercialisation of 18th-Century England, when the pursuit of opulence and display first extended beyond the very rich.
But, while poorer people might have acquired a very few useful household items – a skillet, perhaps, or an iron pot – the sumptuous clothing, furniture, and pottery of the era were still confined to a very small population
At first, consumer goods were more likely to supply basic needs rather than luxury items (Credit: Getty Images)
In late 19th-Century Britain a variety of foods became accessible to the average person, who would previously have lived on bread and potatoes – consumption beyond mere subsistence. This improvement in food variety did not extend durable items to the mass of people, however. The proliferating shops and department stores of that period served only a restricted population of urban middle-class people in Europe, but the display of tempting products in shops in daily public view was greatly extended – and display was a key element in the fostering of fashion and envy.
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Although the period after World War Two is often identified as the beginning of the immense eruption of consumption across the industrialised world, the historian William Leach locates its roots in the United States around the turn of the century.
In the US, existing shops were rapidly extended through the 1890s, mail-order shopping surged, and the new century saw massive multi-storey department stores covering millions of acres of selling space. Retailing was already passing decisively from small shopkeepers to corporate giants who had access to investment bankers and drew on assembly-line production of commodities, powered by fossil fuels. The traditional objective of making products for their self-evident usefulness was displaced by the goal of profit and the need for a machinery of enticement.
“The cardinal features of this culture were acquisition and consumption as the means of achieving happiness; the cult of the new; the democratisation of desire; and money value as the predominant measure of all value in society,” Leach writes in his 1993 book “Land of Desire: Merchants, Power, and the Rise of a New American Culture”. Significantly, it was individual desire that was democratised, rather than wealth or political and economic power.
The glove section at an early department store, which changed the way people shopped (Credit: Getty Images)
Release from the perils of famine and premature starvation was in place for most people in the industrialised world soon after WWI ended. US production was more than 12 times greater in 1920 than in 1860, while the population over the same period had increased by only a factor of three, suggesting just how much additional wealth was theoretically available. The labour struggles of the 19th Century had, without jeopardising the burgeoning productivity, gradually eroded the seven-day week of 14- and 16-hour days that was worked at the beginning of the Industrial Revolution in England. In the US in particular, economic growth had succeeded in providing basic security to the great majority of an entire population.
It would be feasible to reduce hours of work and release workers for the pleasurable activities of free time… but business did not support such a trajectory
In these circumstances, there was a social choice to be made. A steady-state economy capable of meeting the basic needs of all, foreshadowed by philosopher and political economist John Stuart Mill as the stationary state, seemed well within reach and, in Mill’s words, likely to be an improvement on “the trampling, crushing, elbowing and treading on each other’s heels … the disagreeable symptoms of one of the phases of industrial progress”. It would be feasible to reduce hours of work further and release workers for the spiritual and pleasurable activities of free time with families and communities, and creative or educational pursuits. But business did not support such a trajectory, and it was not until the Great Depression that hours were reduced, in response to overwhelming levels of unemployment.
In 1930, Kellogg adopted a six-hour shift to help accommodate unemployed workers. It didn’t last long (Credit: Wikipedia)
In 1930, the US cereal manufacturer Kellogg adopted a six-hour shift to help accommodate unemployed workers, and other forms of work-sharing became more widespread. Although the shorter workweek appealed to Kellogg’s workers, the company, after reverting to longer hours during WWII, was reluctant to renew the six-hour shift in 1945. Workers voted for it by three-to-one in both 1945 and 1946, suggesting that, at the time, they still found life in their communities more attractive than consumer goods. This was particularly true of women. Kellogg, however, gradually overcame the resistance of its workers and whittled away at the short shifts until the last of them were abolished in 1985.
Even if a shorter working day became an acceptable strategy during the Great Depression, the economic system’s orientation toward profit and its bias toward growth made such a trajectory unpalatable to most captains of industry and the economists who theorised their successes. If profit and growth were lagging, the system needed new impetus. The short depression of 1921–1922 led business leaders and economists in the US to fear that the immense productive powers created over the previous century had grown sufficiently to meet the basic needs of the entire population and had probably triggered a permanent crisis of overproduction. Prospects for further economic expansion were thought to look bleak.
Unless the consumer could be persuaded to buy lavishly, the whole stream of six-cylinder cars, super heterodynes, cigarettes, rouge compacts and electric ice boxes would be dammed up
The historian Benjamin Hunnicutt, who examined the mainstream press of the 1920s, along with the publications of corporations, business organisations, and government inquiries, found extensive evidence that such fears were widespread in business circles during the 1920s. Victor Cutter, president of the United Fruit Company, exemplified the concern when he wrote in 1927 that the greatest economic problem of the day was the lack of “consuming power” in relation to the prodigious powers of production.
Notwithstanding the panic and pessimism, a consumer solution was simultaneously emerging. As the popular historian of the time Frederick Allen wrote, “Business had learned as never before the importance of the ultimate consumer. Unless he could be persuaded to buy and buy lavishly, the whole stream of six-cylinder cars, super heterodynes, cigarettes, rouge compacts and electric ice boxes would be dammed up at its outlets.”
Factory workers icing a steady supply of biscuits in 1926 (Credit: Getty Images)
In his classic 1928 book “Propaganda,” Edward Bernays, one of the pioneers of the public relations industry, put it this way: “Mass production is profitable only if its rhythm can be maintained.” He argued that business “cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda… to assure itself the continuous demand which alone will make its costly plant profitable”.
Edward Cowdrick, an economist who advised corporations on their management and industrial relations policies, called it “the new economic gospel of consumption”, in which workers (people for whom durable possessions had rarely been a possibility) could be educated in the new “skills of consumption”.
It was an idea also put forward by the new “consumption economists” such as Hazel Kyrk and Theresa McMahon, and eagerly embraced by many business leaders. New needs would be created, with advertising brought into play to “augment and accelerate” the process. People would be encouraged to give up thrift and husbandry, to value goods over free time. Kyrk argued for ever-increasing aspirations: “a high standard of living must be dynamic, a progressive standard”, where envy of those just above oneself in the social order incited consumption and fuelled economic growth.
President Herbert Hoover’s 1929 Committee on Recent Economic Changes welcomed the demonstration “on a grand scale [of]the expansibility of human wants and desires”, hailed an “almost insatiable appetite for goods and services”, and envisaged “a boundless field before us … new wants that make way endlessly for newer wants, as fast as they are satisfied”. In this paradigm, people are encouraged to board an escalator of desires (a stairway to heaven, perhaps) and progressively ascend to what were once the luxuries of the affluent.
People were encouraged to board an escalator of desires and progressively ascend to the luxuries of the affluent (Credit: Getty Images)
Charles Kettering, general director of General Motors Research Laboratories, equated such perpetual change with progress. In a 1929 article called “Keep the Consumer Dissatisfied”, he stated that “there is no place anyone can sit and rest in an industrial situation. It is a question of change, change all the time – and it is always going to be that way because the world only goes along one road, the road of progress.”
The prospect of ever-extendable consumer desire, characterised as “progress”, promised a new way forward for modern manufacture, a means to perpetuate economic growth. Progress was about the endless replacement of old needs with new, old products with new. Notions of meeting everyone’s needs with an adequate level of production did not feature.
The non-settler European colonies were not regarded as viable venues for these new markets, since centuries of exploitation and impoverishment meant that few people there were able to pay. In the 1920s, the target consumer market to be nourished lay at home in the industrialised world. There, especially in the US, consumption continued to expand through the 1920s, though truncated by the Great Depression of 1929.
Electrification was crucial for the consumption of the new types of durable items, and the fraction of US households with electricity connected nearly doubled between 1921 and 1929, from 35 to 68%. This was followed by a rapid proliferation of radios, vacuum cleaners, and refrigerators. Motor car registration rose from eight million in 1920 to more than 28 million by 1929. The introduction of time payment arrangements facilitated the extension of such buying further and further down the economic ladder.
Electricity sparked a whole new wave of consumer product possibilities (Credit: Getty Images)
This first wave of consumerism was short-lived. Predicated on debt, it took place in an economy mired in speculation and risky borrowing. US consumer credit rose to $7 billion in the 1920s, with banks engaged in reckless lending of all kinds. While it was a lot less in gross terms than the burden of debt in the US in late 2008, the debt of the 1920s was very large, over 200% of the GDP of the time. In both eras, borrowed money bought unprecedented quantities of material goods on time payment and (these days) credit cards. The 1920s bonanza collapsed suddenly and catastrophically. In 2008, a similar unravelling began; its implications still remain unknown. In the case of the Great Depression of the 1930s, a war economy followed, so it was almost 20 years before mass consumption resumed any role in economic life – or in the way the economy was conceived.
The effect of media
Once WWII was over, consumer culture took off again throughout the developed world, partly fuelled by the deprivation of the Great Depression and the rationing of the wartime years and incited with renewed zeal by corporate advertisers using debt facilities and the new medium of television. Stuart Ewen, in his history of the public relations industry, saw the birth of commercial radio in 1921 as a vital tool in the great wave of debt-financed consumption in the 1920s – “a privately owned utility, pumping information and entertainment into people’s homes”.
“Requiring no significant degree of literacy on the part of its audience, radio gave interested corporations … unprecedented access to the inner sanctums of the public mind,” Ewen writes. The advent of television greatly magnified the potential impact of advertisers’ messages, exploiting image and symbol far more adeptly than print and radio had been able to do. The stage was set for the democratisation of luxury on a scale hitherto unimagined.
Television and radio super-charged advertising, directly into people’s homes (Credit: Getty Images)
Though the television sets that carried the advertising into people’s homes after WWII were new, and were far more powerful vehicles of persuasion than radio had been, the theory and methods were the same – perfected in the 1920s by PR experts like Bernays.
Vance Packard echoes both Bernays and the consumption economists of the 1920s in his description of the role of the advertising men of the 1950s. “They want to put some sizzle into their messages by stirring up our status consciousness,” he wrote. “Many of the products they are trying to sell have, in the past, been confined to a ‘quality market’. The products have been the luxuries of the upper classes. The game is to make them the necessities of all classes… By striving to buy the product – say, wall-to-wall carpeting on instalment – the consumer is made to feel he is upgrading himself socially.”
Though it is status that is being sold, it is endless material objects that are being consumed.
In a little-known 1958 essay reflecting on the conservation implications of the conspicuously wasteful US consumer binge after WWII, John Kenneth Galbraith pointed to the possibility that this “gargantuan and growing appetite” might need to be curtailed. “What of the appetite itself?” he asks. “Surely this is the ultimate source of the problem. If it continues its geometric course, will it not one day have to be restrained? Yet in the literature of the resource problem this is the forbidden question.”
We need things consumed, burned up, replaced and discarded at an ever-accelerating rate – retail analyst Victor Lebow
Galbraith quotes the President’s Materials Policy Commission setting out its premise that economic growth is sacrosanct. “First we share the belief of the American people in the principle of Growth,” the report maintains, specifically endorsing “ever more luxurious standards of consumption”. To Galbraith, who had just published “The Affluent Society”, the wastefulness he observed seemed foolhardy, but he was pessimistic about curtailment. He identified the beginnings of “a massive conservative reaction to the idea of enlarged social guidance and control of economic activity”, a backlash against the state taking responsibility for social direction. At the same time he was well aware of the role of advertising. “Goods are plentiful. Demand for them must be elaborately contrived,” he wrote. “Those who create wants rank amongst our most talented and highly paid citizens. Want creation – advertising – is a 10 billion dollar industry.”
Or, as retail analyst Victor Lebow remarked in 1955: “Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption.… We need things consumed, burned up, replaced and discarded at an ever-accelerating rate.”
Thus, just as immense effort was being devoted to persuading people to buy things they did not actually need, manufacturers also began the intentional design of inferior items, which came to be known as “planned obsolescence”. In his second major critique of the culture of consumption, “The Waste Makers”, Packard identified both functional obsolescence, in which the product wears out quickly and psychological obsolescence, in which products are “designed to become obsolete in the mind of the consumer, even sooner than the components used to make them will fail”.
The consumerism of the present day has roots that go back at least a century (Credit: Getty Images)
The commodification of reality and the manufacture of demand have had serious implications for the construction of human beings in the present day, where, to quote philosopher Herbert Marcuse, “people recognise themselves in their commodities”.
There was a time, going back at least 70 years, when all it took to be successful in business was to make a product of good quality.
If you offered good coffee, whiskey or beer, people would come to your shop and buy it. And as long as you made sure that your product quality was superior to the competition, you were pretty much set. Well into the 1970s, a savvy consumer could distinguish between high-quality and shabby products quite easily.
The capitalist system, dependent on a logic of never-ending growth from its earliest inception hasfuled human greed.
The 20th Century, capitalism preserved greed speed by moulding the ordinary person into a consumer with an unquenchable thirst for its “wonderful stuff”..