Tuesday, September 01, 2015

Aristide Boucicaut: The Trailblazer of Modern Commerce and Retailing

I am currently reading the amazing book of French Expert in retailing Olivier Dauvers on the "Saga du commerce français" (the history of French Commerce). The concept is simple: to detail the history of retailing in France. 

Indeed, we have a long history of entrepreneurship in the retail business in France. Some of them has actually inspired some of the world leader of retail at the moment. I have already discussed how Sam Walton had the idea of his supercenters while visiting some Carrefour stores in Brazil. But what surprised me is that I have never discussed about one of the trailblazer of modern commerce: Aristide Boucicaut.

And that is the first date of this book.Aristide Boucicaut is the founder of "Le Bon Marché", the first department store. What is great to see is how his creation has changed dramatically the world of commerce, and actually invented retailing as we now even today. Here are the main inventions linked to Aristide Boucicaut:

The Price Tag
The book highlight well how revolutionnary the idea was. Prior to the department store, merchant did not advertize their prices and were fixing it upon the look of the clientèle, trying to sell as expensive as they could, based on how looked the customers and what wealth he could potentially own.
Aristide Bouciaut at first began to set some clear price tags, avoiding the fear for customers to be ripped off, and securing them to pay the right price. That was a real revolution! and Nowadays, it is hard to believe it was not the case before.

The Invention of the Catalog
In order to promote its prices and its choice, Le Bon Marché decided to publish some catalogs. They were the first tools of home delivery system, which is now very popular with the Internet.

Before even price elasticity exist, Boucicaut decides to cut his margins from the standard 30 to 40% to 13,5%. He then was able to attract more customers, to have higher rotation rates, and therefore to save on the operationnal costs what he left in margins.

Aristide Boucicaut did not have any big data or computer able to have complex pricing strategies. Still, he understood that in order to preserve margins and to have a good discounter images, he needed to differenciate his margins upon the products. He could then dump some prices of popular items and get the money back on others. The idea was to have a good price image on popular items, and the rest even if they were at a standard price looked cheap.

Department store: Everything under the same roof
As Boucicaut experienced success, he then decided to move to a larger store and to open new category of products. The merchants of the time thought it was a mistake as it was impossible to have any expertise for a merchant in such a vast product range. He hence hired experts in each departments, giving them high incentives on the overall results, to secure to have the advice and the good merchandize. The more choice and products he had, the more customers went to his stores.

Special Event Sales
In the early days of 1873, Paris was hit be cold weather and snow, and the store was empty. Boucicaut decided to create a new operation "le blanc" (White). He decides to get all his white merchandizes (handkerchief, tissues, bed sheets...) and set them up for the store to be all whitened up. The crowd came to see the piece of art he did. Lz blanc still exists today and the event is played by most of retailers, as one of the best promotional events of the year. He understood he had to create events to trigger customers' visits.

Social Benefits
At the end of his era Aristide Boucicaut decided to give extra benefits to his employees, in order to decrease the gap between the salesperson and their premium clientele. Hence he set up a free library, and the premise of a health care system.

When you look at all those innovations, you can clearly see that all of them shaped the way commerce is handle nowadays. This is the reason of this homage to Aristide Boucicaut