Guest: Traub, Marvin
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THE OPEN MIND
Host: Richard D. Heffner
Guest: Marvin Traub
Title: Like No Other Store: Marvin Traub’s Bloomingdale’s”
I’m Richard Heffner, your host on The Open Mind, My guest is a distinguished American I hadn’t seen in half a century when earlier this decade we attended our Dewitt Clinton High School class reunion. Fifty years had gone by, and many of our Clinton classmates were quite accomplished. Scientists, doctors, lawyers, journalists, public officials, college presidents. But none perhaps more than my brilliantly entrepreneurial guest today, Marvin Traub, the retired long time chairman of Bloomingdale’s, “Bloomie’s: to us New Yorkers, now the not at all retiring head of his own consulting and retailing company, and the author of the Times book Like No Other Store, as apt a title as you’ll ever find.
Well, I am reminded of what someone somewhere reported as a bit of California graffiti by way of Rene Descartes, of course. Perhaps it was on a license plate: “I shop, therefore I am.” And I think of The New York Times’ reference to Mr. Traub’s Bloomingdale’s as “More than a store; rather a symbol of our entire consumer culture.”
“During the 41 years that Marvin Traub worked at Bloomingdale’s,” wrote The Times, “The store became to retailing what Barnum and Bailey is to circuses: The Greatest Show on Earth.” And I suppose I ought first to ask of my classmate of so many years ago whether he’s ever really felt like a ringmaster.
TRAUB: Absolutely, Richard. Pleasure to be here and have a chance to talk about the book. And part of the secret of Bloomingdale’s, really, was trying to have things happening throughout our store and all of our stores, and trying to keep an awful lot of balls up in the air all at once while producing very exciting theater for our consumers.
HEFFNER: “Theater for your consumers.” That’s an expression that you’ve used, it’s a concept that appears again and again, “Like no other store.” What do you mean?
TRAUB: Well, when I joined Bloomingdale’s, most department stores were rather similar. There is not too much to differentiate one store from another. And the people who were directing the store then, Jed Davidson and Jim Schoff, had a vision of a store they wanted to make, a neighborhood store for the upper East Side, recognizing that people all over the country could appreciate that concept. In order to do it, to differentiate our store, we set out on a marketing campaign to develop product all over the world so we would be different, to ultimately do promotions, trying ourselves in with India, China, Israel, the Philippines, to tie ourselves back to the emerging group of young designers then in America, the Ralph Lauren, Calvin Klein, Halston, later Donna Karan. So we had things going in all areas while we changed the atmosphere and the environment of everything from our shopping bags to the look of our stores.
HEFFNER: What’s going to happen now, though, now that one talks about shopping at home? What’s going to be the appeal of Bloomingdale’s and its counterparts in the future? Or is there no future?
TRAUB: I have said very clearly that the department store is not a dinosaur. I think the advantages of the department store, for women who like to be able to go to – and men – to one place where they can shop for their entire wardrobe or for their home means the department store is a viable concept for the future. On the other hand, it’s clear in today’s very busy society that there are some people, one group of consumers who like to shop at home, whether it’s through catalogs – and Bloomingdale’s joined that business by creating what is today a $100 million Bloomingdale’s-by-Mail business – or the newest way of shopping at home: electronic shopping.
HEFFNER: What do you think is going to happen to the balance between and among those?
TRAUB: Well, I think electronic shopping, QVC, Home Shopping, the infomercials are a tiny, tiny business. I think the media has given the public the impression that it’s a much bigger business than it is. It’s today less than half a percent of total retail sales in the United States. So that as it grows – and it will grow – it is still a relatively small player. At some point, when you get to the stage of interactive elective shopping … By “interactive,” Richard, what I really mean is, right now the consumer is the captive to whatever is on their television set. With interactive marketing, the consumer can say, “I’m interested in videocams, or in bicycles,” and bring up on their screen the product that they’re interested in. That will be an enormous change, and that’ probably three to five years down the road. That will greatly increase the potential for home shopping. When it does, I suspect the area that will most be competitive with it is the catalog, because it is many of the same principles. Now, some of the smartest people in the catalog business are, instead of just trying to compete with electronic shopping, they’re joining. They’re trying to take advantage of their data bases, their fulfillment and their behind the scenes knowledge, so that I do believe in the long term, electronic shopping will impact catalogs. But I think that the smart catalog houses will take advantage of that.
HEFFNER: Yes, but take advantage of that how? By joining them, as you suggest? By folding into the electronic process?
TRAUB: Well, I think to some extent they’re … I’m thinking, for example, of a Spiegel, which has a joint project with Time Warner. If somebody is going to do a huge business on electronic shopping down the road, I think they would like to be able to do it. And if they’re going to lose some of their catalog business, they can replace it and more with this newest form of shopping. If it develops as people want it to, because there’s a very long ways from where we are today to being able to have that little black box, which at the moment costs an awful lot of money, sitting on your television set so you can order up different merchandise.
HEFFNER: Do you really believe that, that we’re a long way away from that?
TRAUB: Well, I read an estimate that to equip about 2/3 of the homes with cable will cost $35 billion, with black boxes. And somebody’s going to have to foot that bill.
HEFFNER: Well, we know who it will be. It will be the consumer. The consumer seems to be willing to do so.
TRAUB: That’s not proven yet. I suspect if someone says to a consumer, “You can have it for $2 or $3 a month,” the answer is, “Yes.” If it becomes a lot more money, then people will stop and think about it.
HEFFNER: You know, you said before, and you say in the book, the department store is not a dinosaur. That’s your act of faith. That’s your belief. What would be the argument on the other side? And there are those who say that it is a dinosaur.
TRAUB: The argument on the other side, I think, is not so much that the department store will disappear as it is that the department store is likely to lose share of market. That over the next decade, as various forms of retailing grow, whether it’s specialty retailing, some of the mass stores, electronic marketing, that the department store is likely to lose a share of the consumer dollar, will not grow at the same rate as the others, that the department store is a mature industry. There are lots of people who hold that particular belief. The argument that the department store is a dinosaur and will disappear, I think, is pretty hard to make. They are so much an entrenched part of our culture; it’s very hard to imagine New York City without a Bloomingdale’s, a Chicago without a Marshall Field.
HEFFNER: You know, when we got together with our classmates of long, long, long ago, I was fascinated by the fact that so many of them were doctors, lawyers, Indian chiefs, political people. There weren’t that many entrepreneurs; there weren’t that many businessmen. And I had the feeling that Dewitt Clinton in the late ’30’s and early ’40’s, we had a group of people who rather looked askance at business, at the matter of making a buck rather than serving the public. You seem to have put the two together.
TRAUB: Yes. I think it’s always hard to think in the context of a different era. When we were at high school, the country was just coming out of the Depression. It was the era of the New Deal. Somehow I think all of us were bright, young liberals, including you, sir. And …
HEFFNER: Not so bright, but go ahead.
TRAUB: (Laughter) And somehow there was a slightly anti business environment in the air at that time. I think in the period since, I think business has somehow become more respectable to young people. I guess I was a little different. I was always enthusiastic for business, although my great hero in those days was Wendell Wilkie, who combined being both a statesman and a businessman.
HEFFNER: The barefoot boy from Wall Street.
TRAUB: That’s right.
HEFFNER: But, you know, let’s pursue this a bit. You’re right. We were mostly young liberals. After all, the faculty at Clinton was made up, in very large part, as most faculties in those days, of people who had been perhaps driven by the Depression, perhaps driven by the impact of the ’20’s, too, into a left leaning political stance. What has happened to that, in your estimate, if, when we went to the reunion, we saw all these fellows who had become professionals, and not professional in management, not professional in business, but had looked askance at the pursuit of the dollar, what do you think the situation is today? Has it reversed itself? Do we now have a business oriented society? Is it easier to find youngsters following the pursuit of the business dollar?
TRAUB: I think we went through a period, particularly in the ’70’s and ’80’s when most of the graduates were looking to make a lot of money. That was an enormous goal. So, therefore, business was more respectable to that group. I think in the ’90’s, the major values seem to revolve much more around home and family and a comfortable career rather than quite the extent of the entrepreneurial drive. In either case, business is certainly more respectable. But the mood of the country swings in different ways. Much as it was one way in the ’40’s, different in the ’70’s and ’80’s, where everyone was looking how they would make a lot more money than their family, be a lot more successful. A very acquisitive era. And that was why Like No Other Store, why Bloomingdale’s did particularly well, because people wanted things, and were willing to buy the most expensive frequently. I think now it is a somewhat different period of aspirations.
HEFFNER: With different aspirations, will there be a different lot for those who are attempting to sell, for those who make their life’s work merchandising?
TRAUB: Retailing is very much all about change. Bloomingdale’s was successful, in my opinion, because we tried to change before the consumer. I have written that I think the consumer of the ’90’s is interested in quality, in value, in the environment and things that are environmentally appropriate, and much less interested in the most glitzy merchandise, and clearly, even in the case of the affluent, much less interested in the most expensive designer apparel. So the people who are running retail establishments, be it Bloomingdale’s or Wal-Mart or Macy’s, have to try to be aware of that, much as they have to be aware of the fact that we have an aging population, and that their needs are different, or this enormous interest in trying to look young and skin care and cosmetics. So you try to anticipate what the changes in society will bring if you’re running a retail store.
HEFFNER: If you were at Bloomie’s today, what would be the overarching concerns that you would reflect in your policies, and how different would they be from the concerns that you reflected when you were chief?
TRAUB: I would still be emphasizing the things that would position Bloomingdale’s: different, exciting, unique. But I would be putting more emphasis, as the current management is, on maybe one price point down, that the designer business, while appropriate for the company, does not have the same potential as what’s called the bridge business, which is Donna Karan or Ralph Lauren, slightly less, lower price points.
HEFFNER: One point down. Tell us what you mean by that.
TRAUB: Well, retailers think in terms of price points. So a designer jacket for women could be anywhere from $1,000 to $2,000. One price point down might be 1/3 less than that, 600 or 700, or even 500. So it is, things in department stores are segmented by price.
HEFFNER: Well, what will that mean to the future of our economy, if you’re talking down?
TRAUB: Well, I’m not necessarily talking down. But still, a $600 or $700 jacket for most women is still expensive.
HEFFNER: To be sure. But it’s not 1,000.
TRAUB: No. But if you sell three for every two, you’re even. And I think what’s happened with the growth of this designer bridge business is it’s both attracted people who might have bought the higher prices, but it also persuades some women to trade up a notch.
HEFFNER: Trade up a notch from two notches down?
TRAUB: From a lower priced garment.
HEFFNER: What does this say about your evaluation of where our national economy is going?
TRAUB: I guess I have two points of view, Richard, there. The short term, I guess all of the retailers are still concerned about 1993 has not been a great year. Christmas is going to be good, but not outstanding. We have a concern with the increased cost of health care, with the lack of growth in the number of jobs, that we are in a period short term where the economy is slowly coming out of recovery. I think our country, though, is made up of people who are inherently optimistic, and so whether it is late 1994, 1995, see much healthier growth down the road in the future.
HEFFNER: You see us coming out of the doldrums into a period of recovery?
HEFFNER: May I ask you something straight?
HEFFNER: Marvin, as classmates, would you say that, as a businessman who needs us to feel up, whether you believe that or not?
TRAUB: Fair question. Retailers, particularly someone like me, is probably inherently an optimist. I have, throughout my career, always felt there is a way of making things better, and things will get better. So it’s an honest answer, and it’s not just for the public. But some of my financial confreres tend to be a little more conservative than I am.
HEFFNER: But, no, okay, how does one evaluate? Marvin Traub says this. Marvin Traub is a great merchandiser. Marvin Traaub is a great retailer. Marvin Traub has been a very successful businessman, and he’s up. And that up-ness accounts for a lot of his success. What do we do, those of us who know so little, for whom, when you mention economics, the shades come down over our eyes, there’s a film that falls down when you talk about dollars and cents? Can you make it happen by being that optimistic? Can you make it happen by being up? Or are we going to kid ourselves as we march into the last part of this century?
TRAUB: The economy really is a combination of cyclical movements and the mood of the consumer. And no one can discount that. At the same period when the retailers, at least the department store sector, is feeling this is not a great year, the automobile industry is doing very well because consumers are turned on to buying cars. And even within the department store industry, where people have new ideas, the Sears, the JC Penney, with changed concepts, or Warners Studios Shop, which is a marvelous, fun way to shop, they turn on consumers. So some of what will happen in the ’90’s is how do consumers feel about themselves and what they see offered to them.
HEFFNER: And you want them to feel better about themselves and about the future.
TRAUB: Yes, I think that’s healthy for everyone.
HEFFNER: You know you say “healthy.” And I go back to my early Cartesian California Graffiti, “I shop, therefore I am.” Is this the healthiest possible frame of mind for Americans, or people anywhere, for human beings, to shop, shop, shop? You know, you’re a graduate of the Harvard School of Business, of its probably its most successful, most famous class. What was it, the Class of ’49?
TRAUB: That’s correct.
HEFFNER: Okay. I remember, in Mark Sullivan’s Our Times, reading a little bit of, I think it was called “Harvard Indifference,” a little poem that was used at Harvard at that time, and it reflected Harvard graduates’ indifference to the pursuit of the dollar and the feeling that there was something wrong about this pursuit, and in the time it would take us further and further on the way to Hell. Do you think we’re going to be able to continue in this country in this consumerist vein? And in the long run, is it good or bad?
TRAUB: First, in terms of Harvard, Harvard has something called the Charles River. Harvard College is indifferent to making money. Harvard Business School is built on making money.
TRAUB: So it’s almost as if you have two totally different Harvards.
HEFFNER: You went to both.
TRAUB: I went to both. I was very suspect at Harvard Business School, because I had been educated at that liberal establishment across the river.
Is it good to have a consumer driven economy? I’m probably either the best or worst person to ask, because what Like No Other Store is all about is trying to get consumers excited and enthusiastic for shopping. Prior to our kind of taking over Bloomingdale’s, department stores were a middle ground in presenting what the manufacturer made to the consumers. One of the major changes we made is we tried to anticipate what it is the consumer would want. So if we felt they wanted Country French or Country Italian furniture, we would have it made. Or if they felt women wanted long coats, we would try and go out and do that.
HEFFNER: Wait a minute, wait a minute, wait a minute. Didn’t you create the want?
TRAUB: Yes. Yes. It was a combination of saying, “Well, what will people want, or what should they want?” And people want change if they’re furnishing their homes or their wardrobe. Yet they have to feel comfortable with it. And you’re right, we helped create the want for the furniture by really by doing model runs. So it showed people how they could decorate their living room, and there is a marvelous looking armoire or coffee table or sofa. So we helped to create the want. But once people did that, I believe, and took the furniture home and changed the look of their living room, they enjoyed it. That gave them pleasure. And it’s the whole theory that shopping is not a matter of necessity. Because God knows, people really don’t need to buy a new suit, a new dress, or even new furniture. But it’s a matter of trying to create satisfaction for them. And I would argue that that’s a healthy demand that we helped to stimulate.
HEFFNER: You’d argue, then, that that satisfaction is a very positive thing, and the satisfaction itself drives the wheels of our economy.
HEFFNER: To what end, Marvin? To what end? We want more, we buy more. You create our wants, and you satisfy our wants by providing the merchandise.
TRAUB: Well, isn’t one of the things that we’re really talking about is people’s lifestyle. Earlier, I think I said that we’re an era where people are concerned with values, with home and family. And having an attractive home or dressing their children nicely, I think, does make for a more full life, gives, people should feel good about themselves. And if we help – and it’s probably a narrow point of view – by supplying some of that, I view that as positive.
HEFFNER: I wouldn’t say it’s a narrow point of view. I’m fascinated by it, because it surfaces in Like No Other Store to a fare-thee-well. And I would guess that, harking back to our Clinton, generally liberal, end of the Depression, or middle of the Depression psychology, it’s fascinating to me that you, of all people, have surfaced from this with this great American enthusiasm and optimism. And I hope that you’re right about the potential for continuing it. And I hope that you’re right about even the future of the department store. If you had to make a bet, you’ve bet the department store would continue. You don’t see this as the obituary for the department store. What’s going to push it along? What are the forces that you want to see at work now?
TRAUB: Okay. In the book, I list 19 principles of retailing for the ’90’s, that, hopefully, if I were running a store, I would still want to do. Some of the driving forces for the stores are going to be learning to be low cost operators. Because if the consumer is seeking value, the stores have to find ways of doing it without taking it away from customer service. Which means greater use of data processing and mechanization behind the scenes. You have a drive to combine department stores into bigger groups, where A&S takes over Jordan Marsh or Filene’s takes over G. Fox, creating bigger and more cost effective stores. So that’s one area of operating more cost effectively. The other, though, is remembering that they are consumer driven, and have to stay ahead and meet and excite what the consumers like.
HEFFNER: There’s no question, as we end our program now, time is up, that you’ve been a consumer driven optimist all though this, and one really needs to read Like No Other Store to get a true sense of what it was like to surface from the rather down at the mouth ’30’s into someone who has created a much more optimistic world.
Marvin Traub, thank you for joining me today on The Open Mind.
TRAUB: It’s been a great pleasure. Thank you, Richard.
HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. And if you’d like to share your thoughts about our program today, please write: The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150. For transcripts send $2.00 in check or money order.
Meanwhile, as another old friend used to say, “Good night and good luck.”