Arguably the first person to ever combine bicycle sales with shrewd retail savvy was John Wanamaker. Wanamaker was a merchant who lived from 1838 to 1922. Along with being a retailer he was a religious leader, political figure, a pioneer in marketing, and considered by some to be the father of modern advertising. He was born and for most of his life lived in Philadelphia. He has been credited as the first person to ever take out a half and full page ad in a newspaper and the first retail merchant to hire a full time copywriter. While he sold nearly everything such as furniture, clothing, and tools he was also one of the largest bike retailers in the United States at the time.
An advertisement for bicycles from The Wanamaker Store in 1898. Retail experience and education of the sport were just as important to Wanamaker as price.
One of his more notable achievements was being the first major merchant to offer a return policy and establishing the common use of the price tag. Before Wanamaker, prices were constantly changing depending on a number of factors. If the product was in high demand, the price went up. If the store was busy, the price went up. If you were not a regular customer, the price went up. If you were only buying one instead of two, the price went up. If the store owner was having a rough day or just didn’t like you, the price went up. Many customers saw this as an unfair system while the retailers saw it as smart business. In the mind of the retailer, if demand or costs go up then price should go up as well.
Wanamaker had a vision that all shoppers get treated equally and fairly. To do this Wanamaker introduced the price tag. He believed that there should be one price, all the time, no matter who they were or how often they shopped there. This simple strategy won over customers by the thousands and further established Wanamaker as one of the nation’s best retailers.
Another Wanamaker ad from the 1890s, this one focused on price, quality, and selection.
While the price tag is still alive and healthy today, we have never let go of the idea of a marketplace where price tags don’t exist. Customers feel they deserve both a fair price and better pricing if they have demonstrated their willingness to dedicate themselves in some way to the IBR. Wanamaker’s price tag, as it turns out, is a facade. The bike industry has never let go of negotiable or moving pricing structures. Manufacturers offer better terms and pricing based on the volume and inventory purchased. Thousands of retailers will offer different pricing to their customers depending on their amount of purchase, frequency of purchase, or loyalty to the store. Peter Fader may have said it best, "Charging everyone the same thing and treating everyone the same way, as retailers do today, is 'Six Sigma' thinking which is great for producing widgets on a production line, but it makes no sense in a world where customers are inherently different.”
IBRs have built dozens of systems that allow us moveable price tag. Frequent buyer programs, club memberships, buy two get one free, discounted tune-ups in the winter, or buy a bike and get 10% off of accessories. All of these are strategies to relive the glory days of the early 1800s when price tags did not exist.
