Getting Over the Threshold
"This better work, kid. It's your ass if it doesn't." Strong words. Especially when you consider that they were directed at me, then a 24-year-old store planner, by Milton J. Petrie, founder and chairman of Petrie Stores. It was 1948 and I had just presented Petrie with an alternative plan for an apparel store he intended to build in Highland Park, Michigan, a close-in suburb of Detroit.
Petrie was a big wheel in retailing. Starting with a single hosiery shop in Cleveland in 1932, he had essentially invented the women's specialty store business in America and knew a good deal about how to design and build stores. By that time he was running hundreds of stores around the country. What was wrong with the basic design of the company that he had relied on so successfully? And what did I, a junior draftsman half his age, know that he didn't?
Here's what: The classic Petrie store employed what we called a "deep throat" entry space bracketed by display windows. The front door was set 10 to 15 feet in from the sidewalk, which allowed the customer to view merchandise before entering the store. In theory, a shopper, protected in this initial U-shaped display space from the activity and weather of the street, would enter the shop having already begun to make her purchases.
That was the theory anyway. But I didn't buy it. I may not have owned a business at the time, but I had been selling things--shoes, clothes, flowers--to people since I was a kid. And I saw an inefficient use of space and unnecessary barriers. First, the window displays robbed precious interior sales space. Second, the idea of retailing is to get people inside the store. The added distance from the sidewalk to the front door only heightened the odds against the customer passing through the front door. Third, it was an aesthetic mess. The sheer amount of display space was difficult and expensive to maintain in an attractive and imaginative way. Window dressing is an art.
Petrie Stores was a critical tenant in a three-store retail development that my firm was designing, and I certainly didn't want to mess things up. But I had to communicate my point of view. So I presented an alternative design that featured shallower display windows and a welcoming front door on the sidewalk closer to the property line. I believed that this would create significantly more sales space and turn the store itself--with its merchandise and human activity in full view--into the display. Most important of all, far fewer obstacles stood between the customer and the goods, the customer and the salespeople, the customer and a sale!
"In short, Mr. Petrie," I explained, "we can eliminate much of the threshold resistance."
"Threshold resistance," he repeated. "What do you mean?"
"It's the force that keeps your customer from opening your door and coming in over the threshold," I said.
What followed seemed like the longest period of silence in my life. Had I insulted this retailing legend? Had I jeopardized a leasing deal for one of my employer's most important clients? How was I going to tell my fiancée that I got fired?
But that's when those glorious words came out of his mouth: "This better work, kid. It's your ass if it doesn't."
Fortunately, the new layout did work, as I was pretty sure it would. You see, I had begun to study what made a customer say yes or no to a sale at a very early age. From age 11 through high school, I worked weekday afternoons and weekends at Sims, a discount department store in Pontiac, Michigan. Later, after serving in the Second World War, I enrolled at the University of Michigan on the GI Bill. It wasn't the typical college experience. I spent a lot of time working. On behalf of the local shoe store, I would visit sorority houses just after dinner with an assortment of shoes from its inventory. With the permission of the housemothers, I displayed the shoes on the stairway leading up to the dorm rooms. As they finished dinner, the women would pass by my display, I would take orders, and they would pay for and pick up their new shoes at the store in town over the next few days. As part of the transaction, I would hand them a slip of paper designating the style and size of their shoes. Thanks to my training at Sims, I could guess a woman's shoe size correctly (honestly, I never missed), but the girls didn't see the size on my order slip. I had devised a code with the storeowner that only we could decipher. No other form of threshold resistance kills a sale faster than suggesting to a woman who wants to be a size six that she is really a size nine.
Later, during prom season, I assembled a sales force of fellow students to stream through the dormitories and fraternity houses taking orders for corsages, which I priced well below the local florist. On prom day, I drove up to Detroit's Eastern Market to buy the corsages wholesale, then drove as fast as my finicky 1940 Ford (NYSE:F) would take me back to campus, where my sales team was waiting. Orders were delivered by bicycle to customers' doors. Again, the business was designed to help customers overcome any reluctance to buy, whether that be cost or laziness.
Six years after graduating from college and two years after that memorable exchange with Milton Petrie, I started my own real estate development company with a $5,000 loan. After turning around a shopping plaza project that another developer had botched, I began to specialize in building malls. These pioneering centers were far from traditional downtown shopping districts and they were huge--over a million square feet. At every turn, they created an environment in which very little would stand between the customer and the merchandise. Wraparound parking lots were designed to funnel customers into stores and to provide as many close-in parking spaces as possible. To accommodate baby strollers and wheelchairs, the buildings were built essentially barrier free. Ceilings were designed of sculptured white plaster, to be comforting but not interesting enough to draw shoppers' eyes away from the merchandise. We built malls with two arcade levels and made the second-floor hand railing transparent, so shoppers could look into the windows of the stores above and below them. We also considered the most effective adjacencies for stores. Unlike most landlords, we negotiated the shortest leases possible, so that when we discovered optimal combinations of stores--such as a shoe store that worked well near a Brooks Brothers--we could replicate them elsewhere.
As the years passed, my theory developed further. In 1983, I bought Sotheby's (NYSE:BID), the auction house. I was convinced that a broader market of potential auction customers existed around the world. But there was a powerful force keeping individuals out of the auction rooms and holding Sotheby's back from dramatically increasing its business and improving its market share: threshold resistance. Sotheby's staff were often rude, unresponsive, or condescending. The auction process itself, for most people, was bathed in threshold resistance. If I sneeze, will I own the Van Gogh? Should I bid early or wait for the last possible moment to raise my paddle for the first time?
Under my ownership, Sotheby's embraced a service mentality and treated everyone with respect. In London, we added a café to the lobby of the auction house. In New York, we added private sky boxes to the auction room and built six floors of exhibition and sales space. We extended credit to individual collectors. We expanded the use of traveling exhibitions to allow potential bidders in places such as Germany and Japan to view items headed to auction. We developed promotional campaigns to increase the number of subscribers to our catalogs. And to build our brand, we organized unapologetically glamorous auctions of items from the estates of Andy Warhol, Jacqueline Onassis, and the Duchess of Windsor. (Though rewarding in many respects, owning Sotheby's ultimately had tragic consequences for my family and me, as I was accused and convicted of price fixing and spent 10 months in jail at the age of 78--unjustly, in my view.)
Through it all, I've gotten pretty good at assessing and responding to threshold resistance. Breaking down barriers is very rewarding. It can be scary and risky. It can also be fun. Bringing new shopping opportunities to communities across America was great fun, as was opening the world of art and collectibles to a broader audience. Every success involved placing opportunities in front of customers and figuring out how to make things better, not just different. For whatever reason, it came naturally to me.
A. Alfred Taubman is the founder of the Taubman Cos. This column is adapted from his forthcoming book, Threshold Resistance, copyright ©2007 by A. Alfred Taubman, and published by arrangement with Collins Business, an imprint of HarperCollins Publishers (NYSE:NWS).
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