Since the industrial revolution, economic growth has driven the rise of consumerism and shopping. Payments have responded, attempting to provide consumers with the most convenient and affordable way to purchase goods and services. Over the last century or so, the way Britons find, shop and pay for goods has changed considerably but some things have remained the same. At the time of Barclaycard’s 50th birthday, I take a look at the changing nature of shopping and shop-keeping.
Before the first coins were cast, valuable assets were used as currency and were exchanged or bartered for goods or services that shoppers needed. However this was an inherently inefficient system.
So, from 3000BC, the Mesopotamians began unifying payments and introduced the Shekel, a specific unit of barley. From 700BC, the Greeks introduced the metal coin as a means of payment, followed in 600BC by the banknote in China. The first credit voucher was introduced in the UK in 1700. While it took many hundreds of years for these innovations to become widespread, this commoditisation gave consumers choice. For the first time, shoppers did not need to exchange like for like at a specific moment in time but they could lay their hands on a variety of items by using a singular payment method.
In parallel with the availability of coins and paper money, the marketplace began to move in a new direction. No longer were shoppers coming to the market to swap salt for animal skins; they came to buy both. This change in behaviour impacted sellers and the shopping model. For merchants, this meant that they needed to scale up their offering to ensure they sold the products that locals wanted to buy and residents could decide who they wanted to buy from and at what cost.
In turn, shopkeepers began to tailor for a wider audience and to look at new ways to attract consumers. Merchants were able, for the first time, to uniquely specialise in selling a particular product, such as meat or wool as opposed to holding or exchanging an assortment of stock that they would need to barter. By carrying specific produce or selling a slimmed down selection, quality improved overall giving consumers better value. Alongside this, merchants began to advertise their unique businesses with hanging signs and newspaper advertising, especially in the 17th century.
Market sellers initially began selling specific wares such as meat, vegetables, cloth or a collection of goods and over time this morphed into the general store or village shop where locals would go to purchase provisions. The local shop was often the cornerstone of a community where customers were treated to a personalised service and were able to settle once a month. It was uncommon, at this time, for shoppers to carry around large quantities of money. Many workers were paid weekly and, as they were not wealthy enough to employ a banker, they alone were responsible for storing their cash. Their money was well hidden in a safe place and often used to settle bills. At many local shops, shoppers would buy goods; the merchant would keep an inventory and then bill on a weekly or monthly basis. It was the same for the world of fashion. The upper classes would see a tailor each season, select styles and fabrics to create new dresses or suits and they would settle after the goods were made. Paying on the spot was not a necessity or even the norm.
Importance of personalisation
The key value in this model lies in the consumer receiving a bespoke service and having the flexibility to settle their account at any point in the month. And agility has been at the core of the payments industry. Consumers like to manage their budget in the way that best suits them over a period of time and this account structure was what inspired the credit card. While the advantage of a contemporary credit card is the ability to spread the payments, the old-fashioned account system gave households the freedom to settle depending on how they balanced their books.
The value offering
Although consumers were treated to a bespoke service and could settle their accounts with some degree of ease, they were often tied to their local shops and were lacking in options from a price perspective. This system was primarily upset, in the 19th and 20th century, thanks to the industrial revolution, mass production and, in turn, rising competition.
Cheap and cheerful shops evolved offering consumers attractive prices, fashion moved forward so department stores sprung up and the consumer goods industry grew. Great British brands such as Sainsbury’s started in 18691; Marks & Spencer’s humble beginnings were in 1884 with the slogan ‘Don’t ask the price, it’s a penny’;2 and Boots began selling prescriptions at half the price of other chemists in 1884.3 The mainstream evolved and packaged products proved popular such as Colman’s Mustard, Crosse & Blackwell® sauces and Wilkin & Sons jams. These shops and brands led the way in offering consumers well-priced and well known goods, and so made way for discount stores, online discounts and loyalty schemes today. A new era of shopping had begun and this encouraged the evolution of new payment methods.
Paying your own way
20th century Britain went through unprecedented change. This wasn’t just restricted to the aristocracy but to the emerging middle and working classes. Companies such as Provident Clothing paved the way for the credit card system. In 1880, it introduced credit vouchers for working class families. This enabled families to pay for items at pre-approved shops, with these vouchers. A Provident Clothing rep would then call at the family home to take payment for the vouchers. In many ways this was a precursor to a credit card and meant that families were not under pressure to find the cash for clothing purchases by writing a cheque or paying in cash. As time wore on, financial companies were beginning to see an opportunity for their own business and for customers in providing credit.