The year was 1962.
John F. Kennedy was president. The nation was increasingly engaged in Vietnam, and the Cuban Missile Crisis brought the world to the brink of nuclear war. Johnny Carson became host of the "The Tonight Show," Marilyn Monroe died and the Rolling Stones made their debut in London. And in quiet cities across Middle America, a retail revolution was taking place.
Middle-class households were booming, and suburbs, as well as the first enclosed shopping malls, were catering to them. But savvy retailers were looking for ways to bring value to customers within a more profitable building footprint, according to Dan Butler , a VP at the National Retail Federation. Pioneers such as Walmart founder Sam Walton realized that people wanted value year-round, not just once a season when department stores cleared out merchandise.
Conditions were ripe for a new retail concept. Over the course of 1962, Walmart, Target , Kmart and Kohl's opened their first stores in Arkansas, Minnesota, Wisconsin and Michigan, respectively.
Department store chains fought back with promotional pricing policies at first, but most eventually determined that it was wiser to complement their full-service stores with separate discount operations.
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"Retailers found that some consumers responded very well to sales, while another portion responded to the idea of value priced and low prices," Mr. Butler said. "Initially, if you were a department-store customer, you never shopped in a discounter. It was somewhat class- and income-driven."
Discounters expanded rapidly over the course of the decade. Kmart counted 162 stores by 1966, Walmart added stores in Oklahoma and Missouri and Target staked its claim in Colorado. Mass media made it relatively simple for them to introduce themselves as they entered markets. And a lot of their advertising was handled in-house (newspapers accounted for more than 90% of retailers' budgets). Target , for example, founded its in-house advertising department (still in existence) in 1968.
By 1970 discounters had become part of the nation's lexicon, so much so that Walker Art Center in Minneapolis commissioned artist Red Grooms to do a work titled "The Discount Store." Inspired by a Target , Mr. Grooms created an installation that was reminiscent of a carnival, with bright lights and popcorn stands. That same year, Target tapped comic Jonathan Winters to appear in 30-second commercials featuring merchandise promotions and calling attention to store openings. He was used in the spots to give Target a "fun image," Ad Age reported at the time.
Target had already earned a favorable reputation -- and flattering nickname -- in the burgeoning discount category. "When we first opened, it was unlike anything anyone in Minnesota had seen before. It was bright, well-organized, easy to shop," said Tony Jahn, Target 's senior corporate archivist and historian. "The store was so different to the folks in Duluth that they called it "Tar-zhay' and gave it more cachet by using a French accent."
On the whole, discounters were viewed as places where you paid your money and took your chances. But they had Wall Street 's respect. Walmart had the first of its 11 stock splits in May 1971 and was listed on the New York Stock Exchange the following year.
Meanwhile, Kmart, which worked with agency Ross Roy, Detroit, was becoming ubiquitous, opening 17 million square feet of retail space in 1976 alone. That same year, Ad Age named Robert Dewar, chairman of Kmart parent company S.S. Kresge, its Adman of the Year.
The retailer, which used the tagline "The saving place," was hailed for its "sense of practicality and enthusiasm." All corporate employees, including top executives, took their lunch hour in the dining room, Ad Age reported.
But despite its pragmatic nature, Kmart's aspiration was clear: Become the nation's No. 1 retailer by passing Sears Roebuck & Co. Kmart touted its plans throughout the 1970s and 1980s but never achieved its goal.
As discounters grew, they began to move away from the five-and-dime merchandising mentality. In 1974 Target introduced planograms, which brought uniformity to the stores.
"The overlying outline of what a store is today -- that 's one of the great things planograms gave us," said Mr. Jahn. "It gave structure to our business."