The following article was written by Michael Luis in part of an on-going series and based off of his book “Century 21 City: Seattle’s Fifty Year Journey from World’s Fair to World Stage”
The Puget Sound region is home to the headquarters of a very impressive list of retailing companies that span a wide range of products and platforms. These companies all started here, many with modest ambitions, and have grown into national and international industry-leading success stories. From Starbucks to Amazon, REI to Zumiez, Costco to Nordstrom, Sur La Table to Ben Bridge, Puget Sound-based retailers can be found in downtowns, malls and shopping centers everywhere.
It is not difficult to develop theories of why retailers from the region should be successful. As noted in Century 21 City and many of these posts, Seattle quickly moved past its origins as a mill town and became the commercial center first for the Puget Sound region and gradually for the state and the Northwest. Seattle businesses supplied the goods needed in all those other lumber camps and mill towns around the Sound, and later provided the “ton of supplies” that each miner needed in the Klondike. Seattle grew, at first, as a city of merchants.
Another angle to consider is the emphasis of businesses in the region on the upper end of the quality and price range. As noted in the previous post, concentrating on the top end of the market was a way for Northwest manufacturers to minimize the impact of high shipping costs, and perhaps that emphasis on quality rubbed off on local consumers and, hence, on retailers.
An insistence on quality in both products and service is the one commonality that runs through any list of national retailers based in the region. This is a place that requires fancy coffee, craft beer, exotic kitchen appliances and no-questions-asked return policies. The kind of upper-middle-brow, slightly snobbish consuming that has taken place in the Northwest for years has become the norm around the country. Seattle-area retailers, it seems, have had the right product and service mix at the right time to capture an increasingly sophisticated national consumer base.
The prominence of retailers in outdoor equipment is easier to explain, given the demanding conditions of the Northwest environment, the early emphasis on “extreme” sports and the general perception that the people who use the products the most actually live here. Eddie Bauer perfected goose down sleeping bags and REI started out as a cooperative venture to import European mountaineering gear, and has stuck to the technically advanced end of that market.
Now, does this speculation really explain anything? Maybe, but the question of retailing based in the Puget Sound region still has the makings of a solid B-school PhD thesis. The important thing, though, is to recognize that the region has a substantial industry cluster that it can build on.
Although we tend to think of retailing as a localized, secondary activity (i.e., one that feeds off the payroll of primary activities like manufacturing) national retailers in the region represent an important segment of the economic base itself. The people working at the headquarters of Amazon, Starbucks, Nordstrom, or Costco are, in a real sense, exporting a service as they support the activities of their company’s branches around the country and the world.
It would appear that the region has a distinct competitive advantage in the retailing industry, and given the large employment base in headquarters and support activities, it may have reached a critical mass that can be exploited for further growth. Just as software companies set up shop in the region to poach Microsoft employees, retailers may decide to locate in the area to take advantage of the large and growing pool of talent in brick-and-mortar and on-line retailing.
Retailing is an attractive industry for the region because it offers excellent career opportunities in a wide range of creative fields including design, marketing, advertising and packaging: not everyone wants to write code for a living. As the sector grows, these kinds of functions can gradually be lured to the region from their traditional strongholds of New York, Chicago and Los Angeles.
The emergence of a large cluster of very successful national retailers provides yet another example of the unplanned, serendipitous nature of economic development. Lack of a unified theory to explain its existence should not stop the region from capitalizing on this very promising sector.
