Consumer Culture in the 1920s: The Birth of Modern Advertising

The 1920s were the decade in which modern American consumer culture was born. For the first time, ordinary middle-class families had access to a stunning range of mass-produced goods — radios, electric appliances, automobiles, cosmetics, ready-to-wear clothing, branded foods. For the first time, the techniques of modern advertising were applied systematically to the task of persuading them to buy. For the first time, installment credit made it possible to acquire expensive goods immediately, before they could be paid for. Together, these innovations created a new kind of economy — one driven by consumer demand rather than production capacity — and a new kind of society, in which identity and status were increasingly expressed through purchases.

The transformation was visible on every Main Street in America. Downtown shopping districts were rebuilt to accommodate the new consumer, with neon signs, plate-glass windows, illuminated marquees, and department stores that grew to the size of city blocks. The chain store spread from coast to coast, replacing independent retailers with uniform national brands. Advertising agencies grew into corporate giants. The nation’s total advertising spending rose from about $1.3 billion in 1915 to roughly $3 billion by 1926, an increase of more than 130 percent in eleven years.

The Department Store and the Birth of the Modern Shopping District

The 1920s shopping district was a deliberate construction. Department stores had existed since the late nineteenth century, but they were transformed in the 1920s into multi-story emporiums that combined retail, entertainment, restaurants, and event space under a single roof. Macy’s in New York, founded in 1858, became the largest department store in the world. Marshall Field’s in Chicago, Wanamaker’s in Philadelphia, Bullock’s in Los Angeles, I. Magnin in San Francisco, and dozens of others created a new type of building — the grand department store — that was as much a cultural institution as a retail outlet.

The flagship store became a status symbol for cities. The Wanamaker’s in Philadelphia was at the time the largest retail space in the world. Macy’s flagship on Herald Square had entire floors devoted to specific categories — furniture on one floor, women’s clothing on another, sporting goods on a third. The stores staged elaborate seasonal events: Christmas window displays, Thanksgiving Day parades (Macy’s began its famous parade in 1924), and Thanksgiving-in-November sales.

The 1920s also saw the rise of the suburban shopping district, anchored by a different kind of store. As cars spread, downtowns lost some of their retail dominance to auto-accessible “auto-row” shopping strips on the edges of cities. The shift prefigured the postwar rise of the shopping mall.

Chain Stores and the National Brand

The 1920s saw the triumph of the chain store over the independent retailer. The Great Atlantic & Pacific Tea Company (A&P), the largest grocery chain, had more than 17,000 stores by 1929. F. W. Woolworth’s had more than 2,200 five-and-dime stores across the country. Sears, Roebuck and Company had been around for 70 years by 1926, but the 1920s saw it pivot from a mail-order business to a chain of physical stores, as the spread of the automobile and the rural free delivery of mail made catalogs less necessary. By 1929, Sears had more than 300 stores doing more than half of the company’s total business.

The chain store offered consumers a new kind of value: predictability. A shopper in Topeka knew that the same products at the same prices would be on the shelves in the same arrangement in the local A&P, in the same way that diners at any Howard Johnson’s would find the same menu. The chains were also the perfect vehicle for national brands — products like Campbell’s Soup, Kellogg’s Corn Flakes, Buster Brown Shoes, and Goodyear Tires that had no connection to any one store and could be sold anywhere.

The rise of chains was not without controversy. Independent retailers complained that the chains used their size to negotiate lower wholesale prices, putting the small operators at an unfair disadvantage. The Capper-Kelly Act of 1933 and various state-level fair trade laws were attempts to slow the spread of chains. None of these efforts succeeded in reversing the trend.

The Birth of Modern Advertising

The most visible symbol of 1920s consumer culture was advertising, and the 1920s were the decade in which the modern advertising industry was born. Total ad spending in the United States grew from about $1.3 billion in 1915 to roughly $3 billion by 1926. By 1929, advertising employed more than 100,000 people directly and supported tens of thousands of additional jobs in printing, broadcasting, and graphic design.

The modern advertising agency had its roots in the late nineteenth century, but the 1920s saw the industry grow into its modern form. J. Walter Thompson, founded in 1868, was the largest agency in the world by the 1920s, with offices in New York, Chicago, and London. BBDO (Batten, Barton, Durstine & Osborn) was founded in 1928 out of a merger of three earlier agencies. McCann Erickson (now McCann Worldgroup) was founded in 1902 and grew rapidly in the 1920s under Harrison King McCann and Alfred Erickson. The agencies hired writers, artists, photographers, psychologists, and researchers to develop campaigns that went far beyond simply announcing products — they tried to associate products with feelings, identities, and aspirations.

Two technological and cultural innovations drove the advertising boom. The first was mass-circulation print media. The number of American magazines exploded in the 1920s, with titles like The Saturday Evening Post, Collier’s, Liberty, Vogue, and Vanity Fair reaching tens of millions of readers. Full-page four-color advertisements — some of them the work of illustrators like J.C. Leyendecker and Norman Rockwell — turned the pages of these magazines into a parallel world of consumer dreams.

The second innovation was commercial radio broadcasting. The first commercial radio station, KDKA in Pittsburgh, began broadcasting in 1920. By 1929, more than 600 stations were on the air, and the two national networks — NBC (formed 1926) and CBS (formed 1927) — had been established. National advertisers like Coca-Cola, Lucky Strike, Palmolive, and General Motors bought blocks of time on the networks, creating the modern commercial broadcasting model. The famous “Oxydol’s Own Ma Perkins” soap opera, which began in 1933, established the format of advertiser-supported serialized drama that defined commercial radio for decades.

The Rise of Brand-Name Goods

The advertising industry existed to sell brand-name goods — products that consumers would choose over cheaper, unbranded competitors because of the brand’s reputation, packaging, and emotional associations. The 1920s saw the consolidation of the brand system across nearly every consumer category.

In breakfast cereals, Kellogg’s and Post competed for the family table. In automobiles, Ford, General Motors, and Chrysler battled for the middle-class wallet. In tobacco, Lucky Strike’s “It’s toasted” campaign, with its appeal to doctors and athletes, transformed a struggling brand into a market leader. In soap, Ivory and Palmolive vied for the bathroom. In soft drinks, Coca-Cola — which had been invented in 1886 — became the dominant American brand of the 1920s, in part through a brilliant 1927 campaign that distributed free Coke Santa Claus figurines to make the brand synonymous with Christmas.

The brand system was controversial even at the time. Critics complained that advertising was wasteful, manipulative, and demeaning. Thorstein Veblen, the economist, had attacked “conspicuous consumption” in his 1899 Theory of the Leisure Class. The muckrakers of the early twentieth century had exposed the false claims and addictive nature of many branded products. Yet the brands won. By 1929, brand-name goods dominated the American consumer economy, and the system of competing brands supported by advertising was a permanent feature of American life.

The Rise of the Cosmetics Industry

The 1920s were the decade in which the modern cosmetics industry came of age. The flapper — young, urban, financially independent — created a new market for makeup that had previously been associated with actresses and prostitutes. Elizabeth Arden, born Florence Nightingale Graham in Ontario, opened her famous Fifth Avenue salon in 1910 and by 1920 was selling her products to women across the country. Helena Rubinstein, a Polish immigrant, had salons in New York, London, Paris, and beyond. Max Factor, a Polish-American makeup artist, had been working in Hollywood since 1908 and developed products specifically for the new film industry — many of which he then sold to ordinary consumers. Revlon, founded in 1932 by Charles Revson, was conceived in the late 1920s as a way to bring Hollywood-style glamour to the mass market.

The cosmetics industry was, in many ways, the purest expression of 1920s consumer culture. It sold products that had no functional necessity — lipstick, mascara, rouge, powder — by appealing to identity, status, and the new visibility of women in public life. It was the first industry to embrace the modern advertising techniques pioneered by the agencies of Madison Avenue, and it helped invent the techniques themselves. To see how these new goods were sold to consumers, see our guide to 1920s advertising history.

Installment Credit and the Buy-Now-Pay-Later Economy

The 1920s consumer economy could not have existed without installment credit. In 1920, most middle-class families paid cash for everything except a house. By 1929, the practice of buying on installment had spread to nearly every category of consumer good. The numbers are striking: about 60 percent of furniture, 80 percent of automobiles, and 75 percent of radios were bought on installment by 1929. Department stores offered their own installment plans. Banks issued personal loans for consumer purchases. The phrase “buy now, pay later” entered the American vocabulary.

The expansion of installment credit had profound effects on the American economy. It allowed the automobile industry to reach working-class buyers who could not have afforded the cars in cash. It allowed the furniture and appliance industries to grow rapidly. It allowed the radio industry to explode — by 1929, more than 10 million American households owned a radio, and most had bought it on installment.

The credit boom also created new risks. Households that took on installment debt became vulnerable to layoffs, illness, or other shocks. The Federal Reserve warned in 1929 that the consumer debt load had become dangerously high. When the economy contracted in 1930 and 1931, the inability of consumers to keep up with their installment payments contributed to the depth of the depression. and to installment buying in the 1920s.

Movies and the Spread of Consumer Desire

The 1920s also saw the rise of the motion picture industry as a powerful engine of consumer culture. By 1929, more than 80 million Americans were going to the movies every week — about two-thirds of the population. The new movie palaces — the ornate theaters built in every American downtown — were palaces of consumption in more ways than one. They were also showrooms for the consumer goods of the Jazz Age, displayed in newsreels, advertisements, and feature films. Stars like Gloria Swanson, Clara Bow, and Joan Crawford were as famous for their clothing, jewelry, and cosmetics as for their acting. Magazine coverage of Hollywood stars drove demand for the styles they wore and the products they used. The relationship between the movie industry and the consumer economy is explored further in our guide to the motion picture industry in the 1920s.

The Birth of the Supermarket

One last innovation of 1920s consumer culture is worth noting: the supermarket. Before the 1920s, most groceries were bought in small neighborhood stores where the grocer personally handed items over the counter. In 1930, Michael J. Cullen — a former Kroger executive — opened the first true supermarket, King Kullen, in the Long Island City neighborhood of Queens, New York, explicitly modeled on Ford’s assembly-line principles. By offering a wide selection of goods at low prices in a self-service format, the supermarket completed the transformation of food retail that the chain stores had begun. To see how automobile-driven suburbia interacted with these new retail formats, see our guide to how the automobile changed American life in the 1920s.