The Wanamaker’s PGA Trophy: A Retail Lesson Every Biotech CEO Should Understand and Learn From

On Sunday, May 17, Aaron Rai won the PGA Championship and was presented with the Wanamaker trophy.

The Wanamaker Trophy is massive silver prize awarded annually to the winner of the PGA Championship. It’s named after Wanamaker’s, the legendary Philadelphia area department store chain that went from the epitome of successful retailer to one that is only a memory of an older former Philadelphian’s like myself. The company is also associated with founder, John Wanamaker’s famous quote, “I know I’m wasting 50% of my advertising dollars, I just don’t know which half.” 

Wanamaker’s was also where I landed my first job after earning my MBA.

I Quantify Therefore I Am

I was hired as a planning analyst who reported to the VP of Planning who reported to the President. Because I had a background in both marketing and operations research, I brought a unique perspective to the team.

On my first day, at age 21, I was handed an HP-35 calculator and told to bring it to every meeting. My boss joked that if I felt I was being ignored, I should hit the tangent button!

Using analytics, we made some important contributions to profitability.

We used full-time salespeople. Our analysis of hourly transaction data showed our stores were always busiest at lunch time, exactly when many of the salespeople took their break. We recommended switching to part-time staff which gave us better coverage at a lower cost. The idea worked well and got presented at the National Retail Merchants Association.

Another analysis of hourly transaction data also revealed that Monday and Thursday evening hours were unprofitable in most branch locations.  It was costing us more to keep the stores open than our sales on those nights. Management approved our recommendation of closing earlier on those evenings.

During the first energy crisis, I worked with the Head of Operations to identify cost-saving opportunities.

One recommendation was straightforward: shut down the elevators. Escalators moved more people using less energy, and the elevators required operators.

The second recommendation was far more controversial: reduce the number of Christmas Light Shows.

Every holiday season, Wanamaker’s hosted a famous 30-minute Christmas light show in the main store’s massive atrium. It ran four times daily between Thanksgiving and New Year’s and was one of Philadelphia’s iconic holiday traditions. But running the show consumed a lot of energy, and clogged the store’s the highest traffic shopping area.

When I presented the findings to the President, he arrived 20 minutes late. He apologized because he was down in the atrium speaking with the disabled children from Shriners Hospital who had chartered buses to see the show.

A young Jewish kid recommending to reduce the legendary Christmas light shows – you can guess how well that recommendation was accepted.

The Beginning of the End

Several branch stores had flat revenue growth so I conducted a deeper analysis using the Census X-11 program to remove the effects of seasonality and inflation. 

The results were very concerning.

While dollar sales appeared stable, inflation was masking a steady decline in real performance and customer traffic. As the concept of shopping malls grew and Wanamaker freestanding stores were forced to became anchor stores of these malls, specialty retailers located in the malls such as GAP became a new force that customers liked because, while limited in their range of merchandise, they offered more depth and breadth of selection than a full line department store.

We presented the results to Senior Leadership and recommended either closing some  underperforming stores, relocating them to stronger markets, or shifting our freestanding stores into higher traffic shopping malls. We also warned that if the company continued paying large annual distributions to the Wanamaker family without making strategic changes, the chain could face serious financial trouble within five years.

I came armed with charts, trend analyses, and my HP calculator.

None of it mattered.

The recommendations were met with disbelief, and it was clear meaningful action was unlikely. My boss, who agreed with the analysis, soon left for a senior retail position in New York. He recommended me for a couple of positions. I wasn’t willing to move to New York but I did start looking around for new positions and soon joined Stuart Pharmaceuticals as a marketing research analyst.

Wanamaker’s and the Sunk Cost Fallacy 

My prediction turned out to be off by only one year. After six years. Wanamaker’s was sold to Carter Hawley Hale, a Los Angeles retail department store who eventually sold the chain to Macy’s. Today, the main downtown building, a landmark in Philadelphia, stands empty.

Looking back, Wanamaker’s was a classic victim of the sunk cost fallacy – the tendency to continue investing in a failing or underperforming strategy because of the time, money, emotion, and identify committed to it

Organizations often stay with declining businesses because admitting the need to pivot feels like admitting failure.

That same dynamic exists throughout the life sciences industry.

Companies frequently continue developing new drugs with weak future commercial potential because they’ve already heavily invested in clinical trials, built organizations around the programs, and want to avoid the disruption and negative optics associated with terminating high visibility projects or products.

The Real Lesson Wasn’t Retail

What stayed with me most from Wanamaker’s was not that leadership ignored the data. It was that the organization struggled to separate past success from future reality.

The company had built an identity around a retail model that once worked extraordinarily well. But consumer behavior had changed, competitors had changed, and the economics of retail had changed. The data was not predicting failure with certainty. It was signaling that the underlying assumptions driving the business were no longer as strong as management believed.

I see the same dynamic repeatedly in the life sciences industry.

Companies often continue advancing products because of the amount already invested in development, the organizational momentum behind the program, or the emotional commitment attached to the science. But clinical progress and commercial viability are not the same thing. A product can succeed scientifically while still struggling to achieve meaningful adoption in the real world.

That is why commercial strategy cannot simply validate a program after the fact. Its role is to pressure test whether the market is actually willing to change behavior.

My experience at Wanamaker’s reinforced three lessons that remain highly relevant to life sciences companies today.

1. Data Doesn’t Always Provide the Answers But It Raises the Right Questions.

The Christmas light show analysis ultimately missed something important: the emotional and reputational value the tradition created for the community.

But the analysis still mattered because it forced leadership to evaluate whether long standing practices continued to make sense economically and strategically.

In life sciences, commercial analytics should serve a similar role. The objective is not to predict the future with certainty. It is to identify where enthusiasm, assumptions, and market realities may be diverging before major strategic commitments become irreversible.

2. Marketing Myopia: Markets Change Faster Than Organizations Want to Believe

Theodore Levitt’s famous article, Marketing Myopia, tells how companies that define themselves too narrowly risk being blindsided by market changes. Wanamaker’s continued benchmarking itself primarily against traditional department stores while more specialized retailers like GAP and Abercrombie & Fitch were siphoning off large and growing segments of shoppers who liked the breadth and depth of merchandise they offered.

Many biotech and pharmaceutical companies can make similar mistakes. Companies may underestimate the impact that a new product with a different mechanism of action might have on the market. One early example that I lived through was the introduction of Tagamet, the first anti-ulcer drug. At the time, I worked for Stuart Pharmaceuticals whose leading product was the antacid Mylanta. We knew Tagamet was coming but, even though I suggested putting our promotional money into buying SmithKline stock (I was still quite naïve), we continued to focus on Maalox, another antacid.  Tagamet and then Zantac hit the antacid market like a “ton of bricks.”

Companies define their immediate competition too narrowly, focus too heavily on historical analogs, or underestimate how quickly physician, payer, and patient expectations evolve.

Commercial success is rarely determined only by whether a product works. It depends on whether the product fits how healthcare systems, providers, and patients actually behave today.

3. Never Make a Future Decision Based on Past Investments.

One of the most dangerous forces inside any organization is the sunk cost fallacy. The more time, capital, and organizational identity tied to a program, the harder it becomes to objectively reassess whether the strategy still makes sense.

I see this frequently in life sciences. Companies continue advancing products with weak adoption potential because walking away feels more painful than continuing forward.

Commercial Reality Eventually Wins

In the end, Wanamaker’s did not fail because leadership lacked intelligence, data, or operational experience. It failed because the organization could not adapt fast enough to a market that was changing around it.

That is what makes commercial strategy so difficult. The greatest threats to a business are often not invisible. They are the assumptions that once made the company successful.

In life sciences, the stakes are even higher. Companies are making billion dollar development decisions in markets where physician behavior, patient expectations, payer influence, and competitive dynamics can shift far faster than most organizations are comfortable admitting.

Science matters enormously. But eventually every product faces the same question Wanamaker’s did: Will the market still value what made you successful yesterday?

Because markets rarely reward companies for what they have already invested.

They reward companies that recognize change before everyone else does.