Department stores were founded in the 18th century.
The first department store in the world was Harding, Howell & Co, which opened in 1796 on Pall Mall, London (close to the Royal Palaces).
This is what was said about it
"The house is one hundred and fifty feet in length from front to back, and of proportionate width. It is fitted up with great taste, and is divided by glazed partitions into four departments, for the various branches of the extensive business, which is there carried on. Immediately at the entrance is the first department, which is exclusively appropriated to the sale of furs and fans. The second contains articles of haberdashery of every description, silks, muslins, lace, gloves, &etc. In the third shop, on the right, you meet with a rich assortment of jewellery, ornamental articles in ormolu, french clocks, &etc., and on the left, with all the different kinds of perfumery necessary for the toilette. The fourth is set apart for millinery and dresses; so that there is no article of female attire or decoration, but what may be here procured in the first style of elegance and fashion. This concern has been conducted for the last twelve years by the present proprietors who have spared neither trouble nor expense to ensure the establishment of a superiority over every other in Europe, and to render it perfectly unique in it's kind."
The modern department store was invented in the United States, the UK and France at more or less the same time. Harrods in London opened in 1834. Stewarts in New York was opened in 1846, supplying expensive imported European goods. Macy's in New York opened in 1858.
Originally, all department stores were for the wealthy. It was a way in which they could shop without having to walk the streets. Before this tradesmen visited the individual houses of the wealthy, but it was all very inefficient and time-consuming. Customers also saw a very small range of goods.
The idea of the department store was to bring a wide range of goods to the customer and make the environment a place where people would want to be seen in. So there was a man in uniform on the door, plush carpets and so on. Staff were trained to be very courteous.
Most importantly of all, this was a safe and respectable place for women to shop on their own, something they had never been able to do before.
The most famous department stores in the United States included Macys. In the UK it included Harrods, and the first American owned department store in the UK was Selfridges. Selfridges was established in 1909 in Oxford Street. It was different because it was designed not to cater just for upper classes, but the wealthy middle class, and was organised so that it was to be visited for pleasure, not just shopping. This is the reason it had elegant restaurants with modest prices, a library, reading and writing rooms and more. This is the design of shop that has been adopted world-wide today.
Since then a wide variety of department stores have opened. In fact, many department stores have gone back to the original idea, where each part of the store is given over to a particular make of goods (something called franchising).