Department Stores Bet on Experiences to Win Back Shoppers
In an effort to recapture consumers who are more frequently buying online or from niche retailers and discount stores, department stores are making plans to provide more experiences like spas and restaurants, and offer exclusive selections to transforms stores into destinations. For example, Kohl’s is testing off-price stores, smaller-format stores, investing more in e-commerce and sprucing up its beauty business; Nordstrom is focusing on brands that have limited distribution like Ivy Park and Madewell, as well as personalizing its online services; J.C. Penney has brought back major appliances to lessen its dependence on clothing; and Saks Fifth Avenue is renovating its Manhattan flagship location, with a new layout that encourages more browsing and that makes room for expanded beauty offerings such as brow bars. Finally, at the same time it announced it was closing 100 stores last week, Macy’s also announced plans to “re-create Macy’s physical store presence” to adjust to customer tastes.
Total Retail's Take: Department stores are finally realizing they have to take action to reverse a decade-plus downward trend. Long reliant on clothing sales, department stores have been squeezed as off-price retailers like T.J. Maxx add stores and lure shoppers with discounted designer brands, and fast-fashion retailers such as H&M offer trendier items. Shoppers are buying more and more clothing online, and Amazon.com is expected to unseat Macy’s next year as the largest online clothing seller. Hopefully these new tactics and focus on the customer experience will improve their outlook.