Online, off-price and outlets are the three major challenges facing department stores, former Saks Fifth Avenue director and Harrods chief merchant Marigay McKee has warned.
”The three ‘O’s’, as I call them, are very big problems,” she said at the Walpole Luxury Summit last week. “It’s important for stores to have theatre and vitality or it truly is easier for people to just click online.”
McKee, who launched her own consultancy, MM Luxe Consulting following her departure from Saks in April last year, said ongoing uncertainties in economies around the world continue to impact department stores and the sector as a whole.
“The world has never been in a more tumultuous situation in the last in the last 30 to 40 years than it is today. It makes retail very volatile.”
“However, change brings about opportunity. The world is changing very, very fast, but that doesn’t mean there isn’t room for department stores. They’re still pivotal for a lot of people and hold a pivotal role in retail in the UK.
”It’s about offering customers experience, environment and emotion. The future of retail is founded on those three components and there will be much more of focus on them in the future. Department stores are still kings, but a lot of other royalty is coming up among them.”
She added there are also still ”huge” opportunities for British brands looking to grow internationally.
“There’s an appetite for British and European brands to move to the US. There is space for them and I think equally, there are a lot of American brands looking to grow in a slightly different way throughout Europe and Asia.”