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Is there a future for traditional department stores?

Christina Simone

As US department stores close branches and UK retailers innovate to keep customers’ attention, Drapers asks what they need to do to survive.



In the 1990s, when my mother needed a dress for an event, our family of six would pack into her Buick station wagon and drive over the river to Macy’s department store in Manhattan in search for the perfect one. There was always something to be found, along with the perfect accessories, and sometimes a new lipstick to go with it. It was an adventure in the mammoth space, full of racks and racks of clothing and product.

So, when news came out in January that Macy’s was due to close more than 60 stores, part of a bigger plan to shutter almost 100 over the next couple of years, I cried inside. But how could I be surprised?

Online retail is taking over bricks-and-mortar at an extraordinary pace. As ecommerce options get better and more convenient, traffic to department stores continues to fall. Additionally, real estate prices (especially considering the sizes of gigantic US locations) are getting more expensive, and discounting is a not just a strategy but a necessary way of operating.

Besides, deep in my heart, I question if there is still a place for traditional department stores in the current retail environment, either in the US or in the UK. But of course, there are important takeaways from the failures and also from the successes of these retail titans, on both sides of the ocean.

The importance of theatre

Stepping into some retailers, the lack of investment in the in-store environment is clear upon entering the mostly dimly lit, grey spaces. The lack of imagination, understanding of customer experience and, in the worst cases, care, leads to instant competition both from etailers – shopping from the comfort of one’s own lovely home – and brands that obviously spend in this area in standalone shops.

Emphasising customer experience and creating more buzz from services in store, including beauty halls, spas, the addition of food, and teaming up with third parties are some ways to pull shoppers in and to keep them returning.

John Lewis National Treasures 1

John Lewis National Treasures 1

John Lewis’s summer campaign celebrates its “favourite things”

In an effort to rival Selfridges’ in-store customer experience, John Lewis last week revealed its summer 2017 campaign. Masterclasses and workshops will be set up throughout the summer, in addition to the introduction of a rooftop garden society in a space where shoppers can also wine and dine.

The Selfridges Body Studio, cocktail bar, and live in-store theatre performances of Shakespeare plays still rival anything US department stores have to offer. JC Penney has been on the right track, though – it joined up with beauty retailer Sephora to open shop-in-shops in an effort to attract customers and make the space work harder.

Selfridges launches The Body Studio entrance01

Selfridges launches The Body Studio entrance01

US department stores do not offer anything to rival the Selfridges Body Studio

Price above all?



Source: Photo from ferret111 on Flickr

Nordstrom has branched out into its discount store Nordstrom Rack

However, what the US lacks in engaging in-store experience, it makes up for in the world of discounting. Off-price stores such as Nordstrom Rack and Saks Off 5th have opened to help clear excess stock. The standalone stores provide a place to house extra inventory while also opening up the customer base. For instance, Nordstrom’s average full-price store price is £193.19, while at Nordstrom Rack, it is around a quarter of that, at £45.68. The success of Nordstrom Rack as well as its online presence makes Nordstrom a leader in the US.

Stealthily, last week, Amazon released its own clothing label, called Find, which illustrates just how much competition department stores are having to contend with. To rise up against discounters such as TK Maxx and increase customer loyalty in the UK, own-brand development and exclusives at retialers such as Debenhams and John Lewis have proven effective. And while House of Fraser axed some of its portfolio of house brands last year, its commitment to the ones still standing is strong.

To counteract the effects of the rising popularity of online retail and discounting, game plans have had to be adjusted in department stores here and in the US. But while increasing their digital presence is an obvious thing to focus on, department stores are also getting creative in their strategies to keep the spaces alive. Neither the UK or the US has got everything right, but department stores either side of the Atlantic can learn from each other in the quest for innovation and customer interest.


Department store market overview


Nordstrom 107,500 products, 2,610 brands, average price £193.19

Lord & Taylor 91,000 products, 1,133 brands, average price £91.39

Saks Fifth Avenue  74,000 products, 1,199 brands, average price £518.89

Bloomingdale’s  52,000 products, 1,198 brands, average price £176.04

JC Penney 34,000 products, 692 brands, average price £30.42



Debenhams 85,000 products, 627 brands, average price £41.97

House of Fraser 62,500 products, 849 brands, average price £63.40

Selfridges 48,000 products, 1,165 brands, average price £303.30

John Lewis 36,000 products, 719 brands, average price £95.56

Harvey Nichols 24,000 products, 871 brands, average price £495.23


– In the UK, beauty accounts for 14% of department store assortment. In the US, it is 8%.

– Department stores’ market share of all US retail sales slid from 14.5% in 1985 to 4.4% last year

Sources: Edited, Conlumino 

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