What Is The Future For Department Stores?

With the internet becoming a dominate force in shopping, do department stores still have a future? The short answer, is yes they do. But there are changes that they’ll need to embrace in order to survive in a chancing climate.

Let’s look at department stores in general today. Most of these stores have started to reduce the upfront buying they are doing. Instead, they are looking at reordering during the season to cut back on the risk of having an overload of items that won’t move. This has driven these department stores to fare better in terms of profit.

It’s a mixed bag for those who fill the shelves of these stores. On one hand, the companies are spreading out the orders they are fulfilling and generate a steady stream of income. This isn’t affected by seasonal highs like they once were. But as the season approaches an end, it is forcing them to find outlet stores to ship their products off to. This makes it dicey when they’re trying to properly stock their shelves.

Wal-Mart and Target haven’t made things easier on these department stores either. Before the major retailers hit towns, places like Sears and J.C. Penney’s were the go to stores when you need inexpensive clothing and home goods. They were on the low end, but they were still prestigious. Today, those who want chic and fashionable turn to Target, while Wal-Mart is the solution for home goods. As time has moved on, the low end department stores like Sears have experienced a significant hit. In fact, Sears is a shell of what it once was, other options like Kohl’s are further impacting the success they have.

But it isn’t all doom and gloom for department stores. Some stores like Nordstrom, Fifth Avenue and similar stores have prestigious image. These stores sell to those who continue to have disposable income where they are comfortable shopping in these locations. Middle of the pack leaders like Macy’s have their name to fall back on. Thanks to the marketing geniuses of long ago, the Macy’s Thanksgiving Day Parade and Miracle on 34th Street help to keep the brand alive during the busiest time of the year. Their name reminds people of their childhood and helps to draw consumers into their stores.

But having something to fall back on, doesn’t mean that any of these department stores are out of the woods. They need to continue to find price structures and quality merchandise to get people to come in their stores. Their stores need to remain clean and welcoming, with staff who are friendly and ready to customize an experience for their patrons to come in.

In 2015 and beyond, it is imperative to give customers the one thing they can never have online. A personable and friendly experience where people greet them and work closely with them to find what they want and to make honest recommendations. If department stores continue to focus on delivering the social needs of the customer, they will continue to survive for years to come. All while reminding their employees, the customers do have another choice online. But the experience they have when they come into the store can help to boost their brand loyalty.

 

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Photo: Korea Biz Wire