Is This the End for Some Department Stores?

John Krautzel
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Department stores have long been a staple for on-the-go shoppers looking to buy all their apparel in one place, but the retail landscape is quickly changing. Due to the rise of online shopping and changing customer needs, several long-time stores might be on the verge of extinction.

Death by Digital Sales

In an age when customers can buy anything with a few taps of a smartphone, flocking to department stores is becoming a thing of the past. The format of online shopping allows customers a greater opportunity to fulfill their need for newness and uniqueness due to the larger variety of available brands online. This places even department stores' online divisions in a tight spot. On top of this, consumers can quickly compare prices to find the best value, taking away from the department store discount mentality that has historically driven many shoppers to the doors of brick-and-mortar stores.

Department Stores in Decline

This trend has put several large department store chains in danger. Macy's CEO Terry Lundgren has already announced that the company is planning to open discount outlets featuring its most popular brands. The idea is to see if these outlets outperform the traditional Macy's stores, potentially replacing them altogether. Macy's reported weak earnings in 2016, and other department store giants, such as J.C. Penney and Nordstrom, are also in trouble. In 2016, Macy's saw its biggest one-day sales loss since 2008, and J.C. Penney's stocks fell 10 to 15 percent, according to CNBC.

What Can They Do to Stay Relevant?

One strategy department stores can initiate to get back their customer base is to place a greater focus on exclusivity and uniqueness. For instance, they could invest in exclusive brands sold in smaller venues controlled by the department store, even placing these shops inside the store itself. The key is to focus on brands that can hold their own in the market and have their own identity. This allows companies to capitalize on the need for uniqueness that millennials and generation Z customers crave.

Another strategy is to open smaller stores with a narrower selection of brands curated for the target customer base. Companies should choose brands that are exclusive rather than those available worldwide, which have left a poor impression on consumers over the years.

Lastly, companies should never shy away from taking risks. With the shifting tides of commerce, it's clear that playing it safe is no longer an option for many major department stores. Implementing fresh ideas and getting in on new retail trends can make all the difference.

Amid obvious signs of decline, department stores have to make some changes to keep their customer base growing or steady. Fortunately, with the right strategies, big retailers have a chance to make a comeback. This might not be the end for department stores after all.

Photo courtesy of Stuart Miles at


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