Is Gen Y Lost to Department Stores?

Discussion
Sep 17, 2010
George Anderson

By George Anderson

We’ve heard this song before, haven’t we? Department stores
are not getting their fair share of Gen X and Y consumers and are taking steps
to change that.

Last October, a DailyFinance report concluded that Baby
Boomers, worried about their retirements and other financial concerns, were
pulling back the most on purchases and that retailers were turning more of
their marketing attention to shoppers between the ages of 10 and 45. The same
report acknowledged that Gen Y’ers (10 to 28 years old at the time) were the
most difficult to reach because of the ever expanding media options they have
to choose from.

“The financial crisis and the recession ushered in the biggest change
in consumer behavior in 70 years, and we’re not going back,’ Nancy Koehn,
professor and retail historian at Harvard Business School, told the Chicago
Tribune
.

According to the Trib,  one of the biggest changes department
stores have made is in their responsiveness to changing fashions. Many today
are looking to follow in the footsteps of their fast-fashion competitors, such
as Forever 21, H&M,
and Zara, as they seek to grab share of the 25 and under market.

A RetailWire poll
in August of this year found that 85 percent believed that the fast-fashion
supply chain provides a competitive advantage over traditional sourcing methods.

J.C.
Penney recently launched an exclusive line under the MNG by Mango label. Mango
is one of the fast-fashion houses that Penney and others have to go up against.

Macy’s
has followed suit with the Material Girl line from Madonna and her daughter
Lourdes.

Sears is the latest to get in on the act with the announcement
that it will launch a new line, UK Style by French Connection, in 500 stores
early next year.

John Goodman, executive vice president of apparel and home for Sears
Holdings, said, “French Connection is a world leader in contemporary fashion.
This addition to our brand portfolio will significantly increase our relevance
among younger customers while strengthening our effort to re-energize our fashion
offerings at Sears. The launch of UK Style by French Connection signifies our
continued commitment to compelling fashion and great value.”

There are
other approaches, as well. Bon-Ton Stores has created an online advisory panel
of 5,000 teenagers. Barbara Schrantz, executive vice president of marketing
and sales at Bon-Ton, said the purpose is to “find out what it takes to
get them to shop department stores.” Ms. Schrantz said the chain discovered
that teenagers weren’t all that interested in exclusive brands. Instead, she
said, they were looking for stores that had the right fashions at the right
price.

Discussion Questions: Can department stores be relevant to Gen Y consumers
today? What concrete steps can retailers take towards that end?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

17 Comments on "Is Gen Y Lost to Department Stores?"


Sort by:   newest | oldest | most voted
Dick Seesel
Guest
10 years 7 months ago

I have taught a college-level class on retailing management and strategy for the past four years, and I can attest to the fact that the Gen Y age group is not shopping in most department stores–if my classroom “sample polling” is any indication. The primary driver is merchandise content: Most traditional department stores do not cater to the Gen Y customer in a meaningful way with relevant product.

Macy’s has probably done the best job reaching out to this customer, but not always in an affordable way–the Gen Y consumer is at least as budget-challenged as her parents. And the other department store competition (at least in this market, Milwaukee) is filled with “exclusive brands” heavily targeted to Boomers (e.g., Liz Claiborne at JCPenney, Breckenridge at Bon Ton Stores).

There is little question in my mind that other types of retailers–specialty apparel stores, off-pricers like TJMaxx, e-commerce sites–are providing the kind of relevance and execution that departments stores lack today.

Doug Stephens
Guest
Doug Stephens
10 years 7 months ago

What we can’t forget is that this is a generation that photographs EVERYTHING they do. The most important thing to Gen Y is that they always appear fashionable and NOT be wearing the same thing in two different Facebook albums. This puts the emphasis squarely in two places.
1. Finding the most unique and current fashion available;
2. Stretching their dollars to get the best bang for their buck.

Department stores haven’t really been able to deliver either–at least at the same time anyway. Hence the success of stores like H&M, Forever 21, Aritzia and Uniqlo.

They also like high end but that’s because the more high end something is, the fewer of their friends that are likely to have the same thing. It’s all about uniqueness.

Mark Johnson
Guest
Mark Johnson
10 years 7 months ago

Simple–understand, listen to, and engage your customers. Provide them the products they want, in the channels (locations/online, etc) that they want them, give great (high touch) customer service, feedback and interaction with the quest. Create a tribe of engaged followers who will provide you insight; that is the key to short and long run success.

Gene Hoffman
Guest
Gene Hoffman
10 years 7 months ago

When a department store retailer is used to winding a clock how can it be relevant to digitally-oriented Gen X and Y consumers seeking to differentiate at a lower cost? Answer: Staying on the cutting edge of trends but not letting your valued traditional customers realize it. The concrete steps necessary to correct this lies in how sourcing is applied and how the consumer mix is blended. It would seem Macy’s is trying to accomplish this but the jury is still out.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 7 months ago

Department stores can be relevant to Gen X because this generation is now entering the phase of marriage/kids/career climbing and being “hip” is less crucial. I don’t think department stores have ever been especially appealing to the under-30 market and have doubts about staid chains like Sears successfully attracting a younger, hipper demographic with in-store French Connection UK boutiques or social media efforts. To some extent, department stores need to wait until a consumer gets mature enough to be embarrassed to shop at a store called “Forever 21” before capturing their loyalty.

Cathy Hotka
Guest
10 years 7 months ago

Several questions:
– Parents buy some portion of clothes for Gen Yers. How well will those parents react to the company that brought us FCUK signs on the sides of buses?
– Will Gen Yers find a reason to enter a Sears store?
– Can the department store sourcing model adapt to the speed-intensive, fast fashion business model?

The stakes are high. It should be interesting to see what happens here.

Tina Lahti
Guest
Tina Lahti
10 years 7 months ago

I would recommend that department stores turn and run in the opposite direction. The cheap and trendy segment is already well covered and not by department stores. I’m sure that if Target can manage it, and they do, so can Macy’s but why would I go to Macy’s to buy something that is no better than what I can pick up at Target? Where can I go when I want something of quality? At some point we would all like a pair of shoes that lasts more than a season or a garment that wasn’t made in China. This economy has inspired a lot of consumers, in all age demographics, to look for quality over quantity. Where are these consumers shopping? In our market the choices are independent boutiques or Nordstrom. I believe that both have a bright future.

Gene Detroyer
Guest
10 years 7 months ago
The real question is not if Department stores are relevant to Gen-Y, but if stores are relevant to Gen-Y at all. I teach Master’s level international students between the ages of 25 and 35. In courses on Strategy and Change retailing is a segment that is often discussed. Without euphemism, I can say that the general consensus is “why would I need a store?”I have told the story before. Even when a student expresses that he/she would go to a store to look at a product (generally technology), they would then order it online.With regard to apparel, these students know what seems to be every fashion site. They (the women) keep up with fashion by browsing the sites. With regard to fast fashion, they will tell you that new things show up online even before they appear in the store. Online shopping is a department store in every sense of the definition. But, in the more traditional sense, I would be curious what the demographics are between Macy’s in-store shoppers and their online shoppers.
Michael L. Howatt
Guest
Michael L. Howatt
10 years 7 months ago

We also have to remember these generations grew up in the “Walmart” era. To them, that’s a department store. They can get everything they need in 1 stop and to them, the idea of shopping and comparing prices in multiple outlets is a foreign concept. To most of them, J.C. Penney, Sears, etc. is where the “old people” shop. If they want something more trendy or fashionable they they shop at one of the “cool” places. What can the more established department stores do to create Gen X & Y sales – take a page from the Target book. They seem to be the best at it.

Viki Purifoy
Guest
Viki Purifoy
10 years 7 months ago

No matter what clothing lines the major department stores like JCPenney and Sears bring on, they must find a way to dispel the myth of being the store where “old people” shop. I’m a baby boomer and I don’t shop at these department stores, because in my mind this is where my grandmother and mother shopped and that’s not cool! Plus the stores are so packed with merchandise, it is daunting to even consider looking through the racks.

Tina Lahti
Guest
Tina Lahti
10 years 7 months ago

Ok guys, reality check, the Mall of America is packed with gen X and gen Y shoppers every day of the week. I should know, I’m sometimes one of them. MOA reported sales up 9% and traffic up 4.7% in 2009. Stores are still relevant and people still go to the mall. It may not be the same mall or the same store that our parent or grandparents would go to. That shouldn’t surprise anyone.

We probably also watch The Daily show on Hulu instead of the Tonight show on broadcast TV or cable. We still watch something.

John Lofstock
Guest
John Lofstock
10 years 7 months ago

The onus is squarely on the brand to evolve to meet a new generation of consumers. Have you been in a Sears or Kmart lately? They don’t know what they are.

I was in a Kmart that had refrigerators, washers and dryers just outside its food section. It’s been a long time since I’ve done planogramming, but I can’t imagine this is something I would’ve endorsed, and I seriously doubt teens are going to feel confident finding cutting-edge fashions just across from “dishwashers.”

So it’s a host of issues, from defining themselves as a retailer, to updating their image and branding and re-merchandising stores. Department stores enjoyed their run when there was limited competition. Those days are long over.

Craig Sundstrom
Guest
10 years 7 months ago

“The financial crisis and the recession ushered in the biggest change in consumer behavior in 70 years, and we’re not going back,’

RUBBISH! In this time period we’ve seen: the demise of traditional CBD shopping and the corresponding rise of suburban malls, discounters, big box stores and the internet… whatever has happened in response to the recession has been small potatoes indeed. That having been said, the market share of traditional department stores–which in essence has been reduced to the 3 nameplates mentioned (Macy’s, Sears, JCPenney)–has been declining for decades, and none of the efforts cited inspires confidence of reversing the trend.

Ed Rosenbaum
Guest
10 years 7 months ago

Gen Y is not lost to department stores IF department stores finally start to understand how far behind they are in marketing to Gen Yers. Walk down any street on a Friday or Saturday evening and see how many Gen Yers look like what they are wearing was bought in your typical department store.
Department Stores are like the QE2, slow to change course when the change is needed. By the time they have countless meetings and more meetings, their smaller competitors have made the change. Then they ask “what happened?”

Jim Fisher
Guest
Jim Fisher
10 years 7 months ago

In truth, how relevant are they to any generation? Relevance to various population groups based on diversity of segments are much more identifiable in department stores than are generational emphasis. It appears that department stores have decided to be population segmentation relevant and not generation relevant. This is said being quite aware of the level of fashion and typical assortment offered in nearly all department stores. Tedium is the appropriate category that applies within the industry.

Lee Peterson
Guest
10 years 7 months ago

Department stores are too much of a disconnect to younger people. Poorly merchandised, under-designed and oddly pretentious, they just seem to be from a different generation to Y-ers. You know, for Mom, or Aunt Holly.

Besides, D-stores are not really great at anything, just kind of good at some things. So why not go to a place where they ARE great, like Apple, Forever XXI, Urban Outfitters, All Saints or you know, just go online. Why mess with Mom’s store when there’s a world of fantastic new things to explore.

Oh, wait a minute, I was talking about myself that last paragraph. Sorry Gen Y, we may have something in common.

Devangshu Dutta
Guest
Devangshu Dutta
10 years 7 months ago

Gen Y will grow into your department store, just give them time.

Obviously, it’ll help to stay in business until that time.

wpDiscuz

Take Our Instant Poll

How relevant are the current fashion offerings in department stores to Gen Y consumers?

View Results

Loading ... Loading ...