What will it take to make department stores relevant again?
The flurry that was Shoptalk is over as 8,000 retailers and brands headed out of Las Vegas last week. While there were a lot of announcements and lightbulb moments, one thing was apparent: Department stores, as we know them, are changing.
On the main stage, veteran leaders from Macy’s and Nordstrom shared their plans to stay relevant for the next 50 years by acting smaller and becoming nimbler than ever before.
Both legacy retailers are achieving this by substantially downsizing their spaces to accommodate new formats that are more convenient for their customers.
Rachel Shechtman, Macy’s newly appointed brand experience officer, described the chain’s experiments with “living brand labs.” Drawing on her past experience at STORY, the experiential concept store, Macy’s has opened standalone 2,400-square-foot locations in as little as nine days to implement new technology and gauge customer interest in emerging brands more quickly than ever before.
Similarly, Nordstrom Local, the retailer’s inventory-free showrooms, and its newly opened men’s store in New York City are using smaller spaces to highlight services like returns, pickups and alterations.
Erik Nordstrom, President of Nordstrom, explained how highly cost-effective Nordstrom Local is because returns come back twice as fast.
Despite pioneering these newer formats, Mr. Nordstrom still thinks that the retailer is too slow. “We need to move faster; public or private it’s the same,” he said. “In retail, how do we learn quickly? How do we get a lot of tests out there and move in a very agile way to what the customer is telling us?”
The importance of “connected” stores was not ignored during the session with both retailers confirming that 50 percent of customers use a mobile device to support their journey in the store and online.
“We’re famous for our front windows, but this smartphone is our front window now,” said Ms. Ramsey, Macy’s chief digital officer. “Our app customer is our most loyal customer.” And with 50 percent of customers using a mobile device to support their journey in store and on the web at both retailers, it’s apparent that these investments are going to pay off.
DISCUSSION QUESTIONS: Do you think the changes being made by Macy’s and Nordstrom indicate a brighter future for department stores or do these retailers and others still have a way to go in establishing relevancy with consumers? What do you think department stores will look like in 10 years?