An Asian Chinese woman shopping for clothes in a clothing store
Large department stores are looking for guidance on how to operate in this digital environment. Their future has been questioned by experts who see both activists and even owners trying to deprive them because there seems to be less need for the emporiums of yesterday.
This blog attempts to highlight some of the flaws that are undermining the success of department stores.
1. Many bosses. We see this very often in many of these chains. When looking at the composition of Macy’s, it turns out that there are 9 chief executives; each one has a nice office, a nice secretary and a huge salary. In contrast, look at TJX Corp. and you will see many Indians (compradors), but few demand the benefits that a chief would receive.
two. Very long delivery time. It takes Amazon
Amazon
3. Unproductive stores. There is no need to have unproductive stores that reduce profits and distract management. Macy’s will get rid of weak units by the end of 2026. Why wait? Digital companies will take their place unless they take action now.
4. Pop-up stores are not optimized. One of department stores’ new efforts is pop-up designer stores. The problem is that loyal customers are unaware of the “pop-up” effort as there is no advertising. I remember when Macy’s curated a new designer or a new trend with ads, displays, and fanfare.
5. Minimizing is not the answer. Bloomies and Mini Macy’s will only be effective if a large number are open for business. The few units signal success, but do not have successful financial results. If Macy’s opened 100 mini-stores, it would make a good impression on shoppers, investors and its own management. But opening so many stores in a short period of time would require new staff and a recognition from management that the company has changed. I don’t see most retail management teams ready to move in this direction.
6. Private labels are not the answer either. Many stores have a private label program. While some private labels are very successful, many others lag behind in style, design or acceptance. Department stores should focus on national brands whose advertising conveys credibility with customers. Private brands that survive must be of quality and represent unusual values and savings.
7. Investor relations are not well managed. All retailers – not all companies – want to be loved. Many companies make it difficult for investors or analysts to talk to someone in charge. If a company changes, there should be a spokesperson to help analysts, investors and journalists easily understand the change.
8. Customer service often falls short. Improving service is a difficult task. Most stores offer casual, inattentive service. Perhaps because it is difficult to find staff or because the staff has aged and started to value customers. Either way, this leaves customers without support. It’s a rare situation – like the one seen at Nordstrom – where associates are encouraged to call customers at home when they receive new arrivals in footwear and other departments.
POSTSCRIPT: I am fully aware of the need to make an increasingly greater profit in the enterprise. I am opposed to constant sales as a response; There are ways to promote buyer interest in merchandise without shouting sales. If sales are necessary, make them distinctive events.
Department stores were born as merchant families became bolder and expanded their assortments into more classifications or departments. The future must now be in the hands of professionals who can reconcile the competing priorities of consumers and investors. Retail leaders must create assortments that drive superior sales while simultaneously delivering acceptable financial results.
