Asian Chinese woman buying clothes at a clothing store
Major department stores are figuring out how to operate in this digital environment. Experts are questioning their future, and activists and even owners are trying to take them private as the need for large commercial properties like yesterday seems to be diminishing. I’m looking at it.
This blog attempts to highlight some of the flaws that are marring the success of department stores.
1. There are too many leaders. This is common in many of these chains. If you look at the makeup of Macy’s, you’ll see that there are nine CEOs. Each has a nice office, a nice secretary, and a good salary. In contrast, if you look at TJX Corp., there are many Indians (buyers), but very few who demand the kind of benefits that the chief receives.
2. Delivery time is too long.Amazon costs
Amazon
3. Unproductive stores. There’s no need to open unproductive stores that reduce profits and disrupt operations. Macy’s he plans to eliminate weak divisions by the end of 2026. Why wait? If we don’t act now, digital companies will lose ground.
Four. Pop-up shops are not optimized. One of the department stores’ new initiatives is pop-up designer shops. The problem is that your loyal customers don’t know about your “pop-up” efforts because there’s no promotion. I remember when Macy’s would cherry-pick new designers and new trends with ads, displays, and fanfare.
Five. Minimization is not the answer. Bloomies and mini Macy’s are only effective if they are open in huge numbers. A small number of units are showing success, but revenue is not. When Macy’s opens his 100th mini-store, it will make a big impression on shoppers, investors, and executives. But opening so many stores in such a short period of time requires new staff and management recognizing that the company has changed. It doesn’t seem like most retail management teams are ready to move in that direction.
6. Private label is also not the answer. Many stores have private label programs in place. While some private labels are hugely successful, many others lag behind in style, design, or acceptance. Department stores need to focus on national brands whose advertising creates trust among customers. Private brands that survive must be of high quality and represent uncommon value and savings.
7. Investor relations activities are not properly managed. Not every retailer, not every company, but they want to be loved. Many companies make it difficult for investors and analysts to talk to those in charge. When a company changes, it needs a spokesperson to help analysts, investors, and journalists easily understand the changes.
8. Too often customer service is poor. Improving service is a difficult challenge. Most of the stores are casual and provide attentive service. Perhaps it’s because it’s hard to find staff or they’re aging and starting to take customers for granted. In either case, the customer will no longer receive support. It’s a rare situation, like the one seen at Nordstrom, where employees are encouraged to call customers at home when new items arrive in shoes and other departments.
postscript: I am fully aware of the need to demonstrate constantly increasing profits in companies. I disagree with continuous sales as the solution. There are ways to drum up shopper interest in your products without having to run a loud sale. If you need sales, make it a distinctive event.
Department stores arose as merchants became more daring and expanded their assortments into more categories and departments. The future must be in the hands of experts who can successfully reconcile the competing priorities of consumers and investors. Retailer leaders must come up with assortments that drive top-line sales while delivering satisfying returns.
