There’s Nothing Wrong With a Good Old Department Store
By: Brin S.
Tags: Ecommerce, Shopping, Consumerism, Retail, Ecommerce Web Development

There was a large Christmas tree full of color and light, racks of beautiful dresses, makeup being applied amongst a sea of color and mirrors, and… oh the shoes. I was mesmerized by the bustling activity and friendly strangers delivering shoe after shoe for my mother to try-on. It was the early 2000s in Hong Kong during the holiday season at Lane Crawford. If someone had told me that my fascination with stores and retail would continue to today, I quite honestly would probably have believed them. But, a lot has changed since then. The term ‘department store’ has lost the glamour that younger me once admired.

In the mid 19th century, Crystal Palace opened in Hyde Park in England. It featured 300,000 panes of plate glass and a large varietal display of consumer goods from around the world. Millions of people went to window shop, in awe of the products brought to light by the new industrial world. It wasn’t long after that the American famed Macy’s opened in 1902.

A big mogul of the time by the name of Harry Gordon Selfridge, rose in ranks at Marshall Field’s in Chicago. He then brought his expertise over to the UK, where he opened Selfridges; a store that went beyond stocking shelves and focused on the shopping experience. It was the beginning of fixed-prices and the start of the ‘mixed-use retail experience’. Every department store had unique offerings; restaurants, libraries, reading rooms, child-care services, mail rooms and more. They were a place to socialize and to be entertained. As the New York Times describes the historic department store collective, “together, they elevated even the most mundane purchase to the level of so-called experience and entertainment, concepts discussed today as a breakthrough in retail thinking.” What department stores once embodied, is exactly what the retail industry today is identifying as the future.

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There is nothing wrong with department stores. There is something wrong with the neglect for experience.

Research by Retail Dive shows more than 1,000 department stores will close between now and 2023, reducing the total footprint by one fifth. We got carried away. The amount of revenue a large department store generated at its prime would have been quite incredible for a single store in its time. We got greedy. We built and built, and built some more. Yet while bricks were being laid, there were recessions, wars, and then we were bombed with the internet. It facilitated both online shopping and something that had never yet been possible — the ability to change prices in real-time. A sale was no longer once a year where staff had to run around re-tagging items. Prices were dropped in a click, and sales would skyrocket.

Sales in-store then became the only way to compete with online retail. But it took a lot more staffing to launch in-store sales, and ultimately they couldn’t keep up. As the convenience of online shopping sucked away store revenue, it became more and more difficult to recover. So rather than innovate and go after more sales, the stores cut costs. Instantly, lower quality designs, products, and experiences were evident.

Now, we’re in this so called “retail apocalypse”. The idea that in-store retail is being obliterated, negates the fact that we, as people, consume. We want things. However, we are so busy with calling cars on demand, getting groceries delivered within the day, and buying a coffee for pick-up, that the consumption of experiences has fallen to the wayside. Not because we don’t want them, but because there aren’t many out there worth our time.

We, as people, want to consume experiences, but those experiences have to fulfill our ever-changing desires.

This year brick-and-mortar apparel sales will remain flat, as shoppers spend some $73 billion more online for clothes in 2023, or a third of the total, up from 20% today. It’s not climbing, but it also isn’t declining. Retailers are starting to figure out the experiences we’re craving. Macy’s invested in B8ta and bought Story in an effort to figure out a new market model, Nordstrom opened it’s own version of a guide shop and started online pick-up in-stores, and Walmart is on a buying spree of digital brands that are mastering the physical retail experience.

However, there is a huge opportunity to re-invent the department store experience. Both for the consumer and the supplier; brands don’t want to sacrifice their margin by executing a traditional wholesale deal and consumers no longer go to stores just to purchase.

Selfridge was known for creating a department store that went above and beyond being a place to purchase clothing and makeup. It was a destination. It was worth our time. Look around for what people today spend time doing — socializing, eating and drinking, taking photos for social media, streaming entertainment. Trade the child-care center with a playground, the mail room with interactive photos ops, the sit-down restaurant with a bar, and the lounge with a work space. Or simply make it a place people want to be.

There is some evidence of this happening both in existing department stores and new ones such as Forty Five Ten and Neighborhood Goods.

With a little reinvention, department stores will make a come back. Quite possibly this year. And maybe, just maybe, it will inspire another child to follow the world of retail.

Brands

Whether you’re a department store, mall owner, or simply a stand-alone retail shop — forget selling products, and start selling experiences. The digital world might be taking away customer fulfillment, but that doesn’t mean you can’t monetize the facilitation of it.

Consumers

Buy stuff online. It’s easy and makes sense. But start exploring the retail centers and brands that get you. That understand your desire for entertainment, social media and human interaction. Trust me, they’re out there, and many more are yet to come.

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