- Department stores are no longer in their heyday.
- Many department stores have had to close locations this year, including Sears and JCPenney.
- There are multiple factors hurting department stores’ business, such as the rise of online shopping and declining foot traffic to malls.
- We visited locations of most major department stores this year and found one rose above the rest.
Department stores have had a rocky 2018.
There are a few reasons department stores had such a difficult year. The rise of e-commerce has created a major obstacle for department stores, many of which have been around for more than 100 years. Stores are being forced to face up against giants like Amazon and Walmart, and many are coming up short in their e-commerce offerings.
As a result of more shoppers turning to online stores, there’s also been a decline in foot traffic to malls. Many mall-based department stores have been hit hard from the decrease in shoppers.
A disappearing middle class has also taken a toll on many mid-tier department stores. Shoppers are either looking for luxury products or looking for off-price, budget options. As a result, department stores that don’t fall into either of these categories are struggling to win over shoppers.
But some have managed to overcome the obstacles that are being faced by most department stores. Macy’s and Nordstrom both reported growth in the most recent quarter, with Macy’s reporting comparable sales were up 3.1% in the third quarter and Nordstrom reporting comparable sales were up 2.3%.
We visited many major department stores in 2018, including Sears, JCPenney, Lord & Taylor, and Macy’s. Here’s which store was in the best shape:
Kmart and Sears had a particularly difficult 2018. In October, the stores’ parent company Sears Holdings filed for Chapter 11 bankruptcy protection.
We visited multiple Kmart and Sears stores throughout New York City this year. We visited some locations more than once. The stores were consistently messy.
Each time we visited the Kmart store in Penn Station, it was cluttered …
… and usually, it was pretty dirty.
The Sears stores that we visited weren’t a lot better. The Sears we visited in Brooklyn, New York, was pretty messy.
And when we went to Sears in Jersey City, New Jersey, we encountered a lot of the same problems.
The stores were disorganized, and there were no shoppers in sight.
JCPenney was another underwhelming department store to visit.
The store was extremely crowded with shoppers and cluttered with merchandise.
It was also very messy. In the third quarter of 2018, JCPenney reported comparable sales decreased 5.4%.
Lord & Taylor was also very cluttered when we visited its former flagship store on New York’s Fifth Avenue.
The store we visited was in particularly bad shape because it was so near closing …
… but parent company Hudson’s Bay, which also owns Saks Fifth Avenue, said it expects to close up to 10 of its nearly 50 Lord & Taylor locations through 2019.
Nordstrom is doing better than its fellow department stores, reporting comparable sales were up 2.3% in the third quarter.
The store we visited in Westchester, New York, was in better shape than many of the other stores we visited. It was clean, well-organised, and had more shoppers than we saw at other stores.
But Macy’s was the best department store we visited in 2018.
When we visited the store’s New York flagship on 34th Street, it was busy with shoppers, had a ton to offer, and was spotlessly clean.
Though the brand started the year off by closing stores, it was able to start turning things around. Macy’s reported comparable sales were up 3.1% in the third quarter, marking its fourth consecutive quarter of growth.
Source: Business Insider
Macy’s has been making some major changes to help it turn things around, especially when it comes to e-commerce.
The department store chain has been improving its mobile shopping platform, rolling out services such as mobile checkout, and even looking to bring augmented reality to its app to enable customers to virtually try on beauty products at home. Macy’s is also testing pickup lockers similar to Amazon’s in an expansion of its buy online, pickup in-store program.
Source: Business Insider
Macy’s has also been expanding its off-price store, Macy’s Backstage. The store takes inspiration from retailers like TJ Maxx and Ross Stores.
In addition, it is shrinking its less-productive stores to help boost sales. The idea is that by having less merchandise to wade through, the smaller stores will have a more desirable shopping experience.
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