An radical shift in consumer psychology is threatening the future of Nordstrom, Macy's, and JCPenney

The department stores that once ruled the world are struggling to keep up with discount retailers.

An emerging trend in consumer psychology is contributing to the shift toward discounting, according to Neil Saunders, CEO at industry analysis firm Conlumino.

“The consumer mood for bargains and deals remains undiminished,” Saunders said. “In both the UK and the US we continue to see very strong demand for great value as well as for great quality.”

Consumers will happily eschew the traditional merchandising, displays, and organisation for cheaper products. Discount retailers have a no-frills approach, allowing them to pass savings on to the consumer.

Unlike cheaper department stores like JCPenney and Kohl’s, TJ Maxx sells brand names like Rag & Bone and Versace that are usually found at Nordstrom.

Macy’s same-store sales declined 2.6% in the second quarter, and the company blames consumers who are increasingly hesitant to pay for brand name clothing and handbags.

In decades past, consumers shopped the malls for the best brand names. But with even Duchess of Cambridge Kate Middleton being spotted shopping at TJ Maxx, the stigma of discount shopping is gone.

Macy’s and Kohl’s are both in the process of launching lower-priced outlet stores.

TJ Maxx is a discount retailer, but that doesn’t mean it touts sales. Instead, management floods the stores with new merchandise to keep customers coming back.

The company also works to have a wide product assortment while offering very few of each item. This gives customers a sense of urgency and entices them to buy, according to Fortune.

Retail expert and author Robin Lewis writes on his website that consumers will not pay full price because they have become addicted to promotions.

“With coupons, discounts, loyalty points, and gifts-with-purchase more the rule than the exception today, consumers are spending less because they can,” he writes.

Department stores will have to adapt to this shift in consumers.

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