Department stores were once places of wonderment and purveyors of latest fashions, discoveries of treasures from around the world and must go social meeting places. They became iconic establishments within any community, often defining a city or a towns landscape and its centre of all retail activity.
Ian Caulder, Founder and Director, discusses how these pivotal beacons in retail are now being challenged. As the pace of change sees sales continuing to decline since their peak in Jan 2001. Once offering an independent point view pioneered by entrepreneurs with strong visions they were a powerful force of influence among consumers.
"Now, they don’t seem to stand for anything”. Expansion to national and global markets seems to have created a generic template of sameness with a loss of heritage and identity." Americas retail research group
With the recent predicted news that online specialist Amazon is about to unseat mighty Macy’s as the largest clothing retailer, now is time for urgent re-invention. They need to become relevant again in consumers minds, destinations that people not only want to shop, but spend time in. Once at forefront of retail they have now become the follower’s as consumers and technology drive change in shopping habits. To regain control they need to start being the innovative leaders of change.
In two of the UK’s leading department stores Debenhams and House of Fraser they see the solution as focusing on consumers lifestyles and leisure experiences, rather than product as the way forward. Debenhams new boss Sergio Bucher described it as ‘social shopping’ saying that department stores are well placed to tap into selling leisure experiences as well as products.
We have looked at a few of current trends and initiatives driving change.
1. FOMO (fear of missing out)
The race is on for those brands that no one else has and exclusive products that can only be seen and brought here, playing on that fear of missing out to draw people back. Barneys have created their XO “Exclusively Ours” brands and capsules not found at other retailers. Its all about fleeting pop up’s according to Olivia Kim Creative Director at Nordstrom who says ‘spontaneity and emotion is one of her favourite things about retail’.
The phenomenal success of Pokémon Go demonstrated how technology could get people to go to the specific physical spaces you want. An example of this type of technology was Bloomingdales collaboration with New York graffiti artist Greg Lamarche to promote its limited edition autumn collection via 100 bespoke Snapchat filters. It encouraged people to explore the stores using their mobile devices and geo-triggered filters were made visible in designated hotspots. By sharing content made by the filters via direct message to the retailers account customers could win prizes.
2. Lifestyle not product
Some department stores are moving away from the notion that they are about individual departments of segmented product to building stories around lifestyle experiences. At Selfridges they have created an area around the idea of “A home for all” banning mobile devices they offer simple activities around getting back to basics such as bread making, spice grinding, fabric dyeing and loom weaving. There is also a collaboration with UK craft collective ‘The New Craftsman’ on an in store pop up based on exploring what it means to be at home. In the newly launched ‘mix & match’ design studio floor items have been merchandised by product type over brand or gender with men and women’s product sitting alongside each other.
Siam Discovery store in Bangkok has re-opened as an Exploratorium 430,000 sq. ft. of shop able installations with 13 curated themed labs of products organised by lifestyle / sector regardless of brand with such areas as Street Lab (street wear), Digital lab (electronics and gadgets) Creative lab (home ware) and Play lab (hobbies & entertainment & books)
Harvey Nichols has also moved away from segmentation of brands to more free movement of product with mixed brand shopping to create more creative story telling around looks / style curated by the store.
3. Broadcasting Hubs & Social spaces
Stores that understand that by merging their online experiences with their physical spaces they are expanding and creating one seamless customer journey. The introduction of screens, booths and links through to fitting rooms allows that continued interface that makes the store connect its media content beyond the physical confines of the space.
The Neiman Marcus personal shopping area allows you try on product with a 360 view of yourself and a chance to keep track everything you tried on side-by-side and even share things with friends through its social media network.
Macy’s in their Halloween campaign in 2016 used an interactive photo booth set up where customers could pose with animatronic mannequins and skulls in a gif photo shoot that could be emailed or posted to social media directly from the booth.
4. Food & hospitality
Ambience and cuisine can be part of building the stores ethos and personality through the right associations that relates to its target audiences lifestyle. Barneys for example saw an opportunity to combine Blind Barber and Fred’s restaurant together to provide a great social & physical destination for its male clientele.
At Siam Discovery store they see by providing social spaces that matches their consumers urban working lifestyle they can draw people into their stores. Their newly created a Discovery Hubba allows consumers to host meetings and workshops within their space.
5. Pamper to consumers needs
There has been a massive shift away from conventional beauty counters to pampering experiences to increase dwell time. There is greater focus on trends, personalisation and edited choice entrepreneurial brands like Blow who offer a beauty editorial approach to selecting the best hair styles nails & eye of the season are a great example of where beauty needs to go in department stores. Both De Gruchy & Saks have taken this lead recently in expanding their newly launched beauty halls with key intention to encourage longer dwell time with an increase in interactive pampering beauty offerings such as nail & brow bars.
Harvey Nichols have opened open their beauty department from 8am – 10pm to fit into its busy clienteles lifestyles offering pre & post work express treatments such as pick & mix vitamin injections and 15 minute LED facials.
6. Merging of Fitness & Wellbeing
With the trend for ath-leisure becoming a real fashion growth area there has been a recent merging of fitness and wellness together in many department stores.
Barneys has been tapping into key experts & bloggers such as Sam Yearsley at Soul Cycle and Jerelle Guy a real foodie and publishing this guidance on their store windows. This demonstrates how lifestyle and product can come together to create consumer connections that can bring stores alive.
Liberty’s have created a boutique wellbeing programme titled Reset, it focuses on British wellness leaders. It offers workouts and post- session brunches by yoga and breakfast pop up brand Yoga Brunch Club as well as other initiatives by the likes of Fitness club Frame, product demos by S’well, Hip & healthy and clean eating by The Detox Kitchen.
Selfridges have launched a female celebrating Body Studio along with its Thoughtful Foodies pop ups by the likes of clean eating restaurant Hemsley + Hemsley. This has also offered opportunities to offer alternative more interesting related retail product story areas. Harrods have created a state of the art wellbeing clinic based around the concept transformation with 14 treatment rooms, personal trainer studios, cryotherapy chamber, nutrition planning, sleep pattern tracking, vitamin infusions and a skin analysis clinic rooms to help advice on potential cosmetic surgery procedures.
7. Personalised Service
Increasing staffing levels giving them better training and greater knowledge through the aid of technology helps customers discover and feel they are receiving a more tailored personalised service. The advancements in technology within stores is also enabling staff to edit down vast choices from both on – line and in store to help customers navigate to the right choices.
Macy’s have collaborated with IBM to create AI Assistance an artificial shopping assistant. Sak’s use software to allow assistants to create e-commerce pages tailored to specific consumers. Barneys app uses preferences and purchase history to send multimedia content sourced from editorial blog with personal recommendations straight to the customer’s smart phone. Liberty’s uses a beacon enabling app that sends info in store about brands that the customer follows in Instagram.
8. Style over price
There has also been an important shift away from categorising by price level into one that focuses on a specific style statement; here products of a stylistic similarity are grouped together. Again this shows a focus on a more emotive level around the consumers particular preference, assuming that a consumer wants to pay more for something they particularly desire and allowing them to see all their options in one place.
This has been adopted both at Barneys and Saks stores as Marc Metrick chief Executive of Saks stated "its all designer now. People want to browse the way they do online. We’re going to de-departmentalise the department store".
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