The loveable department store. So many of us have childhood memories of a special day out – a drive to the city or to the shopping centre, which would include a visit to department stores. At Christmas time, this was even more magical as the Myer Christmas windows lit up.
Then came the internet, which brought rapid innovation in retail, with online stores launching and all retailers dipping their toes into the virtual world. Fast forward to 2023, post pandemic, and the online channel is essential.
In a digital ‘always available’ world how can department stores not only keep up, but thrive?
Why go to a department store?
Despite popular belief, shoppers do visit, and intend to keep visiting, department stores. Seven in ten Australians shopped at a department store in the last month , and Myer has recently had its best sales in 20 years.
However, despite high levels of visitation and great sales numbers, positive feelings towards department stores are weak1. Much of the feedback we got was around relevance and affordability, with gifting being a main reason for visiting. And while gifting is important, shoppers need more reasons to visit department stores to drive profitability.
We know there is there is a lack of intrigue, innovation, and positivity around the department store – and it’s screaming for newness and exceptional experiences. If department stores – and indeed brick-and-mortar retailers at large - can move the dial on this, not only can they maintain recent gains, but continue to grow them.
So how do we offer department store shoppers an exceptional experience? The answer isn’t wild in-store features like robot concierges or Instagramable, aesthetic brand feature walls. The whole store, and the whole experience, needs to function to properly execute on the brand’s promise. We know retail is an ecosystem – and department stores are no different. So where to begin when redefining the department store experience?
Personality is fundamental
Brand identity is nothing new to the retail world, but department stores are at risk of losing what makes them distinctive – the reasons shoppers might align with what the stores offer and be drawn to shop there. From marketing to instore fit out to aesthetics to selection, there is little to define the experience in one store as unique from another. There used to be a very clear delineation between David Jones and Myer – in terms of offer, customer type, brands carried and instore aesthetic. Over time, these differences have softened for shoppers, and when sat side by side in a mall, these two giants can be difficult to tease apart.
This kind of differentiation, and indeed reinvention, is possible with commitment and vision. Abercrombie is a great example of a brand that had a completely different identity 20 years ago and has since done a 180 and revealed itself to be inclusive and trendy – speaking to an entirely new generation of shoppers with incredible success.
Though a slow and thoughtful overhaul, Abercrombie reinvented themselves entirely: the aesthetic and attitude of the apparel, the design calendar, vendors and country of origin, and of the store aesthetic (including localisation) and footprint, not to mention the marketing. Most critically, they clearly defined the purpose and creative positioning of the brand upfront, so that all these changes stemmed from one foundational concept. These changes to the brand DNA meant that Abercrombie scored some of its highest operating margins in the last few years.
Omni is the cost of entry
Omnichannel operations are a must for brick-and-mortar retailers – and especially department stores. A seamless omnichannel experience has become the ultimate way to serve customers effectively, and proper integration of these channels also gives retailers better control across channels. Great omnichannel experience can build loyalty, spend, and enable retailers to be more and more agile. Thinking holistically about how your customers shop instore, on a phone, on an app, or on a laptop, can make department stores the best option for shoppers.
Digital is also a great way to enhance community – great retail apps go a long way to connecting shoppers to brands, experiences and each other. Athleta is a fantastic example of a retailer that leveraged its online community to build brand awareness and spend.
Shifting experience and the physical space
As the “departments” of department stores continue to shrink, how can retailers leverage the more limited selection? There are certain benefits to a smaller selection – it avoids a paradox of choice. Sometimes there are simply too many options for shoppers to make decisions.
Importantly, department stores now have the opportunity to curate their selection to their customers. In doing so, the experience becomes more personal, and shoppers love nothing more than feeling as though they are being catered to. Great buyers are key here – the selection needs to fit the brand identity and appeal to consumers.
Importantly, helping customers to enjoy their time instore capitalises on the sentiment that going to the department store is an outing. An activity on the weekend, as part of a larger trip to the city or to the shopping centre to physically see and touch items, used to be common practice 10 years ago. New research from Monash University points out that post-COVID lockdowns, bricks-and-mortar shopping is seeing a surge in popularity.
Good help is hard to find
Good service – and good connection – keep people coming back to brands. Sales associate education and engagement is incredibly important here – a sense of camaraderie among staff that extends to shoppers means that shoppers feel included, and like they are amongst friends (that will read their needs, even if that means being left alone to browse). There’s a reason clienteling (a technique used by retail sales associates to establish long-term relationships with customers based on data about their preferences, behaviours, and purchases) works. Sales associates become trusted sources of newness and advice, personalised to the shopper.
Most importantly, a properly informed and brand-educated sales associate is worth their weight in gold. Sales associates have to be helpful. Shoppers need help navigating department stores. Online, shoppers can filter for black workpants, but in a department store, I need help. An informed and helpful associate is crucial to a shopper finding what they need and picking up a few other suggested items along the way. Careful consideration about the ways we educate sales associates about the range, and ways of selling is crucial to a great department store experience.
Holding events or classes on styling with trusted sources, or creating interesting capsule collections and recommendations are also ways to engage shoppers in a department store on a different level. This can also connect back to omnichannel and online communities, again creating a holistic experience across all touchpoints.
Over the last decade or so, there have been attempts by department stores to implement a selection or handful of these things, but this is not a one-and-done solution. Purpose, image and experience invigoration is required to usher in a new era of what the department store means to shoppers.
 Nature Mini Poll, n=420 Australians
Madeleine Berenyi, Senior Associate Director, Nature
Madeleine has over 10 years of local and global experience in CX, UX and retail. She transforms customer experience with custom, data-driven strategies that deliver significant results for her clients at Nature.
Arletta Turnbull, Director, Nature.
Arletta is a seasoned insights specialist with 15+ years of experience across global, boutique, and technology agencies. At Nature, Arletta leads a high performing team of experts that work with clients to discover ‘new knowledge’ and build the best experiences, products and innovations possible.