The decline of department stores has affected virtually every store name in the market in recent years.
As noted in a recent report by PricewaterhouseCoopers, “the last 20 years have seen the sector struggle in light of new competition, rapid industry consolidation, a pervasive internal focus, and changing shopping patterns.
“Today, most conventional department stores are competitively vulnerable,” the report continues. “Consumers increasingly prefer retailers that offer sharper everyday pricing, more focused assortments, easier to reach store locations, and a simpler shopping experience.”
Department stores have had limited opportunity to recoup market share by opening new stores. Dismal as all that might sound, however, the decline has been uneven, and many stores have maintained strength in particular departments, notes R. Fulton Macdonald, president and CEO of International Business Development Inc., a New York-based consulting firm specializing in retail.
“On the home furnishings side, Bloomingdale's provides excellent selection and excellent customer service,” Macdonald says. “Neiman Marcus delivers good customer service. Nordstrom has put one of its traditional strengths — shoes — on the ’Net. Macy's juniors department is excellent.”
“Department stores have to identify their strategic advantages. Why do they exist? Why do people come to these stores instead of going elsewhere? Then they have to protect those strengths. They have to preserve their core at all costs.”