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From eyelash extensions to a ride on a slide —department stores rethink what it means to have it all

From big names like Neiman Marcus to new names like Fourpost, department stores are revamping for a new age of shopping. Read More...

The Neiman Marcus location at The Shops & Restaurants at Hudson Yards offers a performance space that can accommodate up to 100 people, space for cooking classes, beauty services including eyelash extensions, and museum-quality pieces of art.

There’s also high-end clothes, shoes and beauty products to buy, but the store isn’t simply wall-to-wall merchandise. It’s a refreshed take on the department store, which may be just the thing that will get people back in these large retail emporiums.

As with all parts of the retail sector, department stores have felt the pinch caused by the shift to e-commerce and the growing preference for experiences over “stuff.”

Moreover, the traditional “everything for everyone” approach falls short when compared with the likes of e-commerce giant Amazon.com Inc. AMZN, -0.76% whose “endless shelf” has become the first place nearly half of digital shoppers go to start a product search, according to eMarketer data.

Read: Hudson Yards offers shoppers a look at the mall of the future

“The old retail strategy used to be assortment and availability,” said Brendan Witcher, principal analyst at Forrester. “The internet put a big crunch on that. The internet carries everything. You’re never going to have a bigger assortment than the internet. Store assortment and availability is no longer a competitive advantage.”

To compete, department stores are upending their mission and purpose, focusing on a retail experience that incorporates the most important and potent buzzwords in retail today: personalization, curation and engagement.

“They’re turning from places to transact into places to interact,” said Witcher.

To be sure, this doesn’t mean that shoppers don’t want to make purchases in stores anymore.

“No one wakes up and says I’m an online shopper from here on in,” Witcher said.

A March report from Moody’s shows that fourth-quarter 2018 same-store sales were up at Macy’s Inc. M, -2.30% Dillard’s Inc. DDS, -0.61%   (both up 2%), Kohl’s Corp. KSS, -0.49%   (up 1%) and Nordstrom Inc. JWN, -2.00%   (up 1.7%).

Still, shares of Macy’s are down more than 14% over the past year, Dillard’s has slipped 7.7%, and Nordstrom has tumbled 11%. Kohl’s stock has rallied 14% for the period, outpacing the SPDR S&P Retail ETF XRT, -1.21% which down 0.4% for the period, and the S&P 500 SPX, -0.61%  up 8.3%.

These retailers are taking steps to ramp up offerings that will drive traffic. For example, Kohl’s has partnered with Amazon on returns. And Nordstrom has launched Nordstrom Local in Los Angeles, stores that don’t have inventory on hand.

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In addition, the movement between e-commerce and in-store shopping has become increasingly seamless.

“Traditional retailers and digitally-native brands both recognize the need for a compelling omnichannel experience,…with the future of brick-and-mortar retail seeming to hinge on compelling experiences (in-store services, events, ‘Instagrammable moments,’ sales associates that are ‘educators’ rather than solely sales-focused, etc.) and digital success to be driven by the ability to personalize and customize the consumer experience,” wrote Wells Fargo analysts in their wrap-up of top takeaways from the March Shoptalk conference.

According to Forrester’s Witcher, the key is providing a relevant experience.

For Mark Ghermezian, founder of Fourpost, that means bringing together a group of brands and events that cater to the many forms of the modern family. At the Mall of America location, Fourpost has broken down a 10,400-square-foot space into “studio shops” that feature a rotating set of brands, inventory, food vendors, and other attractions.

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Fourpost isn’t just designed to provide merchandise and information to shoppers. The company also shares data with vendors about how their business is doing.

“It’s a new take on the department store,” said Ghermezian.


Fourpost is a “new take on the department store” focused on families

Showfields in New York also brings together a diverse group of constantly-changing brands, everything from pet products to artwork, with the goal of introducing online brands to customers, or simply giving customers familiar with a brand the chance to touch and feel the product.

“It solves for helping to find cool things,” Tal Zvi Nathanel, chief executive of Showfields, told MarketWatch.

It also gives companies the chance to showcase their brands in a way that makes sense for them.

“What would a store look like if we take everything online and put it in a store?” Nathanel asked.

Nathanel can speak at length about Showfields’ roots in iconic department stores from around the world. But rather than categorizing Showfields as a new take on the department store, he calls it “new retail.” Showfields not only provides a place to purchase things, but to come across new items serendipitously, via a layout with lots of hidden corners.

With an eye towards providing a unique experience, art installations in late March allowed visitors to jump into a mound of pillows and see the world, literally, through different lenses.

Then there’s the winding slide that will take customers from the third to the second floor.

“The number of slide rides isn’t on your P&L,” said Forrester’s Witcher. “What companies need to do today is create relevant value-added experiences.”

Perhaps for Showfields, that’s a slide; at Fourpost, that’s a toddler-focused event; and at Neiman Marcus, it’s attending a podcast taping before trying on a designer dress.

Shoppers can now experience it all at their local department store.

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