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Are American department stores like Macy’s, J.C. Penney and Nordstrom doomed to die and disappear with a changing consumer base in the United States?
The future of America’s department stores seems to be in jeopardy, and Fortune Magazine pieced together an interesting video highlighting the issues.
The first issue Fortune raises is millennials, everyone’s favorite scapegoat for why things from the good old days are fading away. Specifically though, Fortune writer Phil Wahba points to the out-of-date style and specialization of other chains.
“They’re having trouble getting millennials interested in shopping,” Wahba said. “It’s very old format, things aren’t experiential, they aren’t presented visually in an appealing visual manner anymore.
“For example, Ulta Beauty has taken away market share from everybody in the department store chains… because they present their products in a way that you can try and play with them. But in a department store it is very much the sales person dictating what you can try and that doesn’t fly too.”
He also points to merchandise overlap resulting in discounting, and breeding a consumer that is addicted to sales. Sales ultimately impacts their revenue as well as lowers the potential profit for a retail chain. Wahba also points to the fact that consumers are less willing to pay full price after being inundated with sales and price slashing.
Wahba things a major overhaul is the only thing that can salvage the department store.
“The same old, same old is the road to ruin for these stores,” Wahba says. “They’re going to have to look at a future of having half the size of a store fleet as they do now.
“Products will have to be presented in a much more visually appealing, interactive way then they are.”
Wahba concludes ends on an optimistic note, saying that stores could go back to the drawing board to reinvent themselves in an effort to adapt to the current consumer’s needs.
