Posts Tagged 'Dillards'

Department stores’ search for relevance

From a recent RetailWire blog post, I have some comments about the continuing struggles in the department store segment. Some of my concerns are based on the relevance of their merchandise content, and some are based on the “sameness” of the shopping experience:

There are two key “relevance” issues, especially pertaining to traditional department stores: First, are retailers using all of the technological tools at their disposal to enhance their brands? Are they leveraging today’s tools (mobile payment, RFID, and so forth) to improve customer service or simply to cut costs? And how has “omnichannel” (especially BOPIS) actually eroded the shopping experience? There is very little difference between shopping at Macy’s or Dillards today compared to 30 years ago, other than UPC scanning and more sophisticated POS terminals.

Second — and it always comes down to this — is merchandise content. I’ve shopped a lot of traditional department stores over the last few weeks, and I’m struck by how much inventory and square footage continues to be devoted to dressy career apparel for men and women. This may be the retailers’ sweet spot (as they see it), but the lack of adaptation to change is concerning. Do these stores not recognize that Boomers are retiring — and leaving the workforce — in droves? Do they not see that most Millennials are working in more casual environments and are shopping elsewhere for their wardrobe needs? (Add to this the slow reaction to the movement toward activewear-as-sportswear.)

Sometimes achieving “relevance” costs money — whether through new tech tools, more payroll or a fresh coat of paint. But mostly it’s about the products, brands and trends that stores choose to put forward.

More on “Black Thursday”

I published the following comment on RetailWire a couple of weeks before Thanksgiving. In hindsight, it’s apparent that early openings only cannibalize Friday sales. (More on a later post.) My point of view:

The relevance of earlier (and earlier) openings will fade as more stores provide ways for shoppers to “buy online, pick up in store” in the future. (Not to mention, the continued growth of e-commerce and m-commerce to begin with.) But, for now, the stores racing to beat the clock are just gearing up their BOPIS efforts. As long as there is peer pressure to open earlier and earlier, we will inevitably see stores open all day on Thanksgiving in the near future.

The stores choosing to stay closed on Thanksgiving Day are making a more vocal effort this year to align their decision with their brand. Costco has always led the way, since they also close on several Federal holidays throughout the year, but it’s significant that stores across the retail spectrum — from Dillards and Nordstrom to TJX to big-box stores — are keeping them company.

Macy’s: Finally on a roll

Macy’s seems to be heading into a period when it is finally putting the merger-and-consolidation issues in the rear mirror so that it can focus on merchandising initiatives–many of which seem to be paying off. It is also in a position of significant strength compared to its key department store competitors–not only JCPenney but especially regional laggards like Dillard’s and Bon Ton Stores. If anything, it’s repositioning as a more “upmarket” store than its competitors is paying off as the economy slowly revives. There are still plenty of merchandise content and execution challenges, but Macy’s is heading in the right direction.

Reinventing the regional mall

Lots of commentary at today’s RetailWire about regional malls, and efforts nationwide to breathe some life into them. My contention is that the “reinvention” is long overdue, considering the slow decline of the traditional department store mall anchor:

There are several key trends driving the decline of the regional mall: First, retail consolidation in the traditional department store segment means there are simply fewer tenants to occupy all of the “anchor” space without subdividing it. Second, the department store segment overall continues its long-term share decline…whether you’re talking about “super-regionals” like Dillards or mid-tier merchants like Sears. Third, the growth of value-oriented and aspirational concepts over the past 20 years (power centers, lifestyle centers, etc.) has made it harder to sustain interest in the “one-stop shopping model” of a regional mall. Finally, many regionals were built during the 70’s and 80’s in inner-ring suburbs that are now miles away from most cities’ population growth.

So mall developers simply have no choice but to reinvent themselves with new tenant mixes. The best thing they can do to ensure a viable future is to imitate other successful concepts…through the addition of dining, entertainment and off-price retailers (including discounters and “big boxes”). Simply hoping for the rebound of the traditional mall anchor — because they used to be the biggest traffic draw at the mall — isn’t going to make it happen.

What’s the matter with Macy’s?

Almost every retailer reporting its 1st quarter profits has shown a decline from 2008…some not so bad, some severe. In almost every case (JCPenney, Nordstrom, Dillard to name a few) the earnings have beaten expectations regardless of the weak comparisons to last year. Here’s the bottom line: Almost every one of these companies delivered a profit in the 1st quarter.

There is one notable exception, the biggest department store retailer in the country: Macy’s. The company reported a substantial loss for the quarter, whether you count their typical “one-time charges for restructuring” or not. (They have made this an art form over the years.) Their CEO announced today that the recent division consolidation will bring $400 million in savings…in 2010. Clearly Macy’s has not been nearly as nimble as its competitors in managing its costs and inventories “down” to reduced demand.