Major department stores are facing challenges in the digital age, with experts questioning their future viability. The issue of too many chiefs within these chains is highlighted, with Macy’s having 9 chief executives, while other successful retailers like TJX Corp. have a more streamlined structure with fewer top-level positions. Additionally, department stores are struggling with long delivery times compared to online giants like Amazon, leading customers to opt for quicker online purchases rather than visiting physical stores.
The presence of unproductive stores within department store chains is a major issue, with Macy’s planning to close weak units by the end of 2026. Pop-up shops, a new strategy being employed by department stores, are not being effectively marketed to loyal customers, leading to missed opportunities for engagement. The idea of minimizing stores or opening smaller locations like Bloomies and Mini Macy’s is seen as ineffective without a significant number of locations being established to make a real impact in the market.
Private labels, a common offering in department stores, are also facing scrutiny as many are not keeping up with current trends or customer preferences. The focus on national brands that carry credibility with customers is suggested as a better strategy for driving sales. Investor relations within department stores are criticized for not being well managed, leading to a lack of communication with important stakeholders like investors, analysts, and journalists.
Customer service is identified as another area where department stores are falling short, with many stores having lackluster and inattentive service. The importance of enhancing service to retain customers is highlighted, with examples like Nordstrom’s proactive approach of calling customers at home to notify them of new arrivals. Ultimately, the future success of department stores will rely on the ability of retailer leaders to balance the needs of consumers and investors, while also delivering assortments that drive sales and profitability without relying solely on constant sales events.
