"Department stores have become retail's dinosaurs; I don't know if they'll survive," said Audrey Guskey, associate professor of marketing at Duquesne University's Palumbo-Donahue School of Business. "Department stores just aren't 'the thing' for shoppers in their 20s and 30s."
Boscov's, a Reading-based department store chain, said Monday it filed for Chapter 11 bankruptcy and would immediately close 10 of its 49 stores, including stores at Monroeville Mall and South Hills Village, blaming slow sales and the poor economy.
Battered since the 1960s by discounters, forced to compete against specialty retailers and recently thrust into doing business on the Internet to stay current, the nation's department stores are in a tenuous position.
For more than 70 years, stores with names such as Gimbel's, Joseph Horne Co., Kaufmann's and Marshall Field were popular because they were all-encompassing in their merchandise selection, experts said.
"The department stores felt they had to have restaurants, some of which made money, but many which didn't. They had to have fashion shows, sponsor parades, offer free delivery, free alterations, free baby-sitting," said Jan Whitaker, a consumer historian based in Northhampton, Mass., who has written a book on department stores.
"People used to gauge their cities by their department stores," Whitaker said. "They weren't just businesses -- they were places."
"Department stores provided an environment that was one-stop shopping," said Monica Tang, a retail strategist for consulting firm Kurt Salmon Associates in San Francisco.
The problem was, over time the chains began offering the same merchandise, the same labels. There was little, if any, differentiation, Tang said.
"Consumers began seeing all the department stores carrying all the same brands when they wanted different products and different brands," Tang said.
Smaller, specialty stores, that carry only clothes, or furniture, or shoes and offered exclusive brands became shoppers' favorites.
Then the discounters, Kmart, Wal-Mart and Target, emerged on the retail scene, giving department stores competitive pricing pressure they had not previously seen.
It took a shock to the retail industry to open department store executives' eyes to the need to make themselves different if they were to survive.
"When Federated Department Stores acquired May Department Stores (in 2005), that really shook up the department stores," said Kelly Tackett, senior retail consultant at TNS Retail Forward in Columbus, Ohio.
"That was the inspiration for changes in the department store's merchandise assortment. They began adopting the practice of the specialty stores -- offering exclusive brands and their own private brands, to differentiate themselves from the competition."
Some department stores understood being different was the only way to survive against the plethora of competitors, Tackett said. J.C. Penney Co., for one, focused on improving the shopping experience and learned to partner with other brands in categories where it wasn't strong.
"Penney's partnership with (skin, hair care, fragrance and makeup retailer) Sephora by Penney's own data shows it's brought customers into the store," Tackett said.
Today, all retailers must battle Internet shopping, retail experts said. Most chains have a Web site that allows the shopper to make a merchandise selection, order and then have their goods delivered to the home. Some retailers, such as electronics giant Best Buy, allow customers to order online, then pick up purchased items at the nearest store, saving time and money.
No one knows if department stores can survive, even with consolidation and efforts to set themselves apart. Some industry watchers say a reintroduction of top-notch service, like today's Nordstrom's, is key.
"It's very important that retailers become engaged with the consumer," said Tara Weiner, managing partner with Deloitte LLP in Philadelphia. "Key executives need to know how their associates are working; they need to work with sales associates so that they do it right. It's definitely a buyer's market out there."
No comments:
Post a Comment