Department stores aren’t going away, but 3 big things still need to happen

Steve Dennis

It’s been a long, slow slide for department stores. In addition, Sycamore looks to be picking at the carcass of Bon-Ton Stores and Lord & Taylor is selling its iconic Manhattan flagship to WeWork.

Department Store Shares Are Up. Your Hopes Shouldn’t Be.

Steve Dennis

Amidst reports that holiday spending was up nearly 4.9% , some optimism about the American moderate department store sector has started to creep back in. Tighter inventories, store closings and other expense reductions should lead to year-over-year profit improvements. As I pointed out several months ago , at least two major things must happen before any optimism about the prospects of any of the middle market department store brands is warranted.

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Department store quarterly performance: Better isn’t the same as good

Steve Dennis

Last week we had five major department stores report their quarterly earnings: Macy’s , Kohl’s , Nordstrom , Dillard’s and JCPenney. The main reason is that department stores failed to innovate. There is no fundamental reason why any given department store cannot not have a viable operation with hundreds of physical locations, particularly when we realize that some 80% of all products in core department store categories are purchased offline.

Nike Shows No Brand Is ‘Too Good’ For Amazon

Retail TouchPoints

Nike has forged a strong direct-to-consumer (DTC) push, aiming to cut product creation cycle times in half and uniting its web site, stores and digital products under a single team called Nike Direct. In another case that feels like déjà vu, department stores are falling on the sword. “If

Can Macy’s Revive Its Brand Through Discounting?

Retail TouchPoints

Macy’s incoming CEO Jeff Gennette revealed at the Bank of America Merrill Lynch Consumer & Retail Technology Conference last week that the department store plans on making significant changes to its struggling brick-and-mortar presence. Recently, this same store was slashed in half.

Quad Assortment and Pricing Data Illuminates Fashion Trends

Wiser

One noteworthy observation is the early adoption of the trend by large department stores, including Macy’s, Nordstrom, Kohl’s, and Target, while fast fashion retailers such as Forever 21 and Revolve Clothing arrive relatively later to the game. While it appears that large department stores such as Nordstrom and Macy’s were early participants, they’d only really begun to invest in the trend in late 2016/early 2017 when it became more pronounced.

It’s the end of the mall as we know it. and I feel fine

Steve Dennis

First, in aggregate, regional malls–and their department store anchors–have been on the decline for more than two decades. The most recent wave of disruption has come mostly from the rise of off-price and dollar stores. As growing retailers situate new stores in growing suburban areas with favorable demographics, we often witness a shift in an area’s “retail center of gravity.” Digital Retail Store closings

Ecommerce Technology: Augmenting Reality Augments the Bottomline

GetElastic

It’s the main reason why shoppers still prefer physical stores over Amazon and eBay. Ebay has partnered with Myer to create the world’s first virtual department store. Augmented reality is an ecommerce technology changing the way people buy online.

Retail reality: It’s death in the middle

Steve Dennis

Amazon, Walmart, Best Buy, Home Depot, Costco and virtually all the off-price giants and dollar stores, are driving strong growth and profits. It’s not surprising that a quick perusal of a store closing tracker features names like Sears, J.C.

2017’s most popular blog posts

Steve Dennis

Every single retail store in the US to close permanently by month’s end. Stop blaming Amazon for department store woes. Department stores aren’t going away, but 3 big things still need to happen. The store closing panacea. As is my tradition, here’s my annual recap of my 2017 posts that got the most traffic. Once again my April Fool’s Day one easily grabs the top position.

The Genesis of Holiday Window Displays

BigCommerce

The holiday season in major cities around the world is typically heralded by seasonal window retail displays put up by department stores and retailers large and small. One of the first major holiday window displays was put up by Macy’s New York store in 1874.

‘Same-store sales’ is retail’s increasingly irrelevant metric

Steve Dennis

The retail industry has used “same-store sales” (or “comparable store sales”) as a key indicator of a retailer’s health for decades. While it remains to be seen whether retail traffic declines will last forever , most traditional retailers will struggle to grow physical store sales in the face of the significant and inexorable shift to online shopping. The mostly moribund department store sector points to this new reality.

JC Penney: The good, the bad and the ugly.

Steve Dennis

Penney recently announced its fourth quarter earnings as well as plans to shutter as many as 140 stores. Moreover, Penney’s comparable stores sales fell “only” 0.7%, materially better than their direct competitors, indicating some growth in relative market share. The company also continues to experience double-digit e-commerce growth with some 75% of online orders “touching” a physical store.

Amazon and Whole Foods Did Rotten Tomatoes Spark a $14 Billion deal?

GetElastic

Customers can also sign up for periodic delivery of laundry detergent, toothpaste, diapers, paper towels and other items frequently purchased in grocery stores using Subscribe and Save. Why Buy Physical Stores? Will stores be renamed Amazon Whole Foods?

7 Hot Takes On The Death Of Traditional Physical Retail

Demac Media

So far in 2017 store closing announcements have increased 97% year-over-year. Before jumping to any conclusions, check out these recent hot takes from the experts on the rise of online shopping, and the move away from in-store purchasing.

Vend 17

Kors is the latest retail highflier to get its wings clipped

Steve Dennis

drop in comparable stores sales and a nearly 23% decline in licensing revenue. The luxury department store industry’s big stall is now well into its second year. Nordstrom’s industry leading full-line store performance has become tepid at best. Add once soaring–and seemingly invincible–Michael Kors to the list of retail brands to disappoint the market.

Retailers, Is The End Near?

OrderDynamics

Retailers and restaurants are opening 4,080 more stores than they are closing, and retail sales through July 2017 are up over $121.5B Mass merchandisers, convenience stores and supermarkets are leading net store growth. Retailers, Is The End Near?

POS 17

Retail’s Single Biggest Disruptor. Spoiler Alert: It’s Not E-commerce

Steve Dennis

Record numbers of store closings. Discount-oriented retailers stealing share away from once mighty department stores. One simply cannot ignore the dramatic share shift from physical stores to digital commerce, nor can we under-estimate the transformative effect of e-commerce on pricing, product availability and shopping convenience. The majority of physical store sales start online.

Reports Of JC Penney’s Death Are Greatly Exaggerated

Steve Dennis

Not only have they been swept up in the long-term decline of the moderate department store sector, but they also hemorrhaged huge amounts of market share during Ron Johnson’s failed re-boot. Store closings muddy the picture. Both Penney’s own store closings and those of competitors put pressure on pricing as stores liquidate merchandise. Amazon clearly has its eyes set on growing market share in traditional department store categories.

Q2 Dates and Holidays that Ecommerce Managers and Retailers Should Know

Blue Acorn

Fortunately this also means that the holiday hangover period is officially over, and grocery stores are beginning to be filled with chocolate eggs and all things pastel for Easter. Alongside the extended weekend often come sales for cars, furniture, and more retail department stores.

Here’s who Amazon could buy next, and why it probably won’t be Nordstrom

Steve Dennis

Many of the brands that are key differentiators for luxury department stores have been laggards in digital presence, as well as actually selling online. Amazon has its sights set on expanding apparel, accessories and home but is facing some headwinds owing to a relative paucity of national fashion brands, likely lower-than-average profitability (mostly due to high returns) and a lack of a physical store presence.

Optimize, Connect and Grow With the Spring 2017 Expanded Product Suite

ChannelAdvisor

According to the US Census Bureau, consumer spending in 2016 grew 16% YoY to a whopping $550 billion, and while traditional department stores saw a downturn in sales, online retailers grew by almost 11%. width="595" height="485" frameborder="0" marginwidth="0" marginheight="0" scrolling="no">. ChannelAdvisor Expanded Product Suite | Spring 2017 from ChannelAdvisor. In case you missed the news, last month we announced our biggest product update — ever. Why such a big update?

Global Ecommerce News from June 12 to June 21

Ecommerce Platforms

In recent years, it has expanded to offer shirts, suits and other men’s clothing, and has opened dozens of brick-and-mortar locations, as well as boutiques in Nordstrom department stores, a previous investor in the start-up.

Physical retail: Definitely different, far from dead

Steve Dennis

From recent headlines you might assume that sales in brick & mortar stores must be falling off a cliff. Yes, e-commerce is growing at a much faster rate, but revenues in physical stores remain positive (1%-2% growth depending on the source). Collectively they’ve announced plans to open about 3,000 stores. In fact, digitally-influenced physical stores sales are far greater than all of e-commerce.

Assessing The Damage Of ‘The Amazon Effect’

Steve Dennis

Store closings. To be fair, we should not blame department store woes on Amazon. Since I anticipate being labeled a Luddite, a Socialist and a hypocrite by some, let me acknowledge that I firmly believe that Amazon has done a lot of good for consumers by expanding choice, making shopping far more convenient and by delivering extraordinary product value. I recognize that many retailers were long overdue for a swift kick in their strategy.

3 Styles of eCommerce Navigation: A Comparison of Real Sites

Lemonstand

As a fashion ecommerce store, it’s expected to be more cutting edge and avant-garde in its site design to create a chic user experience that appeals to fashion shoppers. According to Holst, 28% guess wrong about the store, meaning a poorly designed home page lose the site a sale.

Is off-price the next retail sector to go off the rails?

Steve Dennis

While many retailers are closing stores in droves, the off-price leaders have been opening new outlets at a brisk pace while announcing plans to open hundreds of stores over the next several years. Maxx, Marshalls, HomeGoods and Sierra Trading Post, added nearly 200 stores this past year alone. In the most recent quarter, TJX saw same-store sales growth slow to 1%. Overshooting the runway on store growth.

The 10 Greatest Moments of Our Fireside Chat with Mary Portas

ChannelAdvisor

She brought in new designers, made department stores the ‘new playground’ with bars for people to meet up (after walking through the shop floor) and literally gave these stores a new avenue for sales. Markets slowly evolved into department stores, which in turn became tourist attractions (or ‘mausoleums’, in Portas’s words) rather than shopping places. Department stores can take what others are doing and do it better.

Sears must think we’re stupid or gullible. Here’s why.

Steve Dennis

And considering my last role at the once-storied brand was leading corporate strategy–where my team was mostly focused on trying to fix the mall-based department store format and making the Lands’ End acquisition work–I am far from an impartial or unknowing observer. That Sears could disinvest in stores and profitably transition much of its business online. Digital e-commerce Retail Store closings Sears

Wall Street’s Misguided (And Dangerous) Fascination With Retail Store Productivity

Steve Dennis

An unprecedented number of retail store locations are closing this year and more announcements are surely coming–though perhaps not quite as many as I suggested in my April Fool’s post. Yet much of the way the investor community sees the need for even more aggressive store closings is wrong and, one could argue, pretty dangerous. The bigger issue is an underlying misunderstanding of the role of brick & mortar stores in retail’s new world order.

A tough agenda faces Neiman Marcus’ new CEO

Steve Dennis

Many brands, including Neiman Marcus and its most direct competitor Saks Fifth Avenue, have struggled to grow both top and bottom line as core customers “age out” of peak spending years and very few new store locations exist. seem to value the core elements of the luxury department store experience. In fact, literally all of our comparable store growth in the prior 5 years could be explained by the growth in average unit retail.

Small is the new black: Nordstrom ‘micro-concept’ edition

Steve Dennis

First, at 3,000 square feet, the pilot concept is dramatically smaller than a typical Nordstrom full-line department store. Nordstrom joins a growing number of brands shrinking their footprints and once online only brands delving into the physical realm with small box stores.

Future of Ecommerce: How Small Retailers Will Change in 20 Years

Blue Acorn

Mom and Pop stores, once the bread and butter of the retail world, are all but becoming relics of a former time. As large retailers and big box stores sprawled across the country, undercutting prices while offering more inventory, smaller niche retailers simply can’t compete.

Luxury retail hits the wall

Steve Dennis

Nordstrom, which was once a shining star in the retail pantheon, has seen five straight quarters of declines in its full-line stores. But the problems in the luxury market go deeper, particularly among the department store players. With e-commerce maturing–and most recent reported gains merely channel shift–unfavorable demographics (see below) and very few new store openings, luxury brands are struggling to replace the customers they are losing.

WWD: What Net Neutrality Means for eCommerce, Consumers, Retail

Dynamic Action

‘With a repeal of net neutrality, the social platforms may have the capability of becoming the new department stores,’ said Sarah Engel, chief marketing officer of DynamicAction. ‘Besides Amazon, they may become the only ‘department stores’ that can afford to offer the selection of amazing brands that rotate quickly enough to satisfy the consumers’ desires.’

With Cyber Monday behind us, the real holiday shopping season begins

Steve Dennis

To be sure, the overall shift away from physical store shopping is profound, but nothing unexpected is happening, at least thus far, when it comes to this particular holiday season. Of course, some sectors–I’m looking at you department stores!–are Several chains, including Sears and Bon-Ton Stores, are facing existential crises, where a bad quarter could lead to their liquidation (or, minimally, additional massive store closings).

Sears: Dead brand walking

Steve Dennis

First, it declared it was closing 63 more stores , in a continued false notion that it can shrink itself to prosperity. Despite over a decade of strategic restructuring, huge investments in its membership program and digital capabilities, closing hundreds of its worst locations–not to mention massive store closings on the part of many of its direct competitors–the company expected to report comparable store sales declines of 15.3%

Macy’s: After Big Earnings Whiff, Here’s What It Needs To Do

Steve Dennis

” But whatever you label it, the consumer’s path to purchase has changed substantially–and with it the role of the store. And, increasingly, same-store sales are a largely irrelevant metric. If customers don’t have a compelling reason (other than price) to traffic either their website or store, Macy’s will continue to hemorrhage market share. Strategically re-imagine the store and the store footprint.

Sears’ March Toward Bankruptcy: Gradually, Then Suddenly

Steve Dennis

Sears was a pioneer in catalog shopping, the creation of the department store, the boom in suburban regional malls and the advent of powerful private brands. It turns out that Sears has been quietly closing even more stores than they previously announced. I get the nostalgic love for Sears. They even sold houses through the mail.

Sourcing Journal: Black Friday in Review: The Winners, The Losers, The Dollars and the Deals

Dynamic Action

Sourcing Journal’s article Black Friday in Review: The Winners, The Losers, The Dollars and the Deals discusses the industry’s Black Friday results: consumers capitalized on the best deals, Millennials spent the most money, and department stores underperformed.