The Departure of Department Stores

By Revekah Echols

In the last few years, department stores have become a thorn in the side of the fashion industry

The once pre-eminent retail bastions, which stood as the gold standard of the industry, began to tarnish in recent years, tumbling toward irrelevance and insolvency and threatening to end more than a century’s reign as the mantelpiece of fashion.

With luxury retailers like Bloomingdale’s (owned by Macy’s Inc.) and Nordstrom posting nose-diving losses in stock trading, as well as Saks Fifth Avenue and Texas luxury giant Neiman Marcus in talks of a merger, what is happening to big box luxury?

The history of the department store spans back to Europe more than 200 years ago with the rise of the upper class, who developed a taste for luxury and fashion. Harrods and Selfridges & Co in England along with Au Bon Marche and Printemps in France were among the first department stores in existence. Carrying a broad range of categories, split into “departments,” these stores had the dollars, manpower and clout to bring the finest goods from around the world into the hands of conspicuous consumers.

Even until the last decade, department stores provided the biggest opportunity for a designer in terms of exposure and revenue. They served as a reliable bellwether of trends and a flagship that specialty stores could emulate. But of course, technology has become the last stand between tradition and progress. For a while, department stores used their financial backing and resources to create online shopping sites as a tool to sell what was in store but also to augment their offerings, much like the shopping catalog of yesteryear.

But there was too strong a dissociation between the two experiences of shopping, most of which was the interactive element. Shopping at Neiman Marcus was a sensory and sentimental experience. Shopping on neimanmarcus.com was a faceless, two-dimensional event, void of relationship and environment. The online store kept the look and some of the incentives of shopping in-store, but there were elements missing, even if only sensed subliminally at first: the cool, softly fragranced air; the octogenarian woman in cartoonish glasses and cerise red lipstick behind the cosmetics counter; the hum of talking, escalator motors, footsteps and tenor saxophone solos.

Of course the polarity of experience was not a problem for online retailers like Shopbop or Farfetch as there was never a brick-and-mortar operation to hold in contrast. Additionally, smaller specialty stores became a reckoning force as they had the benefit of speed, rolling out new deliveries on social media platforms within minutes of receiving them, rather than waiting for weeks of scheduled photoshoots, editing and uploading.

The confluence of these forces cast a grim shadow on department stores. As time passed, they were increasingly viewed as out of touch, sluggish and obsolete.

It brings us to today, where fashion bloggers, boutiques and hundreds of other factors influence an ever-increasingly splintered set of consumers. And while everyone likes to cheer for the underdog, a few words in favor of Goliath.

The big retailers are important when looking at the fashion industry in general. First, because department stores write large orders, production must be dialed in or the designer faces enormous returns and a closed door for the next season. So for the most part, they vet designers not only in terms of their aesthetic but their ability to deliver a high quality, timely product.

Bigger orders for designers ultimately mean lower production costs, a higher efficiency rate and consequently more money to expand their product offering. And because department stores have multiple locations, all of which turn vastly higher amounts of traffic than any single specialty store, it is possible to get a true and consistent read on consumer sentiment and behavior.

Lastly, we must remember what a big store ultimately translates to: virtually unlimited selection, deep inventory, generous return policies and the ability for a customer to fill multiple needs in one place. In an increasingly busy and complicated world, convenience is more fashionable than ever.

One exception to the declining attention and revenue earned by big retailers is New York store Barneys. Since 2010, the then troubled luxury emporium, known for its edgy fashion and grand window displays on Madison Avenue, chose to leave the tide of heavy discounting and mass expansion to entice customers and arrived at 2017 in the black and steadily climbing. The key seemed to be a shifting of philosophy from being like everyone else to rooting itself even deeper in who they were, for which their slogan decried: taste, luxury, humor.

They hosted more designers in store, introduced more collaborations with musicians and local artists and decided that what their customer wanted more than a good deal was a great experience. And marching to the beat of its own drum (surely it is made of lambskin, mahogany and titanium), Barneys will sail over its year-on-year performance for the sixth time in a row.

It is a strange dichotomy, to stay the same and to be different all at once. But it is the task of almost all the department stores out there, lest they face dismal, possibly dire consequences. In the sea of sameness, a resolving of identity may be a life raft.

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