Department Stores

Department stores trying to recapture their appeal to consumers are making plans to provide more experiences like spas and restaurants, and offer exclusive selections to transforms the store into more of a destination.

With shoppers increasingly buying online or from niche retailers and discount stores, the onetime pillars of retail are trying to rethink their business to keep up with consumers who want a different experience in stores than they find on their phones. That includes more attentive sales staff, pampering guests with beauty treatments and bringing in new kinds of merchandise.

Macy’s announced plans Thursday for re-creating Macy’s physical store presence to adjust to customer tastes. It reported another quarter of falling profits and sales, though it said some moves like sprucing up its fine jewelry area and adding back some sales staff are helping.

It also said it’ll close 100 stores early next year on top of the 40 it closed this spring.

The company, which is preparing for a new CEO to take over, has also launched its own off-price chain and is testing an artificial intelligence tool that would free up sales assistants to provide higher levels of customer service.

Macy’s had been a stellar performer after the Great Recession but has seen slower sales growth in the past year and a half. Under Lundgren, the company looked for growth opportunities like buying upscale beauty brand Bluemercury and is adding services like same-day delivery.

The changes come against the backdrop of declining sales and customer traffic. Kohl’s Corp, which saw total second-quarter sales drop 2.1 per cent even as cutting expenses helped its profit, is similarly testing off-price stores, smaller-format stores, investing more in e-commerce and sprucing up its beauty business.

Nordstrom, which reported revenue of $3.65 billion for the second quarter, meeting Wall Street forecasts, has scaled back on inventory to meet lower sales. But it’s also focusing on brands that have limited distribution like Ivy Park and Madewell.

It’s also personalizing its online services — this fall, it’s testing a mobile feature that lets customers reserve products online and try them on at the store. And J.C. Penney, set to report Friday, has brought back major appliances, after abandoning that category 30 years ago, to lessen its dependence on clothing.

Saks Fifth Avenue is renovating its Manhattan flagship location, with a new layout that encourages more browsing and that makes room for expanded beauty offerings such as brow bars. Elements of that renovation will be incorporated across other stores, Metrick said.

Saks also just rolled out new technology from a startup called Salesfloor that delivers personalized service for its online shoppers.

Ken Perkins, president of research firm Retail Metrics, says the latest reports are somewhat encouraging, but department stores have far to go.


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