Are you being served?

Why department stores could be poised for a comeback

To say that times are challenging for department stores would be a classic British understatement.

The future for both Debenhams and House of Fraser is uncertain. One analyst called this “as significant as the fall of the Roman Empire” for the high street.

But can department stores ever compete with online rivals and out-of-town supermarket giants on prices?

Or should they be going back to their own roots and restoring that once winning mix of appealing products, an attractive shop, and quality customer service?

Staff knowledge

An article in Retail Dive points out that many of the characteristics that we associate with successful start-ups were what propelled departments stores to retail glory in the mid-20th century.

Localisation, customisation, knowledge about the customer – these may be driven by AI and other technology today, but back then were largely down to staff knowledge and expertise.

Each town or city had its own stores, often branded with a family name such as the fictional Grace Brothers from 1970s sitcom Are You Being Served?

Department stores were the Amazon of their time, offering customers the convenience of one-stop shopping and home delivery.

They were also places where one might happily spend the whole day: the buildings were beautiful, and the coffee shops classy.

Mothers entrusted their children to in-store babysitting services and sat to discuss their needs with sales associates, who would bring out stock from backrooms. You could buy an item and get it altered for a perfect fit all under one roof.

Demise of the department store

It was in the 1970s and 1980s that it all started going downhill. Department stores began to give up their individuality.

In a drive to cut costs, they centralised merchandising decisions. Many moved to out-of-town shopping centres. Meanwhile, speciality stores were stealing their customers.

Above all, they cut the numbers and pay of the staff who used to help customers navigate the myriad products and services.

Marketing professor Thomai Serdari told Retail Dive: “They ultimately abandoned the white glove service to offer abundance, they focused on volume and variety, but in a way that has no soul.”

Restoring the department store

So do department stores have anything more to offer us today than summer sales and Christmas adverts?

Some are trying something new. And it looks remarkably like the offer of old.

In the United States, Nordstrom has launched a chain of local stores. Part of their appeal is simply that they’re smaller: merchandise is once more kept in backrooms rather than on display, where it can overwhelm customers with choice. They also offer home delivery and tailoring.

Meanwhile, discounter Target sells curated Private Label brands in an open, well-lit space.
Japan is even further ahead of the curve, with bookstore Tsutaya Electrics offering appliances, salon treatments, electronics and more. Muji’s latest flagship store features restaurants, groceries and even a hotel.

Experiential retail is one to watch

Some dub it ‘retailtainment’: creating an immersive retail experience for customers so they’ll leave a store with memories as well as products. Brands are quickly adopting this trend and recognising the value of offering an experience that’s both Instagrammable and endorsed organically.

Diageo, for example, is creating a flagship store (Johnnie Walker visitor attraction in Edinburgh) which will include a multi-sensory, immersive visitor experience spanning over three floors.

Variety is the spice of shopping

 So will we see a return of Grace Brothers in Britain? Only time will tell. But as retail consultant Tyler Higgins told Retail Dive: “What I hope is that they all shift in different ways. Hopefully they’ll migrate away from being all the same.”