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All About Department Stores
Arguably the most famous department store of all time is Macy’s, who opened their doors as a dry-goods store in 1858. Department stores offer a wide range of consumer goods in numerous product categories including clothing, furniture, home appliances, houseware, toys, toiletries, and sporting goods. They rose to prominence in the 19th century and are considered to have thoroughly changed consumer shopping habits. Today, the relatively new kid on the block, e-commerce, is seeing a considerable rise in popularity with around 15% year on year growth since at least 2015 and is beginning to change the conversation on how we shop at department stores.
In 2018 brick and mortar department stores achieved revenues of $149 billion, an annualized fall of around 4%, this includes household names such as Selfridges, Harrods, and Saks Off 5th. Conversely, with close to $235 billion in net sales during 2018, Amazon is a trailblazer in the new e-commerce world and is shaping the landscape of online department stores. Other big stores such as JCPenney, Walmart and Dillard’s have all followed Amazon’s example and now offer multichannel distribution via their websites.
While online sales only currently account for roughly 10% of retail sales, the move online is an exciting one which offers consumers ever lower prices as competition in the market increases. As well as this, these companies are using their online presence to raise brand awareness and entice customers into their physical store by providing services such as 1-hour in-store pickup. The e-commerce route is set to flourish, and this is underpinned by technology, with retailers offering voice-enabled searching on their products. Equally, substantial discounts on first purchases and free shipping & returns are making it a desirable option for many shoppers. The future will undoubtedly be decided by those who can successfully harmonize their brand’s image across multiple online platforms and draw people into their online store.