Being Remarkable · Customer-centric · Digital · Frictionless commerce · Omni-channel · Winning on Experience

Stop blaming Amazon for department store woes

Given Amazon’s staggering growth and willingness to lose money to grab market share it’s easy to blame them for everything that is ailing “traditional” retail overall–and the  department store sector in particular.

In fact, with announcements last week from Macy’s to Kohl’s and Sears to JC Penney that could only charitably be called “disappointing” many folks that get paid to understand this stuff reflexively jumped on the “it’s all Amazon’s fault” bandwagon. Too bad they are mostly wrong.

The fact is the department store sector has been losing consumer relevance and share for a long, long time–and certainly well before Amazon had even a detectable amount of competing product in core department store categories.

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The fact is it’s just as logical to blame off-price and warehouse club retailer growth–which is almost entirely done in physical locations, by the way–for department stores’ problems.

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The fact is that, despite other challenges along the way, Nordstrom, Saks and Neiman Marcus have maintained share by transitioning a huge amount of their brick & mortar business to their online channels and have closed only a handful of stores in the last few years. Nordstrom and Neiman Marcus now both derive some 25% of their total sales from e-commerce.

Don’t get me wrong, I’m not saying that Amazon isn’t stealing business from the major department store players. Clearly they are. And as Amazon continues to grow its apparel business they will grab more and more share.

But the underlying reason for department stores decades long struggle is the sector’s consistent inability to transform their customer experience, product assortments, marketing strategies and real estate to meet consumers’ evolving needs.

More recently, those brands that have been slow to embrace digital first retail are scrambling to play catch up. Those that still haven’t broken down the silos that create barriers to a frictionless shopping experience will continue to hemorrhage customers and cash.

Most importantly those that think they can out Amazon Amazon are engaged in a race to the bottom. And as Seth reminds us, the problem with a race to the bottom is that you might win.

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15 thoughts on “Stop blaming Amazon for department store woes

  1. I rarely go into large department stores any more. They all seem to carry pretty much the same stuff, at about the same price. I seldom can find anyone to help me find something in particular that I’m looking for. I expect that if I’m in Walmart but I expect better from a nice department store. The quality of the clothing I’m finding in nice department stores certainly isn’t reflective of the price on the tag. I went into Nordstrom’s recently and was appalled at the shoddy construction of many of their garments and further appalled at what was being charged for that shoddy construction.

    If large department stores are counting on me to stay in business, they may as well go ahead and shut down right now.

    1. Well said and most of us would agree with what you said. I think what traditional retail needs to do is to change their outlook and work towards “customer centricity” in everything they do – an end to end experience for customers that goes beyond and delights you or me, and only then we would be stepping back into stores again and again.

      We are so used to personalized services in today’s age and they should be extended within the store for advice or facilitating our purchase decision. It’s not about the product everything is to do with customers that you cater too.

      1. Indeed, customer centric. Too many companies wonder where their customers have gone. The bigwigs sit in their fancy offices and spend thousands and thousands to have consulting firms run surveys and focus groups (I used to work for a market research firm). They spend fortunes on commercial advertising that’s false because the customer’s real life experience is nothing like what is seen in the commercials. Their profits start to go down and they up their commercial and consulting budgets and recoup those costs by cutting employee hours, number of employees and some customer services. Good employees leave when their pay and/or hours are cut and lower paid employees are hired who have less incentive to provide excellent customer service. And the downward spiral continues.

        Instead of spending fortunes on consulting firms, surveys, focus groups and increasingly unrealistic ads and constant “SALE! SALE! SALES!”…..Perhaps they should go into communities, into their stores and ask the customers, ask their employees what has gone wrong and what needs to be changed and/or fixed to improve customer satisfaction. I promise you the answers would be vastly different from what they get from other sources.

  2. Great comments from all!
    Fortunately, there still remain many customers that want to have a personal, face-to-face interaction with a human being. The independent retailer has an excellent opportunity to capitalize on the vacuum left by the boxes. Now, if we could only find a way to attract more people to retail that can provide the necessary experience for our customers.

  3. The customer needs are different.. Few who really have choices in mind and others who would like to explore while they shop ! The ones who shop and tags along with their families really want to explore various categories and its prudent that they get shopping experience that brings them back and even spread word to various social groups…Quality of interaction, personal touch, best of hygiene and visually strong merchandise are few enablers that brings in the so called “shoppers experience”! Amidst ecommerce as a convenience shopping experience, brick and mortar stores have lost the sheen which has an impact on foot falls…

    1. So true. While I have never really enjoyed shopping the way so many other women seem to, it used to be a much more pleasurable experience. Nowadays, most stores seem fairly interchangeable, customer service is almost non-existent, there is little variation in merchandise from store to store and little to entice me to enter their doors. On the other hand, while online shopping is easier it only works for me if I know exactly what I’m looking for. There are entirely too many things that I need to be able to see or touch or smell in person before I buy them….. can’t do that online. And I don’t want to go to the hassle of sending twenty items back until I finally hit on the right one. If brick and mortar stores where doing a better job, I’d rarely order anything online…..this coming from a woman who doesn’t view shopping as either a hobby or a an exciting activity. By underperforming, they’re missing out on the impulse buy that I would make because I saw and touched this wonderful thing that I didn’t even know I wanted until I saw it and touched while in their store to purchase something else!

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