IADS Exclusive - When department stores morph to escape copycats
The future of department stores has become a topic that experts and media have expressed their views on many times, predicting the end of the model. While the so-called “retail apocalypse” didn’t happen, the retail landscape is indeed changing with a long list of mid-range store chains collapsing everywhere in the world and department stores evolving their model. With COVID-19, they showed agility to reinvent themselves by developing online capabilities overnight, updating their product offer and including more experiences and services to differentiate from the competition.
However, the transformation is not over yet. We are seeing an increase in the number of department stores resembling malls, favouring luxury over the idea of a ‘department store for all’. Conversely, branded retailers are increasingly resembling department stores. In that regard and following a premiumization strategy, Zara's most recent stores are taking cues from the department store playbook. Also, Marks & Spencer has emerged as a winner in the UK retail landscape.
Is that a natural evolution from both sides? Now that branded retailers are taking on the department stores’ codes, what’s in for department stores themselves? Are there any fundamental risks if they lose their factor of differentiation, or is it just a not-so-important question of display and presentation? Some department store companies have dropped the traditional way of presenting products by section and opted for a very immersive approach, becoming very large concept stores in the process. Is the future approach of department stores to merge customer journeys into innovative store concepts, to remain destinations for customers and differentiate from copycats who contribute to commodifying their once-typical approach?
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