The demise of the modern American department store has been written about ad nauseam for years and years. And yet go into any big mall in the country, walk to one end and there sits a department store, as large and shiny as it ever was, defying the predictions of the best suits in the business. But with even Dubai threatening to sink into the desert, we’ve all learned that anything can happen and it can happen anytime. So, perhaps it’s time to visit once again the subject of the future of department stores, especially this month when so many of them are counting on so much. I have never been one of those who said department stores would go away completely. Like many, I thought they would continue to lose market share and that has certainly happened. Like many, I thought there would continue to be consolidation in the business, concentrating more stores in fewer hands. And that has certainly happened as well. But unlike many, I believe the department store model, while fundamentally broken, can be salvaged. But it’s going to take a radical rethinking of what a department store must be. Here are some of the things that need to happen to have department stores around for our kids ... much less our grandkids. 1. Life after couponing. The heavy reliance on coupons and savings cards as the main promotional tools for department stores needs to be replaced. The shopper is tired of this nonsense in an age when you can press a button online and get your discount with a lot less bother. Department stores need to continue to be promotional—it is the way America shops—but they have to find a different vehicle. Maybe it’s loyalty programs, maybe it’s a discount encoded on your store credit card, maybe it’s something some 22-year-old in Stanford is creating. Whatever it is, it’s time to cut the couponing. 2. The Good Stuff. Most department stores today base their very existence around the designer brands they sell, labels you can’t find at Bed Bath & Beyond or Aeropostale. Yet, they rarely play this card in their sales and promotions. It’s time to put the good stuff on sale once in a while. If you’re using these brands as bait to hook the fish, you have to let those fish win sometimes to perpetuate the process. 3. Traffic Jams. Other than 5 a.m. on the day after Thanksgiving, most department stores are not teeming with humanity. To consistently drive traffic into the store, they need an everyday draw. And that draw is an oldie but a goodie: the bargain basement. Call it what you want, but get it back into the store as a destination. It works for the fast food places which use their Dollar Menus to get people into the door. It will work for department stores. 4. The Price is Not the Price. Finally, department stores have to get used to one very big and very new dynamic: The shopper negotiating prices. It’s starting to happen all over retaildom and store executives have to develop a way to deal with this before the shopper totally takes the upper hand in the process. Department stores? Yeah, they’ll be around for awhile. But you just may not recognize them. Look for my annual Holiday Shopping List, Presents of Mine, online at Hfnmag.com on Monday, Dec. 21. See if you’ve been naughty or nice.
