10 Lessons Grocers Can Learn From Department Stores

Each month brings with it another new dominant headline on how one of our most frequent shopping experiences – buying groceries – will be forever changed. Curbside pickup. Driverless cars delivering to our homes. Automatic checkouts.

The technological rush shows a willingness by the largest chains to ensure they outmaneuver upstarts and avoid suffering the same decline of the department store. Consider this. Annual U.S. department store sales peaked in 2000 at just over $232 billion. They’ve been falling ever since, and 2017 saw only $150 billion in sales, the lowest in at least 25 years. Over that time, many leading brands – Boston, Bonwit Teller, Burdines, The Bon-Ton, and B. Altman’s just to name a few B’s – have been absorbed or simply vanished, and the shake-out is far from over. In 1992, department stores accounted for the fourth-largest share of total retail sales. Today, they have fallen to 12th.

What’s behind the precipitous drop? One explanation is a change in shoppers’ behavior. Those who once appreciated the wide selection of brands available at department stores now opt for the convenience and even greater selection offered online. While this has certainly been a factor, it isn’t the full story, though. Similarly situated retailers such as specialty and general merchandise stores haven’t experienced the same kinds of sales impacts.

The fact is department stores failed to adapt and evolve their merchandising and real-estate strategies with the times and with shoppers. What used to be destinations for retail and socializing – fun places to shop with memorable and unique design features – became utilitarian and generic. Because they ignored customers’ needs and failed to invest in spaces, amenities and the overall brand experience, department stores simply lost their appeal – and relevance.

Andrew McQuilkin

For over 30 years, Andrew has served in key design leadership roles in the retail industry. In his role as Retail Leader, Andrew is responsible for leading the retail design and architecture team’s expertise in branding, store planning, interior design, merchandising, building architecture and rollout for retail clients. Andrew has extensive knowledge and background in the design and implementation of department stores, vendor shops, specialty stores, large format and discount stores with award winning retail designs including Store of the Year Awards in 1995, 2000, 2001 and 2003.