The challenges and strategies that could redefine department stores

Editor’s note: Jane Bainbridge is head of content at Pumpkin PR, London and New York.

Macy's, once an iconic cornerstone of department store shopping, recently announced plans for widespread store closures. The retailer is at a critical juncture, with discussions of potential buyouts raising questions about its prospects. 

I asked three industry experts to weigh in on the challenges and opportunities that Macy's faces in its quest for resurgence, as well as whether the brand can be revived.

Established retailers and the importance of adaptability

“Heritage alone isn’t enough for a brand to thrive; it’s about constantly innovating and creating experiences that resonate with customers. As one of the oldest and most iconic American retail brands, Macy’s serves as a pointed reminder of the need to continually adapt in today’s market. 

“It’s not too late for Macy’s to bounce back, but it must first find new ways to connect with its target audience and bridge from one generation to the next. Macy’s should pay attention to its fellow time-trusted retail brand Nordstrom, which has been boosting visibility with Millennials and Gen Z shoppers, leveraging social media influencers and meeting younger shoppers where they live – on their mobile devices – within shopping apps such as LTK.

“Macy’s undoubtedly has an incredible data infrastructure on which to build, but it first needs to create a system that allows it to leverage what it knows. Macy's can harness a connected system to utilize advanced analytics and AI-powered tools, extracting actionable insights into consumer behavior, preferences and trends from its existing data.

“Macy's may not survive as we currently know it, but if it leans into understanding its consumers and connecting data, it can regain its adaptability and reestablish the brand with a new generation of consumers.” – Nataly Kelly, CMO, Zappi

Department stores look to become relevant again

“Every brand can technically be revived, but success depends on investment and the appropriate strategic approach for meaningful repositioning. 

“As with most department store chains worldwide – beyond the operational mishaps – the main reason for Macy's recent demise is of a structural nature. Consumers simply do not find its department store concept appealing any longer. It’s tedious, slow, stressful, pricey and lacks excitement and personalization. Your operational model can be exceptional, but if your stores are empty, it won't save the day.

“The key is to pull the right levers to encourage shoppers to flock back into stores – to make coming into Macy’s fun and exciting. It may claim to be listening to its customers by launching private label lines but less than a year ago, its target audience was full of complaints about the miserable experience shopping in Macy’s stores. There’s clearly been a lack of action based on robust customer insight.

“Macy's needs to update its value proposition so it’s relevant again. Turn the destination itself into the reason for coming, beyond the actual purchase. Although they are only one store models, legends such as London’s Selfridges or Berlin’s KaDeWe show the way with immersive in-store experiences, workshops, talks or famed architecture. Macy’s planned strategy for a strong call to action needs to respond to this trend in consumer behavior. A focus on fewer stores to enhance a seamless and convenient in-store experience, as well as accelerating luxury growth, would be sound moves to make shopping at Macy's memorable for the right reasons.” – Fernando Ortiz Ehmann, global principal, Saffron Brand Consultants 

The role of CX research: Shaping the future of department stores

“Department stores have always been a cornerstone of the shopping experience, and while hearing about the closure of 130 Macy's stores across the U.S. fills me with sadness, it comes as no surprise. It reflects a very real challenge facing many brands in the retail landscape: the need to adapt to shifting consumer behaviors and embrace innovative strategies to stay relevant in an increasingly digital world.

“The key to success lies in providing a seamless and unified customer experience across all channels, bridging the gap between online and offline interactions. Customers today expect consistency and integration, navigating effortlessly between brick-and-mortar stores and online platforms. 

“By ensuring coherence in service, product availability and personalized communication, brands can enhance satisfaction and foster loyalty. This integration also offers valuable data insights, enabling targeted marketing and customized offerings. However, despite its simplicity, disjointed experiences still prevail, leading to missed opportunities. The focus must remain on delivering a cohesive experience that exceeds customer expectations, ultimately driving sales and retention.

“I am hopeful for Macy's recovery, but to succeed, it must prioritize enhancing the customer experience across all touchpoints.” – Alex Beazley-Long, creative strategist, Imagination New York