It’s raining in New York City, and tourists huddle under their umbrellas as they photograph the towering Vessel structure located at Hudson Yards, the City’s newest retail destination.  Even against the grey Manhattan skyline, Thomas Heatherwick’s copper-clad Vessel has an ethereal quality that is both captivating and bemusing; a sculptural Escheresque puzzle brought to life in Manhattan’s redeveloped West Side.  Despite the pouring rain, crowds of tourists diligently queue to enter the open structure and ascend the rain-soaked staircase.  The energy and excitement is palpable and no matter how divided opinion may be surrounding the Vessel, it has clearly become an experience to be owned – and shared – regardless of the weather.  This place has a pulse.

Hudson Yards and Thomas Heatherwick’s Vessel structure

Yet in the warm and dry surroundings of neighbouring Neiman Marcus, Hudson Yards’ anchor department store tenant, that energy and pulse is noticeably lacking.
The opening of Neiman Marcus within Hudson Yards heralds a first for the luxury department store chain who’ve never previously operated an outpost within New York City.  The announcement to plant their flag in the Big Apple came with the promise of delivering a world class retail experience to rival its established peers within the city.  Yet despite the luxury brands (who are all in attendance), the curated selection of art (the store features original work by Lichtenstein and Matisse) and the store’s scale (17,500 sq metres), the retail “experience” is somewhat thin on the ground.  Aside from a pocket of theatre provided by operator Atelier Notify who hand customise items on-site, New York’s Neiman Marcus certainly doesn’t redefine department store retail. Granted it’s a wet Wednesday afternoon, but where is the store’s beating heart? I decide I’d rather queue in the rain.

The Relevance Problem

Department stores have been suffering from a relevance problem for years and these once lofty cathedrals of consumerism are seeing their congregations dwindle.
As has been widely reported in the media, department stores have been hit by a combination of changing shopping habits, high running costs and (as with House of Fraser in the UK and Sears in the USA) years of underinvestment.  However other key factors are also having an effect on the relevance of department stores in today’s retail landscape.
For a start, brands no longer require an on-the-ground distribution network of stores in order to reach their customer.  Previously, brands relied on department stores (and the wholesale model) to sell their products and, symbiotically, customers relied on department stores in order to access those products.  Convenience and commodity for both brand and consumer all under one roof.  Now however, post internet, brands no longer have to rely on department stores to gain access to their customer as the convenience and commodity of shopping has moved online.
Secondly, fashion’s Spring Summer / Autumn Winter cycle as well as the pre-Christmas / New Year sales periods – crucial for department stores – are becoming increasingly obsolete as fashion brands “drop” collections and provide straight-to-consumer discounts all year round.  Many department stores do not have the agility to cater for this faster-paced turnover, nor are they able to accommodate a consumer who has become increasingly fickle in their pursuit of newness.
Thirdly, consumers are increasingly demanding greater levels of experience from a brand’s physical offerings as their expectations move away from simply buying things to the experience of buying those things.  Historically, department stores – often focussed on shifting inventory – have placed too much importance on the practical, and not enough on the emotional aspects of the customer experience.  Today’s consumer wants to be engaged in a genuine sense of discovery and the importance of how a space makes them feel is paramount.


Substance and Style

Not all department stores are on life support however.  Indeed, various pioneers in the market are facing these challenges head on.  Selfridges’ flagship store in London – possibly one of the best examples of bricks and mortar retail in the world – continues to be a trailblazer for the potential of department stores.  With a calendar of events and launches that infuse constant energy and newness into the store customers don’t just simply shop Selfridges, they live it.  Their ‘Corner Shop’ pop-up has become a hosting space for super brands and artists to present capsule collections and limited editions only available in-store.  Selfridges relationship with luxury players has seen them launch numerous exclusive collaborations, including their Radical Luxury campaign which saw brands including Louis Vuitton and BYREDO create unique installations that questioned our ideas of luxury.  Selfridges also continue to in invest heavily in their stores with last year seeing the completion of Oxford Street’s accessories hall, one of the largest in the world.  And in Trafford Manchester, the newly redesigned beauty hall features a wealth of customer focussed beauty services including a team of ‘Beauty Insiders’, experts unaffiliated with any particular brand that are on hand to provide impartial tailored advice.
Across the English Channel, Galeries Lafayette is also championing a different style of department store retailing with its new Champs-Élysées store.  The space designed by Danish architecture firm BIG (Bjarke Ingels Group) is radically different to the Boulevard Haussmann flagship, located less than two miles away, and features a unique mix of brands aimed at a younger fashion focussed customer.  Cantilevered glazed “internal windows” overlook the central atrium space and juxtapose against the store’s original Art Deco features.  That new-meets-old juxtaposition can also be seen through the store’s service offering as the 300 “personal stylists” utilise a “personal stylist 2.0” app to assist customers before, during and after their visit.  These sales assistants were specifically selected to include trend and style experts as well as cultural influencers who provide a knowledgeable, yet informal, level of personalised service.  The store also features digital “smart hangars” that track stock availability, allow customers to order their size, and then have garments waiting in the fitting room.

Galeries Lafayette

By redefining customer service, the store experience and adding retail theatre, the Champs-Élysées store champions a sense of place and community above simply being a shopping space.
Galeries Lafayette also continues to expand its store estate within the China market and opened its second outpost in April this year.  The Shanghai store with its beautifully landscaped internal garden terraces was designed by London design studio HMKM and marks the beginning of an ambitious expansion plan for Galeries Lafayette, with ten additional store openings planned by 2025.
In New York City, Showfields may be a newcomer to the scene, but unlike other department stores their assortment features only direct to consumer brands.  Self-titled “The Most Interesting Store In The World”, the store curates a mix of art, homewear, fashion and beauty, which periodically changes meaning that on each visit the customer will discover something new.  Showfields ethos is about showcasing physical retail in a digital world by fusing the best of online and offline. Many brands in-store have never had a physical space and Showfields provides a six-step process which assists with their concession’s design and construction.  Guided by impartial sales assistants, customers ultimately get to interact with and trial products within the store and use tablets to explore additional items.  If desired, customers can then use the tablets to purchase items which are shipped directly to the their home.  This symbiotic relationship between offline experience and online convenience is something many major department store players could benefit from emulating.
The simple fact of the matter is that department stores can no longer afford to be the ocean liners of retail as these once stately giants become increasingly out of date, their concept nostalgic and their purpose obsolete.  Today, there are simply too many icebergs.  The disruptive icebreakers of today are the department stores who are radically re-imaging the way in which they connect with their customers, they are the stores that have a pulse.
They are the stores who offer experiences that are relevant and engaging and who embrace agility by honing their “fix and flex”; the balance between areas of the store that remain static and areas which adapt to accommodate constant newness. They are the stores who create spaces focussed on how they make the consumer feel through a genuine sense of discovery and are bravely innovative. Ultimately though, it will be those stores who are willing (and able) to face their relevance problem head on by championing the very best of physical retail, that will survive the fall – and rise – of department stores.