While retailers double their efforts in a bid to reach out to digital consumers, department stores seem to have ended up at a crossroads where they must choose between adjusting their offering to new shopping patterns or go out of business. Why exactly have department stores lost their charm?

Outdated customer approach

Department stores were created as places where shoppers would get inspiration and discover new things. However, this role has been hijacked by the omnipresent Internet. Nowadays consumers get inspired by what they find on social media and blogs. The whole concept of webrooming is based on that mentality. Consumers start to select the specific products they want to purchase before they choose where to buy them from. Where does that leave the department stores? They end up feeling compelled to resort to the oldest trick in retailer's book - competing on price. Sadly, value has been lost in the process. With an ever-so-increasing number of stores choosing to open off-price locations, this trend appears to be quite strong in this segment.

Why does everything look the same?

Fast fashion is another area where department stores seem to be losing ground. Major high-street fashion retailers can put out new fashions every few weeks. Department stores were created around the concept of featuring brands, almost like a store-in-store. Despite the fact that they have invested in private label brands to try to make a difference in the ocean of nearly identical items, the "sameness" problem has aggravated. What is the source of these issues? The buying power of department stores has gone up considerably over the last two decades thanks to consolidation. Consequently, it is not easy to persuade them into adopting a somewhat more adventurous approach to their assortment. Besides, brands would rather display their goods online or in their own brick-and-mortar stores to make sure the brand is well represented and does not sink into the sea of other brands.

Offering a way of life

To fight off the pending crisis, department stores should stand for a lifestyle and help consumers solve their lifestyle problems. With a notable exception of high-end luxury department stores, the rest of department stores do not offer any lifestyle-related advice or guidance to consumers. They should take a clue from bloggers and restructure to be able to offer solutions to lifestyle problems.

Source: www.forbes.com