A Rebranding Strategy for Department Stores
Department Store Rebranding: Mandatory
Why talk about department store rebranding? Because the department store market and the retail industry needs a complete reset (read a detailed market study of the entire retail category here). Department store chains are closing stores.
Malls are empty, traffic is down 5.8% from last year nationwide. Consumers spend their money on experiences (hold that thought), such as dining or travel rather than shopping. And too many retailers count on bountiful holiday sales to save their year.
Department store rebranding is the highest priority. Change is needed. Without change, retailers that depend on sales from their brick and mortar locations are irrelevant.
It is worse and more desperate for major department stores. They will become extinct. This is especially the case for the legacy department stores. In a nutshell this is the entire argument for department store rebranding. Change now or die. (Download a PDF of this article on Department Stores here)
Amazon in particular and the web in general is the new normal for shoppers, dominating the retail industry. Amazon dominates by being an online portal for items ranging from electronics to toys to apparel. You would be hard pressed to find anyone who has not purchased through the online giant.
Department stores. What’s next?
Department store rebranding from the ground-up is a needed strategic decision and not just a tactical one. Without this complete overhaul of department store rebranding initiatives and the total repositioning this means the vaunted old brands are finished. And finished soon.
We’ve dissected many retailers, including a report written for the Retail Customer Experience which encourages retailers to merge their in-store and online personalities.
We’ve also said “stop trying to be everything to everybody”. But tactical changes won’t save department stores. They need strategic change. They must redefine the value proposition for the target shoppers and convince them that their brands are relevant.
Department store rebranding restores relevancy.
Without that preference, no tactic or strategy can ensure the brands future success. If you are a department store, rebranding is the only way you can survive.
Rethinking is more than just rebranding department stores and their messages.
Even traditional rebranding does not go far enough. Retailers must rethink everything.
The market, especially those large department stores like Macy’s, Belk’s, JC Penney, Harrods, Bergdorf Goodman, Lord & Taylor, Bloomingdale’s, Sears, Debenhams, Meijer, Von Maur, Boscov’s, The Bon-Ton, and the like, are sliding into irrelevancy and, in many ways, are already irrelevant to the new shopper.
Probably right. Department stores: Be something different than what you are today. That’s how you survive. The ongoing sales promotions and specials that you rely on don’t do the trick. Black Friday won’t save you.
Their stores are overcrowded with product, there are no sight-lines, crowded shelves does not say variety rather it creates a feeling of being hurried. As a result shopping for apparel is boring at best and harried at its worst.
Department store rebranding for experience.
It’s especially problematic for women. There is more selection and yet more difficulty in finding clothes that both fit and are appealing.
Men walk into a store, know their inseam, waist, arm and neck sizes and, voila, there is a suit. As a result, men are free to purchase based on the look, style, price and brand. They find what is available in their size and they buy it. Minor alterations are acceptable and easy to accomplish. Many times, off the rack is a real phenomenon.
Women shop on size and department, which varies by store and by brand. Go into a Macy’s, for instance, and find a size 4 that’s a size 2 at another department store. It’s even worse than that. Shoppers shop in that same Macy’s, find a size 2 that fits and another size 2 that doesn’t.
That variation in experience is confusing and…dull. Women look at overcrowded and jammed racks in poorly set up departments. And all this to find a garment that appeals to them aesthetically.
As a result they are forced to search the jammed racks for that design or style in their size – even though they know that label size is no guarantee of proper fitting. This means they try on everything and sort through all sorts of retail disappointment. This is not an experience. It is a nightmare.
That’s not shopping, either. It does not translate into purchases. That’s solving the Pythagorean theorem.
An example of rethinking everything at department stores.
Ladies apparel is a $225 billion business; so preference, not just dropping in, is immensely profitable and increases relevancy in a dying industry. It is optimal to make the department store the destination. And not just for Christmas.
Is the solution transitioning to on-line?
That still raises important business facts. Department stores own large amounts of real estate. They have expensive long-term leases. What does it do to profitability if the great department store chains are forced to retreat and rely on web sales only?
Can they survive that sort of apocalypse? There is another answer. There has to be.
The problem is it won’t work with the current structures. Department stores desperately need an answer that lets them protect the brick and mortar investments that revitalizes shoppers today and in the future.
Success leaves clues. Shoe department retailing.
So back to the problem of finding the right fit. That is not a problem when shoppers shop for shoes or handbags. Consumers easily see what’s offered without the clutter, find the style they like in the right size and are off with it.
Shoe sizes are universal. The shopping experience is positive. Shoes are displayed on roomy racks and displays and the shopper scans all the shoes (including style, color and form) and then the shoe salesperson bring the shopper the shoes in their size.
Funny how simple it is. How civilized the experience, despite being in the morass of other crowded and jammed departments of clothing.
Rebranding requires retailers to rethink their stores operations and how technology is utilized. Sadly, the highest level of technology in retail today is a copy of Amazon’s model. Order online and pick up.
But apparel is a different animal, especially in women’s apparel. The sizing of women’s garments is useless. A standard that unifies sizing everywhere sounds like the big answer. Is it?
Yes, absolutely. The sheer amount of returns because clothing does not fit is an issue for Amazon too. There is no regulatory agency to govern sizing so that changes takes real effort from the industry.
Use digital tailoring software. Make the experience personal.
Even that is unmanageable because women, unlike men, don’t share a basic shape.
However, the playing field changes as shoppers provide a profile of their exact measurements. Can high-end apparel stores digitally measure the consumer and privately store those measurements in a private file? Of course they can.
Is it then possible to alter custom fit clothes to their specifications? Yes, but that is not the best model. Executing that on a mass scale so a Macy’s or Dillard’s use it is a challenge.
Department stores can afford to automate it. Do it digitally.
As a customer visits your store for the first time, direct them to a private dressing room and digitally scan their measurements. Their exact measurements are stored in their personal and branded app.
And as customers shop in the newly designed departments with newly redefined department titles based upon lifestyle rather than the traditional Juniors, Petite etc., departments. Shoppers can look at every offering, all displayed in a size 4. They now shop by cut, fabric, color, brand and style. Not size because only one size needs to be on display (just like the shoe department model we discussed earlier).
The convenience of their smart phone is utilized, They scan the code of the item of interest and the app stores the choice. The store is no longer jammed with every offering in every size. The result? The branded experience of shopping is civilized.
The racks are not crowded and the styles themselves are highlighted. The retailers use their merchandising skills to highlight offering. Suddenly, there are sight lines in the department store and an opportunity for the retailer to practice their skill at displaying wares and merchandising.
How it benefits you.
Here’s how this complete department store rebranding works. Simplify the offerings on the store floor much like high-end retailers. Customers actually see the garments in lengthy and leisurely glance. Consumers develop a digital profile on their measurements that is part of the retailers database. Because you know them and they now know you, a relationship is established.
When they return to the department store, consumers open the app to say they are in the store and what, in general, they are looking for.
When shopping is done, the shopper tells the app and are assigned a dressing room. The promise is that, in 10 minutes, everything they scanned will be in their dressing room and in their size.
Better yet, customers could use the app to say they are coming to the store and to get their personal rack ready and pre-placed in a dressing room.
Think about this. If implemented, it creates a preference for the department store brand (which reflects the change in the retail experience) and a database is established to enable more effective buys from designers and better PERSONALIZED service (read how affinity programs fail here). The customer chooses if they want the clothing in the dressing room or if they require human assistance.
The newly branded department store experience.
The new experience reconfigures the department store experience and decreases the display space and increases the warehousing. It requires an investment in logistics and warehouse systems.
But the new department store is now an adventure in experience and we know that customers covet that. The department store rebranding process combined with new thinking provides new preference.
Think it’s not possible? Amazon can do it, and Amazon is the retailer that terrifies the rest of the industry. The online retail giant, who just announced plans to open brick and mortar stores, is threatening to take over the entire industry while its players stand still and watch.
Amazon transports product anywhere in the world overnight. Is a tight logistics system that creates in-store logistics providing results in 15 minutes impossible? Believe that and you are doomed.
The future in department store rebranding is in personalized automation.
Plus, in the spirit of discovery, the store adds a few surprises— a few alternatives for that shopper based upon the customer profile and design preference. All of this accomplished by an algorithm.
Department stores, don’t get caught up in — “That can’t be done.”
Department store retailers must do two things. 1) Consider a total rebrand because few retailers position the brands against the competition and as a result are not meaningful enough to target audiences. (Here’s how we rebrand for our clients.)
2) Rethink everything. Ask the right questions in brand research that goes beyond simple usage and attitudes. The current model is a rapidly dying one. And given the current trajectory, there will only be room for one of the major department stores.
There is a third strategy retailers can adopt (and many are). Do nothing and watch Amazon destroy your business. But, as in most things, victory belongs to the first mover.