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In principle, real-world businesses can now open again, possibly with restrictions.  In practice, that doesn’t mean that they will.  Business owners will need to decide whether their businesses have a viable future at all.  If so, does that future lie in their current real-world locations or, indeed, in the real world at all?  This question is especially pressing for department stores.

The woes of the department stores

The woes of the department stores date back to long before the pandemic.  When they began, they were the places to find a wide range of items under one roof.  Now, they are just places to find a wide range of items under one roof.

Supermarkets have now expanded their product range well beyond just food and household groceries.  Online behemoths like Amazon can offer a wider range of products than any real-world store could possibly house.  Admittedly, you have to wait for delivery but this may not be an issue.  In fact, it could be more convenient than having to get the item(s) home yourself.

Even when the department stores moved online, they were still at a disadvantage to both the supermarkets and the internet giants.  The supermarkets attracted people who needed their regular shopping.  This allowed them to upsell more profitable items.  The internet giants were, literally, built from e-commerce and, hence, understood it inside and out.

This has left surviving department stores with just three options.  The first is to improve their e-commerce operations.  The second is to improve the customer experience they deliver.  The third is to develop in-house brands so they can provide a unique offering.  Furthermore, they’ll also need to ensure they’re getting maximum value for their assets.

Improving e-commerce operations

Department stores have a long way to go before they can match the online giants for efficiency.  It could, however, be much easier for them to match, or even exceed, their competitors in terms of the overall customer experience.

For example, they could make sure that their sites are designed to be aesthetically pleasing as well as functional.  Real-world department stores are famous for their window displays and decor.  This could be replicated online.  They could boost the impact of this by making sure that there was plenty of infotainment content for visitors to enjoy.

Similarly, they could push to deliver a more personalised customer service experience.  For example, they could make sure that users always had access to a chat box that took them straight to a real human.

Improving the customer experience

Improving e-commerce operations will improve the customer experience for online shoppers.  If, however, department stores wish to maintain a real-world presence, they will also need to ensure that real-world shoppers also have an excellent customer experience.

Achieving this may require substantial investment in refurbishing ageing buildings.  If department stores are not able to finance this, then, sadly, their only option may be to close them.

Regardless of whether they can maintain existing retail locations, department stores will need to work hard on developing their connection with their customers.  They could do this through a combination of social-media activity, traditional-media activity and community outreach.

Developing in-house brands

A retailer with a desirable in-house brand has a huge advantage over any competitor without one.  It’s therefore hardly a surprise that supermarkets, major online retailers and department stores have been working to build them.  This is, however, one area where department stores may have an edge.

Supermarkets and online giants are typically about low prices and high value.  This can be a winning combination for everyday goods.  It may not, however, be so desirable when you move up to the more premium end of the market.  Surviving department stores like John Lewis and Selfridges could, potentially, move in to occupy this territory.

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