Economy is Strong, but Department Stores Are Still Seeking Solutions
Effective communication has always played a vital role in profitability, no matter what your business offers. That challenge, here, is that communication – both the methods and the expectations, change over time, so what may have worked in the past may not work so well in the future. That means the ways in which we communicate, as well as what we say and who we say it to, should be consistently reviewed for accuracy and effectiveness.
Unfortunately, for many established businesses, those ideas were not properly ingrained in their processes, and that lack created a cascading effect both on investor and consumer confidence coming into the new year.After a year of low unemployment and growing wages, not to mention cheaper fuel, the markets expected a relatively robust holiday shopping season for retailers, even big box stores and department stores that have endured lagging sales in recent years. But higher consumer confidence toward the end of the year didn’t deliver the elevated sales everyone expected.
After popular department store chains such as JC Penney, Kohl’s and Macy’s reported not-so-great numbers, retail stocks took a nosedive and that fear triggered a whole new round or “Is retail as we know it dead!” questions.
Those kinds of questions are not good news for either big box retailers or consumers. They damage consumer confidence and hurt overall investor confidence in a mode of retail that is, increasingly, being thought of as a “last century” model.
The quickest answer to these concerns is to increase sales at these stores. But, really, it’s not that simple. Department stores, if they want to maintain profitability, need to convince consumers that they actually are a good modern option to online sales. And they have to do this with decreased staffs, less options on the floor, and increasing costs of doing business. It’s a tough nut to crack, but crack it they must.
So far, at least one major department store – Sears – has failed in its attempts to get people back to their stores. They also failed to adjust to shifting consumer habits in a way that allowed them to stay afloat.
Simply put, most departments stores and some other retailers are not offering customers what they are looking for most in a sales experience. While big box stores in multiple different segments – from dry goods to groceries to hardware and crafts – all seem to be flourishing, department stores are failing to get enough shoppers buying enough goods to meet projections.
So, it’s not just as simple as “people are shopping online.” There’s more there… and it begins with what these stores represent to modern consumers… and it ends with what they are willing to do about it.