A recently released Forbes article about Black Friday highlighted the declining fortunes of department stores in the overall retail mix.
With stagnant or negative same store sales growth, and a decade of declines in market share, it seems that department stores have lost their dominance over the retail landscape.
Macy’s, Bloomingdales, Sears, and JCPenney are all relatively flatlined, even as sales have begun to pick up in the rest of the economy. What has replaced them? General merchandize big box stores such as Walmart, Target, and Tesco.
But the Forbes graphs show one other thing — we may be past the heyday of general merchandise stores as well. Growth is happening in direct-to-consumer sales and other internet based channels.
Ultimately, this could be good news for department stores and general merchandise stores that are able to modify their supply chains to match the new consumer preferences. Retail stores need to operate more like distribution centers, so that all inventory in the supply chain can be used to fill any order, anywhere.
As the data shows, firms that can do that will prosper regardless of whether they were originally a department store or a general merchandiser. Firms that can’t make the shift will slip gently into the night.
Look for our upcoming white paper on Omni-Channel Sourcing; a collaboration with TradeCard.