What: Department stores are investing in private label brands, e-commerce offerings and product collaborations to capture younger consumers. So far, initial results of these efforts have been promising.

Why it is important: As e-commerce has boomed and given way to the rise of digitally-native, players like Shein or Boohoo, department stores have struggled to find a place in the shopping habits of younger consumers.

After realizing that young people are not shopping at their stores, Nordstrom launched a task force to develop a long-term Gen-Z strategy. The planned changes include a new ambassador programme, a new website landing page, a private label rethink and a series of exclusive collaborations with brands like Billabong and Wrangler.

A number of other department stores, including Macy’s and Fred Segal, are similarly sharpening their focus on Gen-Z through the debut of new private label brands, reimagined e-commerce sites and product collaborations.

To attract new consumers, Fred Segal built out its online store’s navigation tools, doubled down on email marketing and experimented with livestream shopping on Instagram. The company also began showcasing curated looks across its digital channels, which have been a driving force for bringing in new consumers.

This month Nordstrom introduced an additional landing page targeted to younger consumers, re-organising the site to highlight a range of products for them to find easily with one click. The company is also launching an ambassador programme, offering styling and content creation with virtual monthly meetings.

Doubling down on their private labels, Nordstrom and Macy’s both announced the creation of new lines and revamped categories. The former overhauled its juniors-focused BP private line this year, while the latter is planning to launch several private brands over the next year with a focus on everyday basics, starting with its And Now This line, which debuted in July.

Nordstrom and Macy’s are banking that the middle ground offering between luxury and fast fashion — quality products at an accessible price point — will stand out to consumers and keep them coming back. But competing with players like Shein, which routinely drops thousands of new, inexpensive items per day, is a difficult game. The promise of higher quality only is likely not enough to wean them off fast fashion’s low prices and speedy delivery.

Additionally, Fred Segal and Nordstrom both reassessed pricing based on shifts it observed in consumer behaviour. The changes made at Fred Segal resulted in a much higher sell-through and demand for accessible emerging designers.

Nordstrom went so far as to buy a stake in Topshop and its sister brands in July. Fred Segal is acquiring and reviving shuttered labels such as Camp Beverly Hills to sell exclusively in hopes of mining Gen-Z’s love of nostalgia: the line was a success for the company, with 25% of inventory sold on the first day.

Can Department Stores Win Over Gen-Z