What: Retail Dive looks at what has been successful for US department stores for the last year, and what remains to be fixed

Why it is important:  Although they mention the changes in terms of customer behaviour or channels, they do not seem to take into account a catch-up effect which has indeed helped all department store companies in the world in 2021, but which is also a true issue in terms of durability of this effect.

Retail Dive looks at the reasons why, in spite of a worldwide pandemic leading to a slump in tourism, some department store companies posted excellent results, both in terms of sales and traffic, in 2021 compared to 2019. Of course, this is due to the fact that these companies were forced to adapt and innovate, especially on the digital front where they were notoriously lagging, and results are paying off. However, Retail Dive also points out the remaining challenges that were evident before the pandemic and which are still unresolved:

• Traffic to malls is not recovering and department stores do not benefit anymore of being anchors in such locations. The pandemic has accelerated the decline of malls as retail locations, and some of them even turn away from department stores to generate a new kind of traffic based on experience or innovative retail formats.
• Consumers are spending less, as they realized that they could live with less, meaning that all of a sudden Walmart, Amazon, dollar stores and off price retailers are formidable competition for department stores,
• Channels keep shifting, which is an issue for department stores which built their USP on convenience, when online becomes the most convenient option possible,
• The pressure to spin off e-commerce is a distraction, under the pressure of activist investors. This is a short-term pay-off but ultimately destroys customer experience,

For Inside Retail, department stores are doing a turnaround, however the question is to what extent the turnaround is sufficient to guarantee their survival on the long run.

Can this year's department store recovery last