What: A post-pandemic playbook for department stores.

Why is it important: While winning online, stores will have to become entertainment destinations, using technology and localisation to their advantage.

In the future, department stores will have to recapture the entertainment approach they once had, retail consultant Andrew Smith of Think Uncommon thinks. He points to Showfields, a retail startup launched in 2019 that acts as a showcase for smaller, mostly direct-to-consumer brands. Showfields offers space to create mini stores-within-a-store in an environment built around entertainment and theatrics. When bricks-and-mortar retail reopened after shutdowns, Showfields responded by introducing a Magic Wand app, which combined in-person contactless shopping with an enriched online experience and the chance to book an interactive tour.

Camp is another retail concept: it’s a toy store aiming at the whole family, which not only sells products but also holds workshops, and refreshes its product assortment along with themes, much as Showfields does.

Among department stores, Smith cites Nordstrom Local stores as an example of a goal that isn’t solely about revenue on the sales floor: these 3 000 sqm sites focus on services like personal stylists, pop-up displays of brand collaborations and an omnichannel returns centre that accepts packages from both Nordstrom and its rivals. Bigger brands should also embrace service-focused, smaller format sites: since retail vacancies are expected to rise, it’s the ideal time to affordably experiment with new formats like that.

Speciality boutique Intermix has seen success with another approach. It has created “days out” for regular customers, where women are invited to come with a few friends to a suite at a local luxury hotel. The experience isn’t just about shopping: there are lunch and spa treatments, while a sales associate will showcase an edited assortment of new items to try on and purchase.

By far the biggest, error among bricks-and-mortar retailers has been their attempts to mimic the online experience. “A store that just puts up a bunch of screens and thinks that makes it feel more digital? That’s exactly not the reason you walk in,” says Yamner Green of The Yes shopping app, “It’s only when you make them completely different that you start to win.” Moreover, technology isn’t innately innovative; rather, it can enhance the in-person experience when smartly deployed.

Pre-bankruptcy, Neiman Marcus planned to streamline clienteling by swapping sales associates for a cutting-edge CRM platform, a fundamental misunderstanding of how to deploy tech in a revenue-boosting way. But the right partnership with startups can help a retailer expand into new areas. Hero, which works with Intermix, allows retailers to replace centralised customer service centres with in-store associates who can video-chat with buyers. Sweden-based Bambuser is another notable startup. It focuses entirely on video shopping, whether via live events or one on one with a personal shopper; the average add to cart click rate is 20%.

These services aim to better coordinate online and in-store services, so they can work together more seamlessly, allowing each to emphasise their strengths. It’s a cautionary reminder for Saks as it separates its two channels into rival businesses, a move that Think Uncommon’s Andrew Smith believes is risky at best.

NB: Showfields will be a guest speaker at IADS “New Business Models” Cross-Functional meeting on 26 April 2021.

Post-pandemic playbook - Reviving US department stores

Related items:

• Instore experience: the case of Showfields
• Saks stores and e-commerce to split into separate companies
• Nordstrom launches livestream shopping programme