What: BoF Senior Correspondent Sheena Butler-Young and Retail Editor Cathleen Chen explore the struggles of American department stores to remain relevant and discuss potential lessons from European counterparts.

Why it is important: The survival of American department stores hinges on their ability to innovate and adapt, learning from successful European models to revitalise their business strategies and customer engagement.

American department stores, once icons of retail success, are now grappling with overexpansion, the rise of e-commerce, and the decline of malls, leading to a saturated market. In the podcast "The Debrief," Sheena Butler-Young and Cathleen Chen discuss these challenges and highlight how activist investors are complicating the situation by focusing more on real estate than retail health. They draw parallels with Sears’ downfall due to similar investor strategies. Nordstrom emerges as a case study for potential revival through experiential retail and enhanced customer service, with the Nordstrom family considering taking the company private to facilitate transformative changes without public market pressures.

The podcast suggests that American department stores could benefit from emulating European counterparts like Selfridges and Le Bon Marché, which invest heavily in customer experience and store aesthetics. These European stores attract both tourists and locals by creating flagship experiences with meticulous attention to detail. The discussion underscores that while innovation is crucial, American department stores must also reinvent their value proposition to compete effectively with online fast fashion and off-price retailers.

Can department stores save themselves?