What: Creative experiences and a less-standardised approach to operations and design have helped iconic stores like Selfridges, Liberty and Le Bon Marché resist multi-brand retail’s decline.

Why it is important: These stores have key advantages over their American competitors, such as cash-rich backers, being located in tourist hubs and operating on a concessions model. Still, their success is also rooted in better store design, stronger visual merchandising and incorporating higher creativity in the shopping experience.

Differentiating Through Design

A fundamental difference between American and European department stores is store design, from the layout of the space to the materials used for floors and displays to finishing touches like light fixtures and the pictures on the walls.

Given the bottom line-focused mentality of American big-box chains, their approach toward how stores look and feel tends to be very “systematic.” The European stores exude a more creative atmosphere. Rather than vast, open layouts, they are partitioned into rooms or shop-in-shops with varying styles. Variation is key: differences in lighting, openness of space, store furniture and the art that adorn the walls.

Transforming lacklustre interiors into something a bit more special isn’t always a heavy lift. Even small changes can go a long way, such as reducing the number of garments on each clothing rack or varying the lighting. Product displays and tables can be recycled materials or even found objects. Upgrading little details adds to the air of luxury and therefore can augment the value of the products they display, too.

The Shift to Concessions

American department stores are increasingly invoking the European model where they can. Luxury brands like Chanel, for instance, have pushed their American wholesale partners to embrace the concessions model, the common way of operating multi-brand retail in Europe.

For the likes of Neiman Marcus, mixing wholesale and concessions means giving up some control over selection and service. But housing retail locations for anchor names like Louis Vuitton or Nike is a powerful draw for foot traffic, and often more profitable than holding inventory and operating the space themselves. For customers, the brand-operated shop-in-shop is often a more engaging experience, with brand-employed sales associates who are experts on the products.

Commitment to the Experience

“Experiential” may be the ultimate buzzword in retail, but a truly immersive, delightful shopping experience is still somewhat of a rarity. In recent years, certain American department stores have invested in amping up their experiential components. Saks Fifth Avenue in Manhattan opened the only American outpost of popular Parisian bistro L’Avenue in 2019. In 2018, Bloomingdale’s launched a rotating pop-up series in four of its stores.Those moves recall London’s Selfridges strategy of reserving some of its most coveted, visible corner spaces for brand takeovers and art installations rather than merchandise or a shop-in-shop tenant.

Some of these efforts have been effective. But they don’t compare to the frequent and large-scale activations put on by the likes of Le Bon Marché, Selfridges, Harrods and others in Europe. Selfridges on Oxford Street alone offers more than 20 food and beverage options. Last fall, Le Bon Marché put on a two-hour play production inside its store every Friday and Saturday — a run that will pick up again this spring.The goal is to provide customer experiences that evoke an emotional response. By always offering new and unpredictable activations and pop-ups, European department stores ensure that lo cal customers will keep coming back.

What American retailers can learn from European department stores