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Sarah Lebo
Connective Media by United Airlines is redefining traveler media with a world first omnichannel network. From in flight to online and in app experience, Best in class tech helping brands engage travelers where it matters most. Ready to make an impact. Discover more@connectivemedia.com hello listeners. Today is Wednesday, April 16th. Welcome to behind the Reimagining Retail, an emarketer podcast made possible by Connectiv Media by United Airlines. This is the show where we talk about how retail collides with every part of our lives. I'm your host Sarah Lebo. Today's episode topic is the department store in 2025. Before we jump into that and into a special field trip we went on, let's meet today's guests. Joining me for today's episode, we have podcast regular VP of content content for our retail desk, Suzy David Canyon. Hey, Suzy.
Suzy David Canyon
Hey, Sarah. Thanks for having me.
Sarah Lebo
Thank you for being here. Also with us is one of our analysts. It is Karina Perkins joining us from the UK Hey, Karina.
Karina Perkins
Hi, Sarah. Thanks for having me back.
Sarah Lebo
Yeah, it's been a while. Glad to have you back. Okay, so what jumped off this episode idea for us is that Hudson Bay, an iconic Canadian chain of department stores. Cue Susie mentioning something about being Canadian here for filed for bankruptcy last month. This got us thinking about the department store space worldwide. Department stores are, I don't know, kind of struggling with e commerce. And so we decided to go on a field trip to a new store that opened over by the Emarketer office in New York City. But before we get into that field trip, let's talk about how department stores are doing. Suzy, you're up first. How are they doing in the US.
Suzy David Canyon
So I think department, I mean, you guys, we talk about department stores a lot because I come from the department store world and it's not with that lens that I am saying department stores are getting a bad rap. I think what's really important to think about in the US Particularly is that there's only so so many store opportunities. And the way that department stores were structured as this one hit wonder shop where you could find every single thing under one roof is a fallacy. So like that's not supported anymore. There is nowhere that I don't think across the world where there are no like the one hit, one stop shop where everything is happening under one roof. And everywhere now there's a proliferation of specialty stores. So the relevance of department stores, I don't think it's a question of e commerce as much as it is. Give me a reason to shop here. So to answer your question a little bit more directly, the really high, high end department stores seem to be doing okay in the U.S. it's that Middle Market department store, the J.C. penney's of the world, who also declared some kind of bankruptcy or are in the process of trying to reconfigure Lord and Taylor. I think it's that mid tier that's having a tough time because they don't really stand for something.
Sarah Lebo
Yeah, I mean the high level, the Bloomingdale's and I was in a Bloomingdale recently and I didn't buy anything, but I was crowded in there. There's definitely a reason to go there. The mid level, there's a question of why would I necessarily go here when a Walmart can do this for way cheaper. And I recognize that JCPenney and Walmart are way different stores, but that mid level shopper is definitely strained. So they might be trading down.
Karina Perkins
Yeah, I think that's. We're really seeing a similar Trend in the UK. I found a report from Avison Young citing July 2023 data from Storepoint and it found that 85% of the department stores occupied by the kind of former traditional operators have closed down. And we've seen quite a few of the big guys go out of business. Several of them have reopened as online only and other ones are having their kind of stores repurposed into slightly trendy new formats. But a similar thing here, I think it's that real mid level which is struggling and it's quite interesting if you think about it because when you look at e commerce marketplaces which are that kind of one stop shop are doing really, really well. But it's perhaps not a format that's translating so well in physical retail anymore.
Suzy David Canyon
Well, I also think here in the US the not only it's the mid tier, but it's the mall landscape. A lot of the department store brands are doing strip mall and sort of different configurations, open air malls where it seems like those stores are doing a little bit better versus the fleet of stores that are typically in a mall. So it becomes a bit chicken and egg as the mall is quote unquote dead, which I don't think it is. But as we're hear say that does that make the department store also that was typically the anchor store suffer when there's not as much foot traffic at the mall?
Karina Perkins
Yeah, and we've seen a similar thing here on our high streets. You know a lot of department stores were on high streets and we've Seen high streets really struggle with that kind of footfall. And also people are shopping, they're browsing, but then they're going home and they're buying online. And I think a lot of stores are really suffering from that at the moment.
Sarah Lebo
Suzie, you had a big reaction to that.
Suzy David Canyon
Well, I did, because I think one of the critical things and sky is working on a private label report is as a store door, if you do not have unique to you brands, whether it's private label or market brands that are not being sold elsewhere, then you're going to lose because people will go online and look for the lowest price point. And I think a lot of the retailers are still. The department store retailers, I should say are still struggling to have an authentic online experience and activation, especially through the mobile app that sort of connects the store and the online experience. They're just having a tough time doing that, which is also not great for them.
Karina Perkins
Yeah. And I think if you're looking at the kind of square footage as well, the cost of running those stores versus the kind of profitability is also something that's really tricky to maintain at the moment.
Sarah Lebo
Yeah. We did an episode on malls a few weeks ago with myself, Emmy and Rachel, two of our analysts and something we were talking about is how those anchor stores are no longer what's bringing people into malls. It's different experiences, it's different food opportunities, it's different events, but it's not the anchor store anymore. Obviously that's not universal, but that is a changing trend.
Suzy David Canyon
Yeah. I also think to Carina's point, which we should sort of intensify is the square footage sales per square foot. KPI is probably a thing of the past. And if department stores are only worried about comp sales, then they're going to lose out because there are a lot of. So for you guys it's high street. For us, maybe here in New York, it's fifth Avenue. There are no department stores on fifth Avenue. But being in a really nice mall for a department store might mean more about activations and other non sellable square footage usage versus just trying to cram a bunch of stuff into a store to try and get the maximum dollars possible. Canada had a lot of department stores and slowly they're all going away. The mall that had one of the department stores as the anchor turned into science fair pop up where our science museum came and did a whole activation for kids. So malls are trying to figure out how to make traffic come back. So it's a bit chicken and egg, is it? The department store, is it the mall? I mean, it's hard to know what.
Karina Perkins
We'Ve seen here as well. Actually. You mentioned the kind of food and drink element. We've seen a lot of department stores here kind of opening new formats that include food and drink concessions or they're kind of pop ups for brands that are only online, things like that. So again, I think it's really that giving people a reason to come in store.
Sarah Lebo
Yeah, I think that segues us nicely into the field trip that Susie and I went on just yesterday. So like I said, French luxury department store Printemps. Susie, can you do the French pronunciation for us?
Suzy David Canyon
Sure, it's Printemps.
Sarah Lebo
Let's pretend I said it that way. Also just opened up by our office in the financial district in New York City. Susie and I decided to go on a field trip there yesterday and I think that a lot of what we've just been talking about is what stood out to us. So Susie, why don't you go first with just what stood out to you about the store layout and the merchandise.
Suzy David Canyon
So for me there are a couple of things. It's a very majestic store. It's in a historic area with an, in an iconic building. And it felt so airy and a little bit like Alice in Wonderland in terms of the fixtures, the mirrors, the. The way that the fitting room was done. There was so much space, which also meant that there wasn't a lot of merchandise. And it was a little bit, kind of made me think a bit about Herods in terms of like kind of a maze that it wasn't, you know, you see everything and then you know exactly where you're going to go. You had to be forced to walk into different areas and like groupings of things. Very light on merchandise. But they did have a lot of tchotchke and they didn't have every single category under the sun. They maybe had one or two vases. It was all cross merchandise. So you didn't say like, oh, I want to go buy textiles for my house. You just either saw something you liked or you didn't. And it was very inspirational.
Sarah Lebo
Yeah, honestly, we had a blast in this store. It was smaller than both Susie and I expected. And that space also, like Susie said, was not full of merchandise. So this is where what you were just mentioning the sales per square foot probably isn't the best KPI for this store to be measuring their success because honestly, they don't have that much merchandise in the store. What they do have a lot of that we haven't even gotten into is experiential drink opportunities. I think we saw four different bars in the two story department store. Each bar had a kind of expensive price point, like 20 plus dollars per drink, but not unreasonable for what you would expect in a fancy building in the financial district. And definitely a good place to bring both tourists in and also like Wall street professionals looking for a nice place to take a drink.
Suzy David Canyon
Yeah, Karina, it's like you were saying, we're starting to see that here too in the US where department stores are building out food based beverage based in Bloomingdale's, Nordstrom, they all are doing it. But here it was really sort of like you go through this beauty quote unquote corridor of like some skincare and too. And it was like very, very tight merchandising in terms of the breadth of merchandise. And. And then there's like, oh wow, there's a little bar here with a person who's serving you champagne and other like high end ish feeling things. Right. And then there's a coffee shop when you first walk in. And so there is a lower price point. There's a little spa area which looked so it was like kind of unluxurious but still so cool that they're doing facials and other activations there at a price. But I'm sure they're using all the great skin care that they have. That's very hard to find here. I mean it was. It's a very interesting space. I didn't see a food restaurant, but I think that's probably just coming.
Karina Perkins
It's about kind of making it a destination, isn't it? You know, people come to Harrods to go to Harrods. It's not necessarily because they want to buy something from Harrods. It's because it's one of the stops on the kind of tourist journey when you come to London. And I really think that's the direction that a lot of the department stores are going in, especially the higher end ones.
Sarah Lebo
Yeah, the merchandise there was definitely out of my price point. We found very little that was under $1,000. That said it wasn't out of a high spending New Yorker's price point. We definitely saw people holding bags with the merchandise. And also like Susie said, they had tchotchkes so you could go there and say you bought something. Something that really stood out to me from a merchandise perspective is there was an entire area that they were calling a residency. They had a Nike residency there. At the time it was almost like a Shop within a shop of Nike shoes and they had an exclusive shoe that they said they only made 350 of. So there was that exclusive draw. Those shoes were definitely affordable in terms of Nike shoes as well. And they told us that they would be doing other residencies in that area in the future.
Karina Perkins
Yeah, and like I said before, that's something we're really seeing over here. It's kind of department stores teaming up with brands to do pop ups or residencies or kind of showrooms, quite often online only brands. And I think that's a really interesting way to get people through the door because it's rare that they can go and actually see that merchandise themselves.
Suzy David Canyon
And I think I remember the last, which was a long time ago. The last time I was in London I went to John Lewis and there I went to. I love Benetton, it's hard to find. And I grew up on Benetton and they were doing an activation where you could get whatever you wanted embroidered on whatever piece you bought. And there was a lineup for that. And I can I. You know there is something fun about doing unique things. This place here, Printemps is too small to do that kind of stuff. They probably, I mean we didn't count. But I don't think that there were more than 20 brands in terms of clothing that were there. At the very maximum they had a small selection of bags and accessories. Probably the biggest selection was in shoes. They had a whole section on shoes.
Sarah Lebo
But everything else or skincare. There was so much skincare in this beauty corridor and very little makeup which stood out to both Susie and I. And you actually had to walk through the skincare to get to the makeup. I think that's just indicative of like a greater trend in beauty as well. That skin care is what's big.
Suzy David Canyon
Yes, yes. And Macy's has so much skin care that for me it felt like they didn't actually have a lot of stuff there. So I think it just depends on what your data point is. But they are skewing on the too much choice is paralysis and you walk away a customer. So they are standing behind brands and then a limited type of SKU assortment within those brands. So there were definitely lots of different brands that we've never heard of before and some, some like French pharmaceutical skin suitable type brands that are hard to find here. But for me from a volume perspective it was just very awe inspiring in terms of it was like this white corridor that you walk down and it was like so nicely merchandised.
Sarah Lebo
It was so curated the whole experience was so curated. It felt like, I don't know, it felt like walking through an algorithm almost. The installations were gorgeous. The architecture was just absolutely gorgeous. But something that stood. Susie and I walked in expecting to see a lot of technology. And Suzy, can you speak to that?
Karina Perkins
Yes.
Suzy David Canyon
We saw nothing. We saw no QR codes. We saw nothing.
Sarah Lebo
One QR code with a map.
Suzy David Canyon
Oh yes, sorry. But we saw one QR code. We saw. No. There are a lot of products that have QR codes either at the fixture or on the tags. There was none of that. There were no TVs. There was music, but it was very low key, not very loud. We were also surprised at the number of individual sellers and associates that were on the floor. The place was packed, but there were definitely a lot of workers there versus the ratio was a little bit unexpected if you ask me. But there was nothing until we got to Nike. And at Nike, the roof was an LED sort of tv, very subdued. It looked like beach sand kind of. I'm not even sure what it was.
Sarah Lebo
The ceiling was multimedia.
Suzy David Canyon
Yeah, that's the only place we saw. Plus as Sarah said, the maps that were. This is where you are and you could. It was a touchscreen map basically.
Sarah Lebo
Karina, is that consistent with anything you've seen in the uk?
Karina Perkins
Yeah, I mean I'm trying to think about how you could compare that. I think the thing is if you're setting up this kind of higher end destination department stores, I don't know how heavily they're leaning on tech at the moment. I think you'll see more of the tech in that kind of mid level stores that are really trying to find another way to get people in.
Sarah Lebo
Yeah, I mean, so let's move on from this store in particular to lessons for the contemporary department store. The question I have here is what does the contemporary department store need to stick around? Let's talk about both luxury stores and the mid level store. So I mean, let's start with luxury. What does the luxury store need to stick around?
Suzy David Canyon
I mean I, I would say. I'm sorry, I'm not answering your question directly. I think it's probably the same for both. So whether you're luxury or not, probably based on everything we've seen and said and read about having the right KPIs to measure success. So is it just about sales? I would say making sure that you have a really strong assortment and that you stand behind brands and that you don't look cluttered so that people know where to go to get what they Need.
Sarah Lebo
Yeah. What we saw definitely is that the department store almost feels like an ad for E commerce. And in order to stop people from shipping shopping around for the cheapest available option of what they saw in the department store, I think they need exclusivity.
Karina Perkins
Yeah, absolutely. And I also think it's about, especially perhaps at the mid level, it's about providing some services or experiences that people can't get when they're shopping online. So there's a department store here, Frasers, which has like an Evans Cycle workshop in it. There is John Lewis has opened some repair and alteration services in its stores. And I think it's really about those kind of things that are like drawing people in, giving them another reason to be there, another experience for being there that is something that you can't get online.
Suzy David Canyon
Yeah, yeah, absolutely. And I would even add with that you need to have a really strong loyalty program because people don't come to buy, you know, $5,000 bags or $300 bags every week. And so having a really well thought out loyalty program will probably draw people in more frequently. But it also potentially help you not put everything on promotion all the time. Right. So now this is the mid tier here in the US where there's. And in Canada too where they do a lot of sales like one day sales and like Kohl's days and other sort of unique to them sales because they're trying to drive traffic but they're also discounting their products to try and you know, increase sales and that takes a margin hit.
Sarah Lebo
Yeah. As great as the print ops experience was, it's unique, it's in a high wealth city and within that city it's on Wall, it's on Broadway, but it's by Wall street, it's in a high wealth area. So you're right, your average consumer is not coming in to buy an expensive handbag every week, but a celebrity stylist might be. So they have access to a consumer that the average department store does not have.
Suzy David Canyon
Oh, I'm fascinated by that particular space though because Saks opened not that far downtown, an already closed shop there and it had that same sort of breathy, airy feel. So we'll see what happens. I wish them really good luck.
Karina Perkins
Another thing I'm going to add on the things that they need, I think again we'll come back to that kind of food and drink concessions. Like people are coming and they're visiting these places. If they are shopping at physical shops often, that's because it's a kind of social event. They're meeting up with friends. So I really think that food and drink element is another really great way to draw people in.
Sarah Lebo
Yeah. We saw people walking around carrying a glass of wine while shopping. Susie's take on that was, why aren't they sitting down and enjoying that glass of wine? But it is a unique experience that you're not getting at other stores. It feels very luxurious. I would also sit down and enjoy the wine. But to each their own.
Karina Perkins
Yeah. And like we said as well, the beauty, I think is a really important department for department stores. We've seen a lot of department stores here launching kind of full service beauty halls.
Sarah Lebo
Yeah.
Karina Perkins
Again, it's giving people those experience. Experiences that they can't get from shopping at home.
Sarah Lebo
Yeah. For our next field trip, Susie and I will get facials there.
Suzy David Canyon
I love it. The thing about beauty is it's in addition to it lends itself well to an experience, it's also something that you buy more frequently.
Karina Perkins
Right.
Suzy David Canyon
You usually buy mascara, if not three times a year, at least twice a year. It's a repeatable purchase that people feel very loyal to a brand typically. And so that's like a nice way to draw traffic.
Karina Perkins
It's also a relatively low price point purchase. So, you know, you go to Selfridges here, you might not be able to afford much in the shop, but you can probably afford a lipstick. So if you want to have a kind of souvenir from your trip to a destination department store, beauty is a great way to go. Like a new skincare cream or lipstick or something like that.
Suzy David Canyon
When we walked into that printemps on the far right, there was like chocolate and stuff. And I think that's the same as beauty. Like these kind of tchotchke sort of. There were candles. It was like very animated packaging, kind of really. It felt like Alice in Wonderland style. That is also maybe what you're buying to say you bought something at that.
Sarah Lebo
Store to wrap up. I'm putting you both on the spot. Answer this for me. The contemporary department store in 2025 needs.
Karina Perkins
To be blank, experiential.
Sarah Lebo
Suzy.
Suzy David Canyon
I would say department stores need to be well curated and their assortment needs.
Sarah Lebo
To be thought out, experiential curated and well thought out. I love it. Thank you both for being here today. Thank you, Karina.
Karina Perkins
Thanks, Sarah.
Sarah Lebo
And thank you, Susie for being here and for going on the field trip with me yesterday.
Suzy David Canyon
Thanks. It was so fun. It was so fun.
Sarah Lebo
We need to do more field trips. Thank you to our listeners and to our team that edits the podcast that is their department. We'll be back next Wednesday with another episode of Reimagining Retail, an E Marketer podcast. And Friday, join Marcus for another episode of the behind the Numbers Daily, an E Marketer podcast made possible by Connective Media by United Airlines Cup.
Behind the Numbers: Reimagining Retail – How French Department Store Icon Printemps Is Reinventing US Retail
Episode Release Date: April 16, 2025
Introduction
In this insightful episode of EMARKETER’s "Behind the Numbers" podcast, host Sarah Lebo delves deep into the evolving landscape of department stores amidst the rise of e-commerce and shifting consumer behaviors. The focus centers on the iconic French department store, Printemps, and its groundbreaking new flagship store in New York City. Joining Sarah are Suzy David Canyon, VP of Content for the Retail Desk, and Karina Perkins, an industry analyst from the UK. Together, they explore the challenges and innovations reshaping the future of retail.
State of Department Stores in the US
The discussion begins with an overview of the current state of department stores in the United States, prompted by the recent bankruptcy filing of Hudson Bay, a venerable Canadian department store chain.
Suzy David Canyon's Insights:
Karina Perkins Adds:
Challenges Facing Mid-Tier Department Stores
The conversation shifts to the specific hurdles mid-tier department stores encounter in maintaining profitability and relevance.
Suzy David Canyon Observes:
Karina Perkins Notes:
Evolving Mall Landscapes
The role of malls as traditional anchors for department stores is scrutinized, questioning whether the decline of mall foot traffic is reciprocally affecting department store performance.
Field Trip to Printemps NYC Flagship
Sarah and Suzy embark on an exclusive field trip to Printemps’ newly opened flagship store in New York City’s Financial District, offering a firsthand look at how a traditional European department store is adapting to the American market.
Store Layout and Merchandise:
Experiential Elements:
Absence of Technology:
Exclusive Partnerships:
Lessons for Contemporary Department Stores
Drawing from the Printemps experience, the hosts distill key lessons that contemporary department stores must adopt to thrive in 2025.
Experiential Retail:
Curated Assortment and Exclusivity:
Enhanced Loyalty Programs:
Integrated Food and Beverage Offerings:
Beauty and Personal Care Focus:
Conclusion
The episode wraps up with a consensus that the future of department stores hinges on their ability to reinvent themselves as experiential destinations with curated offerings and exclusive partnerships. Printemps’ NYC flagship serves as a model for blending luxury retail with immersive experiences, catering to both high-end consumers and modern shoppers seeking unique, memorable interactions.
Sarah Lebo concludes by emphasizing the importance of continual adaptation and innovation in the retail sector to meet the evolving demands of consumers.
Notable Quotes:
Key Insights:
Conclusion:
The "Reimagining Retail" episode provides a comprehensive analysis of the current challenges and future opportunities for department stores. Through the lens of Printemps' innovative NYC flagship, it becomes evident that success in the modern retail landscape requires a blend of curated offerings, experiential elements, exclusive collaborations, and strong customer loyalty programs. As department stores navigate the complexities of e-commerce and changing consumer preferences, those that adapt by creating immersive and unique shopping experiences are poised to thrive.