Saturday, February 21, 2009

The decline of dedpartment stores, chapter 50 (or so)

The Dallas Morning News has an interesting article, "Shoppers departing department stores - and may not be back" hitting on a theme I've posted on often -- the terminal decline of what was once America's principal shopping channel.

There are a few good statistics in the article, one being that there are now ten chains in the category doing $3bil or more; collectively they do $110bil, which is about one-fourth Walmart's sales. How the mighty have fallen.

The most interesting line from the article is this one:
The new mantra for one of America's oldest retail categories: When the economy rebounds, everything will go back to the way it was.
It's probably true. For those chains that survive the recession, things will return to normal. "Normal" for this channel, however, is a long, slow decline. In the almost forty years I've been observing department stores (my first job in this business was in the advertising department of Goldwaters in Phoenix) I have watched them go through several economic cycles. In each recession, they hit a bottom that was a bit lower than the last time; in each recovery they reach a top that was a bit lower.

Meanwhile, brands that have for decades been sold exclusively through department stores are looking for other ways to reach their consumers. An example cited in the article is Estee Lauder, which is now sold on-line. If my brand were heavily dependent on department stores for distribution, I'd certainly be seeking alternatives.

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