Should I launch my own department store?
Are department stores dying? I’m thinking of setting up one – on a more boutique, and smaller, scale than Myer or DJs, of course.
Department stores – a retail institution that dates at least as far back as the mid-1800s – have been trying to reinvent themselves for years, with mixed results.
They followed shoppers from the city to suburban shopping centres – upsizing and downsizing as they went.
They are facing considerable disadvantages. There is a fine line between offering a broad assortment of products and being cluttered.
I don't think department stores serve as a good showroom. There's so much stuff in there and not enough editing to make shopping simple.
Not only do department stores sell a lot of merchandise, but they often sell the same kinds of merchandise – which makes it hard to stand out.
For the past 20 years the department store has been shrinking as a percentage of retail sales. Maybe Asia holds the answer.
Many department stores in Asia are organised by brand, and include "mini-stores" within a larger space. In China, Korea and Japan, department stores lease out space to brands in the store and act more like landlords. The brands put the labour on the floor.
In the days before the internet, department stores used to be the primary discovery place for consumers on the hunt for a new appliance or a new wardrobe.
Today mobile is everything. The killer app is mobile. People used to go to stores for information and research. Today all the information is already in their hands.
I personally believe that the shopping centre is the new department store with the individual stores acting as departments.
There is a place for department stores but reinvention is a necessity: Utilising all the channels favoured by customers without forgetting the oh-so-wished-for well-trained staff – and enough of them!