What happened to Department Stores?

I just returned from my newly instated 'yearly sabbatical' last week. This year, I decided to cover New York City, Boston and San Francisco, and boy did these cities keep me busy. It had been a couple of years since I had been to New York, and it feels so good to be back.

I came to New York for many reasons, some personal, some professional. But one of the reasons was to visit New York's department stores. In New York, these aren't just large stores, they are temples of consumerism, they are institutions in their own right. They are the place to go to take the temperature of what is 'in' this season.

The truth is, Australia doesn't do department stores well. I know you know what I mean if you've ever set foot in a Myer or David Jones. I am not trying to be rude or defamatory here, it's no secret that, as a retail experience, the Australian Department Store is failing. We could just blame the rise of online shopping, or we could ask the harder question: when did department stores stop being relevant and why? Is there any future in the concept of a department store?

In the past year or so, I've really come to understand 'retail' as a core use in the city a lot more. While some in the industry would tell you that retail IS placemaking, I personally don't believe that to be the case. I can see plenty of examples of thriving shopping centres that aren't good places, places that serve certain purposes such as convenience, but don't create emotional connections.

But if place and retail were ever equated, it would have to be in the early days of the department stores. Department Stores are not really a retail innovation. Sure, they did revolutionise the shopping experience by creating a one stop shop for specialist retail, a more centralised approach to inventory management and upgraded the in-store experience. It is also where the concept of 'pret-a-porter' (or ready to wear) invented by Charles Worth, really took off. Before then, every piece of clothing was tailored and therefore bespoke.

But the department store also created a public space for women to enjoy. Prior to that, the home was the place of the respectable woman. The streets were off limits and public spaces were definitely not places to be seen. Much like the tea houses of Victorian Sydney, department stores around the world were giving a place for women to meet in public, to create public bonds and to affirm their identity. 

There are many other people who can and have documented the far-reaching impacts of the department store as a social innovation, not least Emile Zola, my favourite author, who wrote a novel about the department store called 'Au Bonheur des Dames' (or The Ladies Delight in English). He placed his protagonist in the middle of this social revolution, first as a sales lady and then as a joint director of the operation. 'Au Bonheur des Dames' never existed per se, but Zola often used real life inspiration in his novels. In this case, the inspiration is supposed to be 'Le Bon Marché', one of the best department stores in the world, if you ask me.

The social role the department store played in the 19th and early 20th centuries is important to remember because the department store relied on women as consumers to thrive, and therefore were willing participants in the emancipation of women (to differing extents) to enable women to make decisions about where their money (whether they earnt it themselves or not!).

The department store bumbled along quite comfortable through the 20th century. With the suburbanisation of our cities, the department store also became suburban: JC Penney's, Sears and in Australia, lesser versions of Myer and David Jones in outer suburbs and regional towns. And now, with a large property portfolio to manage, the question is more than ever on the table: Is the department store relevant in the 21st century? If so, in what capacity?

This is an issue that all department stores are tackling in one way or another. Some will foreground fashion and its cycles as their raison d'être, other conveniences and inventory. Some notable examples, such as Selfridges, will create a complete product experience, engaging people such as The Future Laboratory, to develop bespoke offers for its stores such as the Fragrance Lab covered here by Creative Review UK. Selfridges is also the home to the world's first Champagne vending machine, which is, of course, everything you could need when you're shopping.

For this article, I was hoping to do a little survey of department stores that traces their origins but more importantly their positioning in the current retail context. The US is still home to a wider variety of Department Stores, some urban, some suburban but the list is pretty much endless: Nordstrom, Bergdorf Goodman, Neiman Marcus, etc.. A comprehensive survey could the object of another trip.

Saks Fifth Avenue, New York

Saks Fifth Avenue (the original) is a cornerstone fashion institution located right across the street from the Rockefeller Center. It's a multi-storey affair that focuses uniquely on fashion for men and women. Even though its flagship store is in the heart of New York City, the expansion of the Saks Fifth Avenue empire closely mirrored the urbanisation and suburbanisation of America. The business was able to achieve massive expansion between 1924 and the late 1930s, boasting more than 30 locations at that time.

However, it seems that in the smaller urban markets within the US, Saks is experiencing significant difficulties. The company was recently bought by Hudson's Bay Company who are closing several locations and favouring instead an international expansion where the luxury markets are underserved. Their first port of call is Canada followed closely by, of course, Ryadh Saudi Arabia.

My assessment of their retail experience in this case is based on their flagship store. Everything about their in-store experience is about tradition, celebrating the heritage fabric of the building (which makes for somewhat awkward circulation), vintage elevators and a champagne bar (quite tacky I must say) on one of the floors. All the rules of effective retail environments are at play: no natural light, not clocks anywhere and floorplates full of merchandise.

The must-see at Saks is apparently the women's and men's shoe departments, which by all accounts, makes a big proportion of the flagship store's revenue. The shoe department is so much of a destination that it even gained its own postscode. Hard to beat that!

For me, Saks was an encyclopaedic approach to the department store. Almost everything that has been created in fashion is in the store, and therefore, it is a great barometer for what colours, fabrics, shapes, etc... are coming into vogue. Being the encyclopaedia is a legitimate strategy, but you've got to be comprehensive and rigorous about that. It becomes less about a curated style and more about access to virtually everything.

Barneys New York

Now Barneys is quite similar to Saks, yet quite different. Barney's is the temple of edginess and minimalistic chic. There are several Barneys stores in Manhattan, but the one worth seeing is on 60th and Madison, at the start of the Madison Avenue upscale shopping district of the Upper East Side. It is also on several floors and focuses only on fashion (no cosmetics or perfumes, as you would expect of other department stores).

Where Saks Fifth Avenue is more all encompassing, Barney's has a more curated approach to the inventory they carry. They also only really cover the really top end of the pret-a-porter market. So if you go to Barneys it is either that you have incredibly good and expensive taste that you can afford, or because there is a ridiculous sale, where all this is available at the fraction of the price.

From a geographical perspective, Barneys' strategy has always been the strategy that Saks is now coming to: focus on cities with a high concentration of individuals with wealth, instead of counting of a small proportion of Middle America's paycheck. So their stores are consequently few and far between, but very cleverly located: Beverly Hills, Chicago, and a collection of smaller stores in the US.

Barneys has been active in trying to embrace digital innovations. Firstly, 'The Window' is their in-house blog, that gives 'fashion insider access', really targeted at people on the bleeding edge of fashion.

Secondly, they have launched a series of digital wayfinding screens that allow shoppers to see what is on each floor before they get there. It's a little hit and miss if I am brutally honest, and the descriptions of the floors don't help you locate what you're looking for. They've divided each floor between men's and women's, therefore scattering the inventory across several floors under the label ' Designer's Collection', whatever that means... The screens have decent graphics but it is the information design here that has massively failed.

Third of course is the revamp of the 8th floor café of the flagship store on Madison. There you will find an interactive table that allows you to browse the content of the store in one location, using repurposed marketing content. You can watch a short video about the concept below.


Gumps, San Francisco

A lesser known member of the Department Store Family is 'Gumps', not named after Tom Hanks' character, but rather after the Gump brothers, Solomon and Gustav. What is today a pretty comprehensive department store started as a mirror and frame shop, not a fashion outlet. Slowly but surely, the Gump brothers started collecting art from the Far East and also selling it in their stores. It's a little unusual, but the store is home to one of the largest golden buddhas I have ever seen.

So part art gallery and part mirror shop, Gumps evolved into a specialist store for international style. I wouldn't say the current store on Post Street is stylish, it's quite gaudy and heavy, but it is reflective of a very focused strategy on this idea of craftsmanship. Gumps is also the exclusive carrier of a large amount of brands that I have never seen elsewhere in the US.

Their online presence really lets them down, making them look like a 'middle class' department store rather than an upmarket cross between an antiques shop and an emporium.

So what have we learned through this very short survey? What we have learned is that differentiation of your offer in the Department Store world is really key. These are all fairly conventional variants on what a department store could be, and I have yet to find a model that really knocks me off my feet, challenging the paradigm of space or choice or personal service (Selfridges comes closest though).

As both David Jones and Myer look at their future, they are going to have to work very hard at differentiating not only from one another, but from a plethora of online presences, from which Australians can easily buy much more current and on trend merchandise.