Even before the outbreak of COVID-19, department stores had been under pressure with the channel losing sales to other retailing channels and e-commerce. The decline continued in 2020 as the first national lockdown in April resulted in significantly lower footfall in stores.
Like variety stores, department stores are under threat from various apparel and footwear specialist retailers, as local consumers increasingly demand curated aisles of products from their favourite brands. They have already done their research online and know what they want and need.
In the wake of pandemic-related bottlenecks, rising costs and demand, and increased need for products over services, it has caused a logistical nightmare for retailers. Freight costs on key global container routes have increased significantly compared with the previous year off the back of a perfect storm of pandemic-related supply chain disruptions, labour shortages and rising consumer demand.
E-commerce platforms from leading department stores Myer and David Jones continued to expand and see impressive growth in 2021. Therefore, adopting an omnichannel strategy is expected to be one of the main pillars of growth for the retailers in the future.
Australia lifted its travel and lockdown restrictions in December 2021, offering hope to retailers across the country that this will provide much-needed improvement in terms of inbound tourists. For department stores, this is essential to ensure greater footfall to stores.
Department stores in Australia have been undertaking further restructuring to downsize and negotiate shorter leases as the channel adapts to new shopping habits and how consumers use shopping centres in the post-pandemic era. Reducing selling space has been a more successful strategy than closing a store entirely because the physical store’s presence is important for omnichannel delivery services such as click-and-collect.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Department Stores industry in Australia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
Department stores are chained or independent retail outlets that usually exceed 2,500 sq metres of selling space, are typically in high-street or shopping mall locations, and have a primary focus on selling a range of non-food/drink/tobacco merchandise across several categories in different departments. Department stores usually have a mid-to-upper price positioning. Example brands include Macy’s, Marks & Spencer, and Takashimaya.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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