Department Stores in Colombia

PROSPECTS

Gaining strength by taking elements from other channels

Department stores saw a second year of strong current value growth in 2019, along with new outlet openings. These stores are extending their proposals to incorporate the strengths of other retail channels, which contributed to growth.

Benefiting from finance alternatives

Store cards and cobranded credit cards have been useful for retail brands such as Falabella and Pepe Ganga to increase consumer loyalty through dedicated discounts and rebates for cardholders. In the case of Falabella, it has a powerful model as it is vertically integrated with Banco Falabella, the financial branch of the company.

Diversity in the space and deals in stores, but e-commerce also grows

The improvement of the physical space, with new openings or remodelling, was seen in department stores in 2019. Instead of being concerned about the boom of e-commerce and the accelerated growth of other retail channels, players chose to venture into other markets in Colombia.

COMPETITIVE LANDSCAPE

Falabella maintains its lead and sets the pace in department stores

The evolution of department stores in Colombia has been strongly driven by the performance of the leader, Falabella de Colombia. Its Falabella retail brand has marked the model to follow by all players in this channel.

Brands benefit from their relationship with department stores

Whilst the weight that brands hold amongst average Colombians is generally losing ground when making a purchasing decision, brands are gaining strength if they can only be found in a particular channel, such as department stores. This helps department stores to boost their competitiveness and attract consumers, as they can find unique products and brands in these outlets, which adds value both to the brand and the store.

Adapting to meet the needs of consumers looking for savings

For Colombian consumers it is traditional to search for attractive but inexpensive products. In fact, “good, beautiful and cheap” is used as a slogan by one of the oldest and most traditional department stores in the country.

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