Department Stores in New Zealand

PROSPECTS

Department stores become an extension to the lifestyle trend

Department stores are traditionally positioned as exclusive shopping venues with a strong focus on product quality and customer service. However, with a growing number of consumers demanding new shopping experiences, brands in the category are expected to expand their product and service offerings to encourage consumers to spend more time in stores.

The shopping experience is improved to remain competitive

Some department stores have already started to offer a better shopping experience to attract consumers. The newest entrant, for instance, David Jones, is positioned as the go-to destination for premium groceries through offering an extensive range of gourmet food.

Department stores continues to face increasing competition from internet retailing

Over the forecast period, brands in department stores are expected to face increased competition from internet retailing. Department stores are traditionally positioned as “everything under one roof” shopping destinations, but with internet retailing offering a wider range of products at increasingly affordable price points, brands in the channel are gradually being displaced.

COMPETITIVE LANDSCAPE

Farmers continues to dominate department stores

In 2018, Farmers continued to dominate department stores in value terms, far ahead of Smith & Caughey’s, David Jones and EziBuy. The brand’s lead in the channel can be attributed not only to its extensive store network, but also to its ability to reposition itself to remain relevant.

Farmers launches new formats to remain relevant

In November 2017, Farmers launched its new format speciality store, Farmers For You, offering a wide range of beauty and fashion products, such as cosmetics, fragrances and hosiery, to position the store as a go-to destination for all things beauty. Prior to that, in May 2016, the brand launched Home by Farmers, a new concept store which focuses solely on the brand’s offerings in furniture, appliances and homewares.

Players in department stores expand their store networks

Despite intense competition from online retailers and specialist stores, players in department stores continue to invest in expanding their reach through opening new stores. In 2018, well-established brand EziBuy, for example, opened its sixth store, in Tauranga.

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