Following a torrid stretch for the channel, department stores saw improved sales in 2021, going some way towards recouping the heavy losses incurred during the previous year. Discretionary spending – particularly on categories like apparel and beauty products that had been largely neglected – returned in 2021 alongside in-store shopping.
One key reason that department stores struggled to the extent that they did during the pandemic, in addition to the precipitous decline in in-store shopping more broadly, was that the product categories that were of most interest to consumers during the pandemic were largely the domain of other retail channels. For many consumers, spending priorities in 2020 were fixed primarily on groceries and home entertainment, leading to a dramatic spike in supermarket sales.
Despite the long-term challenges associated with propping up their store-based sales, department stores have seen glimmers of hope accompanying the e-commerce surge. In 2021, leading players Kohl’s and Macy’s both saw e-commerce sales remain above 2019 levels.
The evolving relationship between direct-to-consumer (DTC) brands and department stores continued to fluctuate in 2021, with both finding reasons for optimism. For DTC brands, partnering with a legacy department store retailer immediately opens the door to a large network of bricks-and-mortar stores in which to operate.
The supply chain issues pummelling the retailing industry as it emerges from the worst of the pandemic have shone a spotlight on an often-overlooked issue – workers’ rights. Employees in hard-hit industries like retailing and foodservice were summarily dismissed from their jobs as lockdowns swept the country in March 2020, leading to the highest unemployment rates seen since the peak of the Great Depression in 1933.
After a period of immense turbulence, department stores are braced for further disruption as Amazon looks to expand its physical retail footprint. The e-commerce giant has already bought and converted a number of vacant department store outlets to use as fulfilment centres.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in USA with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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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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