rnet is supplanting the department store as the ultimate destination for a collection of brands; maybe Amazon is the new department store, the multi-brand offer of the future? Will the traditional department store format become the retail white elephant, a huge slow moving institution with an illustrious past and an uncertain prospect? 1. The department store redefined We see a movement towards specialisation, relocation out of town, and downsizing, for deeper consumer reach. Perhaps we’ll see the department store become the antithesis of what it’s known for, see its overall breadth and scale reduced. The department store could be seen as a specialist delivering advice and expertise, rather than the ‘jack of all trades, master of none’ format of the past. We are seeing department stores begin to specialise, which will also break down our understanding of what ‘department store’ means. Selfridges’ new men’s Shoe Gallery brings together a persuasive and authoritative collection of top brands in one space, a true destination, – but it could also be a standalone store in its own right, although this would only be possible due to the strength of the Selfridges brand, a brand built on a mix of innovation, scale, history, and its iconic Oxford St, London position. Similarly, recently opened menswear standalone, Saks Fifth Avenue Man in Beverly Hills, is a fantastic example of a brand modernising its heritage. It exports its New York roots, bringing to Los Angeles a lifestyle menswear offer with the brand’s authority and a New York twist. 2. The rise of the mono-brand Department stores need to reassess their competition and re-establish themselves as the destination of choice. Alongside the threat of the internet is the continuous growth of global mono-brands, such as Zara and H&M, and large footprint players, such as M&S and Target (US). These retailers are responding to consumer confidence in their offer, adding size and services, moving outwards from their fashion roots and high street locations, to become the new anchors in shopping centres. UK fashion retailer, Next, is ever broadening its offer, from a traditional fashion business, into sport, perfumery, home, and now gardening and DIY. M&S’s new Cheshire Oaks store is a destination, pretty much a day out for some customers, with its extensive offer that now extends into beauty, personal finance, and insurance. These retail giants can no longer be described as just ‘shops’. Supermarkets, too, have become department stores for the value customer, with their huge range, burgeoning footprints and e-commerce offers. To survive and flourish, a department store must continually evolve. Consumer expectations are so high these days that innovation has become the real differentiator. Service, display, and product innovation are a must in order to continually surprise. 3. Local narrative Build on your position within the community, reach out to your customers, and offer more than they expect. By capitalising on its local roots the department store can beat the negativity and become the local hero. A local narrative can be built in many ways, engaging with the community by offering space for local organisations, events, and initiatives. The department store’s role within the community it serves can be a fundamental factor for its success, for it remaining relevant, trusted, and admired. Another way to connect with the community is to offer specialised products and services unique to the local store. As part of its recent relaunch, the Siam Centre in Bangkok signed up a range of brands that presented food and other products only available in that mall. Digital technology facilitates a closer connection with the community. There are apps that deliver personalised and location- based offers and services, but integrating digital into your store can also allow you to play with the size of your format to service more customers. John Lewis’ new small format ‘boutique’ department store, in Exeter, UK, has done just this, reducing the classic 150,000sqft concept to just 70,000sqft. Enabled by technology, the brand has been able to open in a location that would never have previously supported it. There have been huge benefits to John Lewis’s e-commerce sales in that locale. As the physical store becomes a constant reminder of the brand in the local psyche, this increases online trading beyond the store itself, on a regional scale. 4. Brand building Be true to your roots, understand your strengths, and build your brand around them. A department store needs to learn to think like a brand and, more than that, act like a brand – not simply a collection of disparate offers, a name, or a building. It needs to examine its DNA, understand what it does best, and what its customers expect from it, and translate that into action. A department store should own the conversation with its customers, above the brands it houses. Selfridges has always been seen as a retail innovator. Today it’s building on this strong brand attribute and still challenging the norm, with innovations such as ‘No Noise’, a space dedicated to tranquillity and relaxation away from the bustle and overload of modern life. It may appear frivolous and indulgent, but events like this bring global publicity and creative credibility, giving the department store a ‘glow effect’ that infuses through the brand. Having defined what you stand for and who your customers are, build a clear strategy that pulls on your brand’s values, heritage, and expertise, to connect with your customers and offer the most compelling retail environment. 5. Retail theatre You need to excite and entice your customers. Use the breadth of your offer to enable retail entertainment. Scale can certainly be seen as an advantage for a department store; with scale there is the opportunity to showcase in an immersive and truly engaging way. Space can be used to create experiences beyond purely selling – brand building experiences that are linked to a wider strategy and give something unexpected, social, educational, and entertaining. A department store can use its unique proposition to its John Lewis’, suite of services advantage, cross-merchandising from all departments and bringing together complete stories across ranges and categories. There is some very expressive work coming out of South America: Liverpool in Mexico City and Paris in Santiago are both fully embracing this theatrical trend and taking it to a new level. Department stores can offer multi-sensory experiences that the web can’t match. More than sight and sound, all the senses can be involved: smell, touch, taste – true retail theatre that only the physical store can provide. The scale of the department store allows customers to lose themselves in a truly persuasive, all encompassing brand experience. 6. Inspiration vs. aspiration Try not to be swayed by the allure of luxury – it’s more about inspiration than aspiration. We have seen a trend, over the past decade, for department stores to become luxury and appeal to an increasingly wealthy clientele. But is this sustainable and the route for all department stores? It’s true that we will always aspire, but we don’t want to lose that aspiration in a veil of exclusivity. We need to be more democratic in offering luxury to the many, not the few. People have come to expect higher levels of service; store environments should be offering the best quality experiences the brand can afford. Personal shopping, once the preserve of high end retail, is now the norm, with stores such as Topshop and Forever 21 offering it to the young and fashion hungry. The size of the global middle class will increase from 1.8 billion in 2009 to 3.2 billion by 2020. Our focus should be on developing that rich seam of the burgeoning middle class, while remembering that luxury has an important place at the top of that mix. 7. Holistic digital New technology can help retailers to better understand and connect with customers. The stronger the connection, the more rewarding the outcome; embrace the digital revolution in everything you do. Increasingly, the consumer is using and exploiting new digital channels to connect, share, and compare, 24 hours a day, with friends, followers, and favourite brands. The potential to connect with a customer at a level never before achievable is huge – you can be their friend, their advisor, their inspiration. At the John Lewis Exeter new ‘flexible’ department store format the full offer is presented, but in half the space. Increased display density is step one, but the concept of showcasing stock to be purchased in new ways through a more integrated and considered use of instore technology is the key. This approach, through the use of stronger and denser visual merchandising, customer service, and digital tools, plays to one of JLP’s strengths: being an informed editor for the customer. The technology needs to work alongside the physical store in a holistic way that creates a seamless and relevant offer. Instore apps with built-in navigational tools; member only access to events and promotions; blogs and social media, allow the store to respond to customer needs, act decisively on complaints, and capture micro- trends. All of these tools can help the department store deploy the right strategy to reach customers. 8. Be social Build a rapport with your customer through social media channels, while at the same time articulating your physical space to accommodate this social interaction. Shopping is social. It’s embedded in our habits, it’s cultural and important, and it’s not just about capitalism and consumption. It’s vital to offer customers a place that feels personal to them and relevant to their lives. Using its biggest attribute – physical space – a department store can create truly social destinations that allow real interaction. The department store can become a leisure destination where culture and commerce cohabit. It’s the perfect vehicle to encourage dwell time, an open invitation to browse. These spaces can be linked to local clubs or organisations and the store can be seen as a benefactor giving something back, but most importantly, embedding itself in the heart of the community. Isetan Shinjuku reopened its Tokyo flagship with the introduction of a fashion museum. Playing on its fashion heritage, it delivers a unique cultural experience and a world-class destination for fashionistas. Westfield in Sydney has created an exceptional food offer.The quality and variety curated there is impressive, as is its authenticity, with fantastic purveyors all vying for business in this energetic social space. Such spaces are testimony to the intrinsic values of the stores themselves, but also gives the customer relevant, cultural, and persuasive experiences that resonate within their life. 9. A global offer With its seductive brand mix, the department store can export well. Choose the right market and you will be able to succeed where others might fail. The department store model has legs, it travels well. The scale and authority that comes with being an established player gives instant resonance and credibility. Some of the longest standing department stores are reaching out to new markets, either by opening stores in new territories or through new media channels. Technology is giving brands a global reach. Those with iconic names and a strong sense of brand are able to leverage their specialism and heritage. US department stores Saks Fifth Avenue, Macy’s, and Neiman Marcus now enable international shoppers to buy from their websites in their local currency. This level of exposure helps brands assess where their offers are being best received and can help them to define where global expansion may be most appropriate. In developing regions, department stores can lead the way in gaining a foothold where other lesser known retailers have little traction. 10. Are you being served? Service is a true differentiator. Whether it’s a concierge, personal shopping, bespoke tailoring, or first class delivery promise, service is king. People are often the difference between a memorable experience and a forgettable one. If your staff are motivated, knowledgeable, sincere and helpful, they can be a truly defining part of your customer’s journey. Add the right services, that reinforce that perception of personalisation and care, and you can win over even the most jaded shopper, transforming them into a brand advocate. The ability to react to and service customers instore is key. New technology lets you respond to your customers on a personal level and mobile technology can help create an even more personalised service. Neiman Marcus has an app that recognises when a customer is instore and gives tailored offers and fashion advice. Alongside the use of technology there are many easy wins. Free instore WiFi, crèches, spacious fitting rooms, personal shopping, concierge service, luxurious bathroom facilities, and wide shopping aisles are all great ways to add to the overall service proposition. Alastair Kean is group development director at UK specialist retail brand, digital, and design agency, Dalziel and Pow. For more information, visit www.dalziel- pow.com, or email Nicola Kelly on n.kelly@dalziel-pow.com. This story originally appeared in Inside Retail Magazine’s August/September 2013 edition. The October/November issue, featuring Inside Retail Magazine’s annual 50 Most Powerful Retailers List is available now. For more information, click here.