Susan Chandler
Chicago Tribune
September 25, 2005
What Do Shoppers Want?
Department stores struggle to meet their needs, but as sales numbers show: Service and quality matter
Kathryn Galainena, a busy Burr Ridge mother of three, knows what she wants from a department store.
She wants quality merchandise and lots of styles. She wants clothes she can't find at other stores, unusual pieces that have friends asking "Where did you find that?" And it all has to be wrapped up with a certain level of service.
"I like to see salespeople who are available, who know how to work the registers, who don't have to ask a supervisor to do a return," she sighs. Then she adds: "I haven't been getting it from Marshall Field's, that's for sure."
There's the trouble.
Folks like Galainena, who feel a long-standing attachment to Field's and still shop there for basics like kid's clothes, are dissatisfied with the overall experience they find at their hometown department store today.
That helps explain how Federated Department Stores justifies ditching the venerable Marshall Field's moniker in favor of its Macy's nameplate. Many shoppers with fond memories of browsing Field's and lunching at the Walnut Room don't spend their money there anymore--or do so rarely.
The question remains: Can department stores like Macy's give shoppers what they want these days even as discount chains like Target and Wal-Mart co-opt designers to create fashionable apparel and housewares at lower prices?
They can, and some of them are, say retail experts. Upscale merchants Neiman Marcus and Nordstrom are leading the way with impressive sales gains and high marks from customers, unhindered by H&M's fast-fashion knockoffs or Target's expanding version of cheap chic. Federated's two chains, Bloomingdale's and Macy's, are gaining market share as well.
But other department stores like Field's and Lord & Taylor have lost their way, cutting costs and service, playing the bargain game and turning off shoppers with a me-too assortment of the same national brands: Tommy Hilfiger, Polo Ralph Lauren, Liz Claiborne, Jones
Underlying much of the decline is a dramatic shift in the power relationships between retailers and their suppliers, argues Neil Stern, a retail consultant with
Local department stores once acted as the buying agent and style interpreter for their customers, picking and choosing items from manufacturers' collections that they believed would be a hit.
That began to change in the 1980s as suppliers began building their own shops within department stores. These brand boutiques allowed designer Tommy Hilfiger, for example, to showcase his preppy red-white-and-blue apparel in an area complete with chunky oak tables and plenty of flags.
Department stores welcomed the boutiques. Suppliers paid for the cost of building and furnishing them, and sometimes subsidized the salaries of employees.
For a while, the branded shops were something that set the early adopters apart. Brand-minded shoppers liked them, too, because they didn't have to search through racks to put together an outfit by their favorite designer.
But by the late 1980s, the strategy was backfiring.
"Tommy Hilfiger came in and created 300 shops. Now every one of the department store anchors has a Tommy shop and a Liz shop," said Stern. "It gave vendors more control and it also was a real estate grab. There was no real defined reason to go to Marshall Field's because it has X, X and X that
Georgann Humphrey, an art director and longtime Field's shopper, puts it this way: "There are no surprises anymore in Marshall Field's."
Nordstrom and Neiman Marcus didn't follow the crowd, and now they are being rewarded for it.
Nordstrom, the Seattle-based chain, groups its fashion according to style, not manufacturer. In the women's department, more conservative brands like Dana Buchman and Barry Bricken are arrayed on one side. Edgier, more fashion-forward looks such as Marc by Marc Jacobs and Anna Sui are on the other. Casual clothes are divvied up the same way. So is the men's department.
Similarly, Neiman Marcus has always prided itself on the taste of its buyers who cherry-pick the designer collections and work closely with suppliers to improve or tweak products for the Neiman's customer.
Death of exclusives
In the old days, shoppers flocked to one department store or another because each store had some merchandise the other didn't. In retail parlance, it's called an "exclusive," an agreement by a supplier not to sell the same merchandise to anyone else in the same territory.
But as suppliers grew more powerful and gobbled up a host of smaller brands, retailers lost much of their power to negotiate exclusives, retail consultants say. It certainly happened in the cosmetic aisles where giant Estee Lauder now owns the lion's share of department store brands including Clinique, Estee Lauder, Origins, Prescriptives, MAC, Bobbi Brown and Stila.
Exclusives also became rarer as department store chains began invading each other's turf. Once upon a time, Nordstrom was a
That allowed high-end brands to cut deals for regional exclusives. But as Marshall Field's turf was invaded by one high-end department store after another, it no longer had the buying clout to be the only department store in town carrying high-end lines such as Giorgio Armani, Max Mara or Jean Paul Gaultier. The same evolution has played out in other major metropolitan areas.
Department stores have struggled, with limited success, against the homogeneity sweeping their stores.
Marshall Field's always had Frango mints. Macy's has a deal with teen apparel-maker American Rag to produce items that are sold exclusively in its THISIT juniors department (pronounced This Is It), which features an industrial feel and a booth where disc jockeys spin records.
Promise in private labels
But the major department stores have tried to fight back with private-label brands--lines that are designed in-house and then manufactured on a contract basis usually with overseas factories.
Neiman Marcus sells its own cashmere sweaters, pants and turtlenecks. Nordstrom has its Facconable line of dressed-up sportswear for men and women, a Parisian brand that it first invested in and later bought.
But few retailers have taken the idea as far as Macy's.
Macy's promotes its INC apparel brand as if it is a true designer label. It buys advertising in Vogue magazine and takes out full-page newspaper ads to showcase its new lines. A few years ago, it hired a celebrity spokeswoman--Heather Mills McCartney--to put a face on the brand just like Louis Vuitton is using actress Uma Thurman this year to promote its high-end handbags.
Terry Lundgren, Federated's chief executive, calls INC "one of the best-selling brands in American today."
Sales of INC total several hundred million dollars a year, Lundgren said. And private-label sales for the combined Federated and May Department Stores Inc. will total $3.5 billion next year, Lundgren predicts, adding "That's substantially larger than Marshall Field's is in total."
Sales associates set tone
When shoppers complain about the decline of department stores, it's not just about the merchandise, it's also about the service.
Cost-cutting in the 1990s eviscerated the sales staffs of many department stores and left the sales floor filled with poorly trained employees who barely knew how to ring up a sale.
In many stores, shoppers still are forced to wander around looking for someone to help them.
But walk into Nordstrom's shoe department and within a minute or two, it's likely you'll be intercepted by a greeter who will summon a salesperson to help you. At Neiman Marcus, real people still answer the general number and direct shoppers to the correct department.
Everyone aspires to Neiman's and Nordstrom's level of personal service, but few department stores succeed, Stern says.
Robert Mettler, chief executive of Macy's West, agrees that sales associates play a key role in determining whether shoppers have a good experience in a store.
That's why he is investing in training that tries to match the interests and qualifications of sales clerks to the areas they are selling in. For example, someone with an interior design background would likely be assigned to the housewares department. Another person with a fashion background would be better suited to selling apparel.
"When an associate doesn't feel comfortable with the product, they don't perform very well," Mettler said. "They're almost afraid to talk to customers."
In addition to training, Macy's is using technology to aid its sales staff. Cash registers now allow sales clerks to locate an item anywhere in the chain on a real-time basis.
Scanners are placed where customers can use them to see how a 40 percent-off sale will reduce the original price. Macy's is testing a radio frequency technology that will allow sales associates in the shoe department to find out whether a style is available in the customer's size without disappearing for minutes to search the stockroom.
Whether that will be enough to win over shoppers angry that Macy's has replaced the Field's name is a hard call at this point.
Galainena, the Burr Ridge mom, says she isn't inclined to give Macy's a chance to wow her. "Tradition is very important to me. To destroy our legend is a terrible thing for
But Humphrey, the art director from
"Of course, I'll give Macy's a chance. I think most people would love to go back to Marshall Field's and find the things they used to when Field's was a fun place to shop."
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