Department Stores Must Step Up To Survive | PYMNTS.com
Retail

Ex-Nordstrom Exec Says Department Stores Must Step Up To Survive

Department Stores Must Step Up To Survive

A former Nordstrom executive is calling on the department store sector to meet the needs of customers and keep pace with technology – or face extinction.

In a Q&A with the National Retail Federation (NRF), Kathy Gersch, founder and executive vice president at Kotter, a retail consulting firm in Seattle, said that the explosion of eCommerce, expansion of brick-and-mortar stores, financing through debt and arrival of COVID-19 have brought stores to the brink.

“Some (department stores) began evolving a long time ago, and others have not evolved as quickly,” she told the world’s largest retail trade association. “Certain companies financed a lot of their business through debt, resulting in moving toward bankruptcy quickly in these times, because they couldn’t withstand the sudden shutdown of stores and revenue that came with the coronavirus pandemic.”

While department stores were once the economy’s bright light – offering shoppers convenience, variety and what Gersch calls “the adventure of discovery” – these same retailers have dimmed.

But she insists there’s still an opportunity for a resurgence.

 Across the board, she said, some department stores are using these unique times to accelerate the reduction in their physical footprints.

“This has provided an opportunity to step back and evaluate and accelerate work that probably would have happened under due course anyway,” she said. “You’ll see the rightsizing of portfolios as we come out of this. In addition, retailers that have more flexible supply chains or more advanced supply chain capabilities have been able to withstand this better than those that do not.” 

Still, Gersch said that while the pandemic has accelerated the move to online shopping, she does not believe it will go back to pre-pandemic levels.

 “I don’t believe brick-and-mortar is going away by any means,” she said. “There will still be a place for it, but that place has long needed to evolve…No retailer will be successful if they see it only as a physical location for store inventory. It has to have a more relevant role for the consumer.”

And it isn’t much fun to shop or be entertained if customers and staff must wear masks and social distance. “That’s part of why online and mobile commerce will continue to be a bigger share of wallet,” she said.

Gersch said the last four months have been an emotional roller coaster for retailers and shoppers.

“There’s not a person on this planet who can tell you, with any level of confidence, exactly what’s going to happen a month from now,” she told the NRF. “But being transparent, engaging and communicating often, rather than trying to have the perfect answer, is the better approach.”

——————————

PYMNTS LIVE ROUNDTABLE: TUESDAY, JULY 14, 2020 AT 12:00 PM (ET)

Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

TRENDING RIGHT NOW