How Seriously Are Department Stores Struggling With Gen Z?

In a recent examination of department stores’ cross-generational appeal with shoppers, CNBC’s Jessica Dickler and Ana Teresa Sola made the case that not only were older Americans showing continued interest in in-store shopping at department stores, but that despite continued appeal to Gen Z by these retailers, there remained a divide between the two cohorts.

Beginning by noting that department stores could be losing a bit of luster with younger Americans, the authors pivoted to discuss some of the reasons why boomers were still showing up to spend, citing Circana’s chief retail advisor Marshal Cohen on the subject.

“[On comparatively generous return policies, promos, and discounts common to department stores] If you can learn the benefits of what a store brings you, it creates a much greater experience,” Cohen said, also noting that the option of having a sales associate wait on you, learn your stated needs, and then perhaps locate and ship a desired item to you at no additional cost, “That’s a big perk.”

By contrast, Cohen noted, younger shoppers may adopt a mindset of “I don’t want to shop where my mother shops.”

Department Stores (Notably Macy’s and Bloomingdale’s) Show Persistent Interest From Older Americans

Consumer Edge data was pulled by Dickler and Sola to underscore one point: Concerning these two stores, the bulk of customers shopping there are over the age of 45. Further, per a March Capital One report, boomers are far more likely to report that brick-and-mortar shopping is their most common way of purchasing, greatly outpacing the percentage of Gen Z respondents who indicated the same.

“The younger generation grew up online. The challenge for department stores is to break that paradigm,” Cohen concluded.

And with social media, in particular TikTok, creating a paradigm TD Cowen retail analyst Oliver Chen described as “the tiktokification of retail” for Gen Z consumers, Dickler and Sola pointed to the problems posed by relying too heavily on e-comm options.

Bracketing, which could add both excessive costs and time wastage in addition to environmental concerns, was one — as was the notable increase in stricter return policies coming online from e-commerce players, perhaps, at least partially, in response to the aforementioned practice.

On the other hand, however, a number of department stores have bucked this trend in a move to create differentiation: According to the AARP, the top five retailers on this score are Costco, Kohl’s, Nordstrom, Target, and Walmart, all known primarily for their physical footprints, even if online shopping options are on the table.

“There are some savings opportunities that you have when you shop in person that you probably wouldn’t have online,” said Edgar Dworsky, founder of ConsumerWorld.org, per CNBC.

Bloomingdale’s Success Shows Luxury-Heavy Assortments Faring Better Than Traditional Inventory for Department Stores

Following a quick profile of personal stylist Nancy Quinn of Bloomingdale’s flagship in New York City — who noted that a depth of customer service set their store apart from online competitors, but who also noted that “A lot of younger people are shopping online” despite her attentive and personalized services being free to clients — the CNBC authors moved to note that while Macy’s continued to struggle (alongside JCPenney), Bloomingdale’s was showing resilience due to a “focus on the luxury brands that appeal to higher-income shoppers.”

“Selective higher-end stores” are outpacing the competition, in part because “middle- and lower-income consumers have been disproportionately negatively impacted by the rising cost of necessities,” said TD Cowen’s Chen.

There may be some hope for brick-and-mortar across age cohorts, however, despite inventory and pricing headwinds associated with physical retail, exacerbated by the ongoing tariff situation.

“It is ironic because everybody does love stores and humans want connection,” Chen added.