Department stores will perform better this holiday season. However, before anyone gets too excited, there are two caveats.

First, demand over the Black Friday period was up across all of retail. A rising tide floats all boats, but it does not stop ones with holes in them from sinking. And department stores still have plenty of holes to plug.

Second, last year’s comparative numbers were very weak. A modest rise after a big fall does not mean you’re anywhere nearer the summit of the mountain, And boy, do department stores still have a mountain to climb!

Some credit has to go to Kohl’s for the creative things they have done with ranges and store layouts. And J.C. Penney was really onto something when it put Sephora in stores. And Macy’s has made some strides in departments like footwear.

All that said, the model for most of these players remains broken and it will take more than a reasonable Black Friday to fix it.

The department store segments are certainly benefitting significantly from increased demand and improved overall economic optimism. However, now is not the time to celebrate and slow down their concentration on improving the overall customer experience, and innovations, which are key to the department store’s evolution.

It’s too early to celebrate as the retail industry is up against some weak comparable sales numbers from last year.

As we move beyond Black Friday, Cyber Monday and the remainder of the holiday season, department stores have to do everything in their power to make their stores a key shopping destination once again. Curating your assortments, driving in-store innovations, experimenting with new brands products and overall focusing on the experience side of retail have provided dividends.

The department store segment must provide a compelling reason for customers to return to their stores, as the world of commerce is literally at their fingertips.

As we all know, New York City is not indicative of the rest of the country but I walked into Macy’s and could not wait to get out due to the crowds. I was in a mall in the Washington, D.C. area and it was also very crowded and was anchored by not one but two Macy’s stores. There was an article in The New York Times last weekend that stated Macy’s real estate was worth way more than Macy’s, especially stores in urban areas where they own very desirable properties. You could have fooled me with the crowds. Lord & Taylor on the other hand was a pleasure to shop because it was not crowded at all. So my guess is that if Macy’s can get though the credit card issues, and continue to close some stores as there are just too many, they may be able to make it.

As Neil indicates, it may be too little too late for department stores.

As the saying goes, “A rising tide lifts all boats.” So yes, as retail is widely expected to have a strong season, I do believe department stores will fare better, but there are still systemic issues that they need to overcome if they hope for long-term stability and growth.

While the retail industry touts improved performance I, for one, am not convinced that department stores will survive the seismic shift in retailing. The physical store as we know it is a dinosaur — enjoy it before it goes extinct. Any improvement is relative. The store continues to transform and evolve to meet the equally dynamic expectations of the digital shopper. It’ll be interesting to see what event and/or defining technology historians will look back on as the one that finally killed the store as we know it.

Kohl’s “is gaining traction with its buy online, pickup in-store (BOPIS) service with about 40 percent more orders fulfilled on Black Friday this year compared to 2016 … J.C. Penney reported increased traffic to jcp.com with visits to the site reaching their highest single-day level on Thanksgiving … [at Macy’s] consumers went online and visited stores to buy winter clothing.” Enough said.

Without online the ugly trend will continue.

Most of the anecdotal evidence and reports from retailers suggests that foot traffic was down, especially on Friday, but overall sales volume was good. This suggests that stores’ omnichannel strategies are working to drive total sales, instead of the “silo” effect of looking at e-commerce and brick-and-mortar as two separate businesses.

There is also a sense of higher discretionary spending, which will tend to benefit department stores along with off-pricers specializing in apparel. Early cold weather doesn’t hurt, either.

The lead in the discussion article says it all. There is definitely doubt about the long-term viability of U.S. department stores. Indeed, they face only a challenged future, and any performance gains are really just a blip. Consumers are growing less interested in large, complex stores. Online selling is growing and it’s growing in many of the categories on which department stores depend. Corporate sales for all three chains mentioned in the article are down this year anywhere from 1 to 6 percent despite some comp store increments. While Kohl’s is profitable, J.C. Penney is not and a sizeable chunk of Macy’s earnings stem from gains in sales of real estate. This is not the profile of an industry blazing a trail to new heights. These are beautiful stores, but they don’t have much of a future.

Yes, department stores will perform better this holiday season — mostly due to better overall retail performance, not necessarily due to their own actions. That said, the department stores that have invested in omnichannel, or unified commerce, and truly integrated the digital world into their shopping experience will outperform others. Convenience is king, and the department stores that have prioritized shopper convenience with not just BOPIS, but EASY pickup experiences in the store (translation — not a corner in the back of the store as an afterthought with long lines) will be successful at winning customers. The stores with great mobile app experiences that make it easier to find products and order them will do well. Those that have well-trained associates that can help customers find the right item will be winners. The key is that you need to have all of these things in place, not just one or two. Customers expect it all now, and if you don’t deliver you won’t sell this holiday season. Department stores better hope they planned their infrastructure… Read more »

As an old retailer once said to me, “all boats are floating this year.” I believe that’s going to be true this Holiday season. People are out, weather seems ok, there’s so many easy ways to buy, etc, etc. — it’s going to be a good one, you can smell it.

However, that doesn’t mean that department stores are out of frying pan. Their footfalls are down and their e-com still isn’t up enough (due their own slow-footed-ness over the last decade) to make this what it should be: a GREAT Holiday season. To me, they’re stuck in survival mode for the foreseeable future and first quarter will bring that to light.

According to the National Retail Federation, last holiday season represented a 4% growth across retail. However, department stores came in down 7% in year over year comparisons (see here). So, against that backdrop and early indications from Black Friday, I am optimistic that we will see better performance this holiday season. It’s true that department stores are challenged: more purchases are being made via mobile and online, foot traffic in malls is declining, and consumers are shifting to more experiential spending over pure materialism. For those reasons, the longer term prognosis is less rosy but need not be one of despair. In fact it could be the necessary pivot to a retail renaissance. The first of these challenges is a secular change for retailers and brands: mobile and online represent the future and the physical store needs to be part of that equation. And if we limit our horizon to the next 5-10 years, I believe the other two trends are firmly entrenched. However, that does not negate retailers and especially department stores from addressing… Read more »

If I answered this question this morning, I would have said absolutely not. Department stores will perform better than last year, but only because retail as a whole is performing better this holiday season. Numbers are up across the board. But I don’t think department stores will take a larger chunk of the pie.

BUT — NRF just released their Thanksgiving weekend shopping data including stats showing that 50% of 25-34-year-olds shopped department stores online and in-store over the five day period from Thanksgiving to Cyber Monday. So, now I am not so sure.