by Michael Lowrey
The Charlotte Observer over the weekend had an article on “Why Belk was smart to sell itself when it did.” The reason, as you might have guessed, is that department stores continue to struggle despite a relatively strong economy. The article provides some informative insights:
Customers shopping online generally are looking for specific items and aren’t subject to impulse purchases the way they would be when shopping in a physical store, said Richard Jaffe, an analyst at Stifel. And that can be a challenge for traditional stores.
“E-commerce has fueled a secular change in apparel consumption; undermining total fashion apparel consumption and eroding profitability,” Jaffe said in a research note this week.
Another challenge for department stores: Younger consumers have different purchasing patterns than their parents. Young people, already burdened by student loans and smaller salaries, are opting to spend on experiences like concerts and technology like smartphones, rather than on clothes, industry experts say.
“The normative behavior of younger customers is not fixated on trend purchasing, at least not in apparel and accessories,” [Mark Cohen, director of retail studies and adjunct professor at the Columbia School of Business] said. “They have to have the latest iPhone, but not the latest sweater.”