Department stores are constantly adapting their brick-and-mortar strategies to changing consumer preferences. Recent transformations include rightsizing measures and forays into the off-price market as well as smaller-format stores. Using the most recent location intelligence metrics on department stores, we dove into some of the visitation trends behind Q1 2023 foot traffic growth in the category.
Backstage Takes Center Stage
Macy’s continues to make headlines for its ongoing rightsizing efforts as well as the proliferation of the Macy’s Backstage off-price format, which now has over 300 locations. With the growing popularity of off-price shopping, it’s no surprise that Macy’s has invested considerably in Backstage venues.
Since January 2021, Macy’s as a whole has experienced overall positive visit growth. And Macy’s locations with a Backstage component lead the brand for that metric, proving that Macy’s can find success in the off-price market.
Nordstrom Going Strong
Nordstrom is also expanding its off-price formats – but its full-line stores are also seeing success. Luxury department stores seem more resilient to the economic headwinds, and Nordstrom traffic in particular has regularly outperformed the department store average, likely due to the continued demand for quality goods among high-end shoppers.
In addition to off-price concepts, luxury department stores are also experimenting with a variety of new formats. Bloomingdale’s opened its relatively new smaller-format store Bloomie’s in Fairfax, VA in 2021, and after a second location opened in late 2022, a third Bloomie’s location is earmarked to open this year.
Comparing visit metrics for the first Bloomie’s stores in Fairfax, VA and for Bloomingdale’s locations nationwide revealed that Bloomie’s drove visit peaks in the early afternoon and evening while visits to Bloomingdale’s peaked in the afternoon. And Bloomie’s visitors tend to stay longer than visitors to Bloomingdales, with a median length of stay of 39 minutes and 36 minutes, respectively.
Bloomie’s offers a curated assortment of merchandise along with food and drinks that attract consumers looking to turn shopping into a social activity – particularly in the evening. The Bloomie’s format has demonstrated its capacity to drive evening visits from pleasure-seekers while sustaining midday visits typical of the Bloomingdale’s brand. And even though Bloomie’s is significantly smaller than a typical Bloomingdale’s, because there is so much to do and see at Bloomie’s, visitors spend longer in-store and engage with the brand.
Last but not least, Kohl’s started 2023 strong with year-over-year (YoY) visits trending upwards in comparison to the final months of 2022. And while Kohl’s has garnered much attention for its successful Sephora shop-in-shops – which are expanding in 2023 – the increase in visits to the chain as a whole are noteworthy in their own right.
Kohl’s YoY visits received a significant boost in January and February of 2023, at least partially impacted by the comparison to the Omicron-plagued period in 2022. But even taking that comparison into account, Kohl’s YoY visits were on an upward trajectory. While Kohl’s YoY visit gap reached 13.9% in October 2022, in March 2023 the chain’s YoY visit gap was just 5.8%. And although the April visit gap grew to 11.5%, the brand still outperformed the Mid-Tier Department Store category, which saw its YoY visit gap widen to 19.2%.
The Final Tally
There were plenty of shining stars in the department store space in Q1 2023. From luxury retailers to mid-tier brands, the department store category is finding ways to capture visits and the attention of shoppers in an ever-evolving retail landscape.
For updates and more location intelligence insights, visit Placer.ai.