The next generation of department store concepts may be located in Fairfax, Virginia.
Armed with a smaller footprint (22,000 square feet), a stylish selection of products and a tech-savvy space, Bloomingdale's new Northern Virginia location, Bloomie's, could point to a new direction for the sector. Or, at the very least, an alternative path.
"Our new Bloomie's store will deliver everything they love about Bloomingdale's in a highly edited, convenient, and unexpected way," Bloomingdale's CEO Tony Spring said of the concept earlier this year.
The store features a "tech-enabled stylist service model," and offers men's and women's apparel, shoes, accessories, activewear and beauty. It also has a returns dropbox, in-store and curbside pickup, alteration services and a front desk that answers customers' style needs. The store frequently rotates trends, hosts activations and features merchandise carts, which prompt product discovery. It also offers drinks and Cuban food via a local cafe, Colada Shop.
But will a smaller space, cocktails and coffee, and the ability to drop off online returns be enough to re-engage customers and get them excited about department store shopping?
Looking like a whole snack
The past few years have been especially unkind to department stores. It would be easy to point a finger to the pandemic and place full blame on a health crisis that changed daily life as the reason for their downfall. But, the reality is that COVID-19 only sped up decades of decline in the sector. Rapid expansion, company consolidation and a rise in e-commerce played a part in changing where and how people shop.
Then there is the decline of the mall. While in the past, malls served as an alternative to a city's main street, the appeal of going to one has been waning. Last year, Green Street analysts forecast that more than half of mall-based department stores could close by the end of 2021. And in the first part of this year, vacancy rates at "regional" and "super regional" malls reached a record 11.4%, according to Moody's Analytics REIS.
But, an interesting thing started happening. Retailers decided to take their stores outside of the mall structure. Both department and specialty stores — including Nordstrom, Victoria's Secret, Macy's and Express — have opened locations that are not mall dependent. Bloomie's is in that group, with its concept store in the middle of an outdoor shopping district.
"For most people the days of just browsing and wandering through the store and making shopping a day with lunch in the middle — that concept may be beyond repair," said Allen Adamson, co-founder of Metaforce. "So, the notion of trying different things is smart," he said of the Bloomie's concept, stating that it can be a way of getting "the best of Bloomingdale's" while allowing customers to get quickly in and out of a store.
And a quick pop in to the store is part of its appeal. Instead of wading through racks of merchandise, the Bloomie's product selection is curated and meant to frequently change so customers will "find something new to obsess over each and every visit" according to the company website. That means new deliveries are coming into the store multiple times per week.
"It's a showcase for you. I just want to see something interesting," Adamson said, referring to the benefits of being able to swiftly take in what is new at a store. "In today's time-pressed world, people just want a snack, they don't want a five-course meal."
Besides traditional merchandising, customers can readily discover products on carts located throughout the store, which are designed with flexibility and trends in mind.
That steady influx of products appeals to a younger demographic, according to Shelley E. Kohan, an adjunct professor at Syracuse University's Whitman School of Management and former employee of Macy's and Bloomingdale's for 17 years. "That translates into fresh goods, more frequency, more visits. And because they're creating a smaller environment, popping in and out of the Bloomie's store is quite easy and fun."
The right technology in the right places
Another potential draw for shoppers are various services that can be accessed at different points in the store.
Instead of a traditional cash wrap area, a front desk answers shoppers' questions and is set up to perform a variety of tasks like online pickups, returns, gift wrapping, alterations and styling. In that area, shoppers can also access a dropbox for online returns.
A QR code on a sign makes it easy for shoppers in the Bloomie's store to connect with an associate at Bloomingdale's New York flagship to discuss luxury handbag offerings. And fitting rooms have buttons that shoppers can push for assistance.
Stylists are also able to use tech to aid customers. That means they can access products not only from the Bloomie's store, but other Bloomingdale's locations and on the retailer's website as well.
It's not that all of this technology is cutting edge. (QR codes, for example, were invented in 1994 and have been used by retailers in the decades since, but gained widespread popularity during the pandemic.) Rather, it is the right mix of technology being employed in the right situations, according to Kohan.
"Certainly the pandemic accelerated, pushed retailers to have to figure out how to converge all these different enabling technologies to make the shopping journey and experience more convenient," she said. "So while a lot of the technologies have been around for many years, I think we're coming to a point that we're actually utilizing the right technologies in the right spaces that are relevant for the consumer."
Making it personal
While tech and convenience play an important role in the store, services that make a shopping experience feel personal are also emphasized. One service that lends itself to personalization is the location's monogramming station. Customers are invited to stylize their apparel through monogramming, embroidery, alterations or patches. This is similar to the Levi's Tailor Shop, which customizes products with sewing, pins and patches. The in-store service allows a shopper to easily add their own touch to apparel.
But, the biggest nod to a more personalized shopping experience is that every associate at the Bloomie's concept is a stylist and an expert in all categories of the store. That takes something from merely being transactional to relationship-building, according to Kohan.
"Unlike a lot of other companies that are really making customer service very self service — they are pulling back on a lot of personal connection and personal touch — Bloomingdale's is doing the exact opposite," she said. "They're trying to create a closer connection with the customer, a deeper loyalty, and their whole strategy is around personal connections."
In a study last year about personalization, McKinsey & Company brought home the importance of developing those bonds with customers. "[R]etailers must respond to the demand for personalized experiences not only to differentiate themselves but just to survive," the authors wrote. "When done right, though, personalization allows retailers to do more than merely survive: it enables them to thrive."
Many legacy retailers are getting that message. Macy's last year introduced both virtual and in-person stylist appointments. Nordstrom, which has long been known for its customer service, offers a variety of styling services so shoppers can get outfit recommendations or receive a complete wardrobe overhaul. And Neiman Marcus launched "Your Neiman's," a hub that offers personalized luxury services including the ability to collaborate with a store stylist.
And that thinking may move department stores from a mindset of just surviving to gaining cultural relevance once more.
The future of department stores?
Is Bloomie's the future of Bloomingdale's? Is it representative of the direction that most department stores should head?
Experts said that the most important thing the legacy retailer is doing with the new concept store is staying agile. That means it has the ability to repeatedly test things and make swift decisions.
Some retailers are already doing this by experimenting with neighborhood stores. Nordstrom Local, which touts itself as being a "Nordstrom experience a little closer to home" has multiple locations in New York and Los Angeles. Market by Macy's is a smaller brick-and-mortar concept with "neighborhood flair," according to the company. And even Nike has been playing with hyperlocalization as part of its larger fleet offering.
"Revitalizing the traditional department store has been tried for many years," Adamson said. "If you can grab something and see what's new and hot and zip in and out, that has a higher likelihood of being more relevant for today's consumers. And it's a lot easier to pivot and say, 'Oh that didn't work, let's try a different curation.'"