How Department Stores Can Win Back Millennial and Gen Z Shoppers, Report

The State of US Department Stores The report paints a grim picture of the current state of US department stores: Sales Decline: North American department store retail groups experienced a 6% compound annual decline in sales from 2018 to 2023, accelerating from a 5% decline in the preceding five years.

Customer Indifference: Many US shoppers are indifferent or averse to the format. Net Promoter Score (NPS) Lag: US department store operators are no longer NPS leaders in key categories. For instance, in the women’s clothing category, their NPS among 18 to 24-year-olds is negative.

Demographic Reliance: The shoppers who still recommend department stores tend to be over 45, a demographic that cannot be taken for granted. Innovation Engine Stalled: Innovation is now incremental and siloed rather than customer-centric and cross-functional, making it hard to change shopper habits.

Top US Department Stores Can Reinvent Themselves To revitalize their businesses, Bain & Company recommends that US department stores focus on four key areas: Restore the Innovation Engine Department stores must make fewer, bigger bets and adopt a coordinated, cross-functional approach to testing and scaling new…