Former VP, Merchandising, Macy's Backstage at Macy's Inc
- US department store industry trends leading up to holiday season, including potential winners and losers
- Format experimentation plus brand vs private label dynamics
- Near-term headwinds across labour and inventory and long-term supply chain management changes
- Demand trends and shifting consumer behaviour – in-store vs online sales and category performance
Could you share your outlook on US department stores for Q4 2021?
What characteristics do you believe will determine the winners and losers in the upcoming holiday season, given the challenges you highlighted?
What are your thoughts on competitive dynamics? Which players do you believe are best- or worse- positioned given the winning characteristics you outlined?
What are your expectations for changes, shifts or additional closures in the department store footprint across the mall landscape?
Do you expect any significant changes to operators’ format approaches?
Anecdotally, I’ve come across Nordstrom’s experiments with smaller, Main Street locations where it’s a tailor but it also serves as a BOPIS [buy online, pick up in store] location or distribution point. What are your thoughts on this format?
What metrics would deem the smaller, BOPIS locations successful? What would an operator such as Nordstrom want?
How could department store operators tackle supply chain challenges ahead of the upcoming holiday season? Which parts of the value chain may be most compromised?
How could brands such as Nike potentially prioritising the D2C channel impact their longer-term wholesale relationships with department stores?
Could you elaborate on the private label move by department stores? How could players address supply chain shortfalls here?
What’s your risk assessment of department stores potentially missing or failing to satisfy demand in Q4?
You mentioned Ugg boots as one item that may have supply shortfalls. How could the consumer respond to department stores potentially having to lean more into private label? Could they buy the Ugg boots wannabe if they can’t find the authentic product anywhere, or could this demand shift?
What shifts could happen in supply chain management post-pandemic? Could technology be leveraged more? Will inventory need to be procured earlier in the year?
How do inventory levels have to trend at mid-year and three-quarters through to survive a Q4 or holiday season?
How are operators navigating the tight labour environment? Could you elaborate on the impact on customer experience?
What risk could the seasonal labour force pose to operators? Could this be tough to navigate?
How are staff managed in a typical year ahead of the holiday season? Could the process change significantly this year? Would that mean hiring more full-time labour now vs leaning so much on seasonal hires?
Might operators need to reduce operating hours if open rates remain elevated at 30-50% and they’re not able to adequately staff stores?
How could e-commerce play into or relieve any supply chain or staffing challenges for department stores?
Have any players found a happy medium between executing on e-commerce and catering to their core bricks-and-mortar strategies?
What’s your outlook on Black Friday? What do you expect from stores, baking in any assumptions around demand spikes vs 2019 and considering the risks here?
What are your promotional activity expectations for Q4? You touched on operators encouraging consumers to shop much earlier than prior years.
How do you assess department stores’ abilities to compete with off-price? What’s the risk here for both or either side? Could the department stores leaning less on promotions mean more risk for off-price channels in Q4, or do potentially leaner inventories and shortages imply more business for off-price, a risk to department stores?
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