American Department Stores Down, eCommerce Up

The American department store is suffering, and it’s no surprise that there’s a correlation with how well malls in the country are doing as well. As shopping shifts more and more to online, shopping centers and malls have been disappearing from the landscape, along with big classic department stores, like Sears, Macy’s and Lord & Taylor.

How poorly these department stores are doing shows up blazingly in a new eMarketer report, “Department Stores and Digital Commerce 2016: Trends and Benchmarks.” EMarketer’s report looks at the top nine department store brands ranked by eCommerce’s share of total revenues between Jan. 2015 and Jan. 2016. On the high end, the list ranges from Neiman Marcus at 28.1 percent to Bon-Ton at 6.9 percent. Somewhere in the middle, Macy’s leveled with 15.2 percent.

Looking back a just decade gives glaring insight into the steep angled decline. According to U.S. Department of Commerce figures, U.S department store sales sat at $87.46 billion in 2005. Just last year, that number was down almost a third to $60.65 billion. While the shift to eCommence is clearly at play here, other shopping habits of frequenting off-price and specialty stores — such as T.J.Maxx, Victoria’s Secret, J.Crew, Brooks Brothers — have pulled shoppers away from shopping for everything in a “one-stop-shop” manner.

Of course, higher-end and luxury retailers tend to do better than the lower end due to their consumers being more interested and likely to digitally purchase items. Either way, the eMarketer report echoes a March 2016 analysis by Credit Suisse, which noticed that department store eCommerce was 14 percent of total revenues, double what it was just four years ago.

ECommerce-wise, Lord & Taylor saw the biggest increase of all department stores at almost 43 percent, and Sears lost out to its decline of 1.5 percent over last year. Macy’s took home the gold in overall commerce at $4.11 billion in terms of sales, despite Neiman Marcus, Nordstrom and Saks Fifth Avenue having the largest proportion of digital sales.

Stealing from these big department stores’ commerce presence is, of course, other online retailers, like Amazon, which took nearly 35 percent of the share of the eCommerce sales space.


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