Department Stores Aim to Attract Gen Z and Millennials

Macy’s, Kohl’s, Nordstrom and other department stores are reportedly facing a pressing challenge in attracting younger customers.

The rise of social media, specialty retailers, big-box stores and online platforms has led younger consumers like millennials and Generation Z to explore alternatives to traditional department stores, CNBC reported Monday (May 20).

To address the issue, these retailers have announced plans to appeal to younger shoppers, according to the report. However, they are also grappling with weak sales growth projections for the fiscal year.

Oliver Chen, a retail analyst at TD Cowen, said department stores must cater to both younger and older customers, per the report. These retailers have already lost ground in attracting younger shoppers, making it urgent for them to adapt their strategies to remain competitive.

Wall Street is closely monitoring the progress of these retailers in attracting younger consumers, the report said.

Nordstrom is the only one of the three with a base of millennial and Generation X shoppers that is larger than its base of baby boomer shoppers, according to the report.

To reverse this trend, all three retailers have announced plans to attract new customers, particularly younger ones, the report said.

Kohl’s is focusing on adding trendier clothing for teens, opening more Sephora shops and expanding its baby department, per the report. The retailer aims to tap into life stages that often drive purchases, such as decorating an apartment for the first time or having a baby. Kohl’s also plans to add Babies R Us store-in-stores to about 200 of its locations in the fall.

Macy’s, under new CEO Tony Spring, is planning to refresh its namesake brand and close underperforming stores, according to the report. The company is also opening smaller off-mall Macy’s stores in suburban strip malls and expanding its presence in the beauty aisles. Macy’s aims to make its stores more attractive by introducing new, exclusive clothing brands and enhancing customer experiences.

Nordstrom has signed deals with popular brands and direct-to-consumer names and launched a third-party marketplace to expand its online offerings. Nordstrom aims to double or triple the number of items sold through its website and app.