The introduction of a concept offering usually is associated with the automotive or fashion industries; manufacturers let their designers go wild and come up with the most innovative ideas possible. Even if the cutting-edge designs never make it to the mass market, they can get people excited about the ideas and possibly inform some less radical innovations that will appeal to a broader audience. For retailers, faced with a challenging market environment, concept introductions are taking on new importance, as a means to experiment with seemingly radical ideas, to learn which ones evoke the most response, as well as which ones hold promise for wider introductions.
Consider, for example, Nordstrom Local, a showrooming experiment by the luxury retailer; the multiple versions of pop-up stores being tested throughout the nation by Macy’s; or Barney’s New York, with its recent introduction of a storefront that stocks only products made from cannabis, called The High End. Reviewing these concept introductions, a panel of retail experts offered their opinions on what would work—and what would not. Their comments largely can be summarized in three main themes.
First, change is inevitable and massive. According to Charles Dimov, a Vice President of Marketing at OrderDynamics, because the retail sector is constantly subject to change, “Continually adapting, learning and improving is the only way to stay relevant in retail.” Similarly, the President of the Global Collaborations consultancy Camille Schuster asserts that “Being nimble, experimenting, and constantly changing are requirements for today’s marketplace. There is no one formula for success. There is no formula that will work for a long time. With experimentation that occurs often and quickly, retailers can identify changing consumer trends, different geographic preferences, technology use, and respond accordingly.”
Second, department stores themselves need to take a different tact if they hope to survive. The author Mark Ryski believes they will have no choice but to get smaller, reduce their number, and become more specialized. Neil Saunders, a managing director at Global Data, instead proposes that department stores should do more things: add more services, develop exclusive brands, invest more in stores, and adopt a flexible approach to store design so that they can maintain both conventional and unconventional formats, as required. With a more general recommendation, Lee Peterson of WD Partners calls for a “complete re-think” of what department stores are and what they should be.
Third, companies might want to shift focus altogether, because “the department store has no key place in customer lives,” according to the President of Protonik Doug Garnett. He notes that consumers show their preference for alternative formats: discount retailers such as Costco or specialty retailers like Old Navy. Min-Jee Hwang, the Director of Marketing at Wiser Solutions, asserts that “multi-channel, app-centric shopping” is the way to go; in contrast, Georgianne Bender, of Kizer & Bender, cautions that “an app is not a store window.” In her view, the key demand for department stores is to develop a viable, strategic plan to change how shoppers experience their visits to stores.
Thus even among the experts, we find both consensus and disagreement. The best way forward for department stores remains somewhat unclear. In this sense, the concept of concept stores appears promising, as a way to test out various options to identify what will truly work best.

Discussion Questions:

1. What are department stores doing to revitalize their business?
2. What do the “experts” think about these strategies?

Source: Caroline Jansen, Retail Dive, March 27, 2019