This report provides comprehensive and current information and analysis of the US department stores market including department stores market size, anticipated market forecast, relevant market segmentation, and trends for the department store industry in the US.

Current market landscape

Department stores have a bit of an uphill road to climb as they seek to build relationships with consumers, particularly younger individuals. Interestingly, though, 43% of consumers shop department stores for no particular reason or specific occasion, indicating that consumers are driven by sales or other events to seek out these retailers.

COVID-19 wreaked havoc on department stores who were already struggling before the pandemic. The forced closure of nonessential stores meant consumers turned to online shopping to fulfill their needs; department stores pivoted to focus on their omnichannel presence to meet consumers where they were shopping. Moving forward, a streamlined omnichannel approach will be critical in serving shoppers the experience they expect as they move seamlessly between online and in-store shopping.

Future trends in US department store market research

One of the biggest threats to department stores is their relevancy in the lives of younger consumers. Gen Z and Millennials aren’t seeking out department stores the way older generations have, with retailers such as mass merchandisers and DTC brands winning more of their dollars. This means department stores need to rethink their product offerings, in-store and online experience and the added value they can bring to younger shoppers to give them a reason to shop department stores.

One of the biggest opportunities in the market for department stores is to position themselves as a destination for shoppers: a place for more than just purchasing items. In-store and through their digital channels, department stores can offer experiences ranging from expert panels to sports clinics/fitness seminars to design classes. Department stores have ample opportunity to create events and experiences around their wide range of products, offering an experience for each of their customers.

Read on to discover more about the US Department Stores consumer market, read our US In-Store Experiential Retailing 2021 report, or take a look at our other Retail research reports.

Quickly understand

  • The impact of COVID-19 on consumer behavior and the department store market.
  • The variety of items consumers are purchasing at department stores.
  • Occasions and motivations for shopping department stores.
  • Barriers to shopping department stores.

Covered in this US department stores report

Brands include: Sephora, Glossier, Allbirds, Levi’s, Reformation, Disney, T-Mobile.

Department stores covered in this report: Barneys New York, Bergdorf Goodman, Bloomingdale’s, Carson Pirie Scott, Dillard’s, JCPenney, Kohl’s, Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom, Saks Fifth Avenue and Sears, Roebuck and Co., Target.

Expert analysis from a specialist in the field

This report, written by Katie Hansen, a leading analyst in the Retail & eCommerce Analyst sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Department stores are at a critical crossroad as they look to reverse their downward trend from the last several years. The pandemic, which wreaked havoc on department stores and much of retail, has given department stores a chance to rethink the shopping experience they provide and accelerate plans for digital improvements. Moving forward, department stores need to focus in on the experiences they offer consumers, their partnerships with other brands and positioning their stores to be a destination where consumers want to spend their time.

Katie Hansen, Retail & eCommerce Analyst
Katie Hansen
Retail & eCommerce Analyst

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
            • Economic and other assumptions
              • COVID-19: US context
              • Executive Summary

                  • Top takeaways
                    • Market overview
                      • Figure 1: Total US sales and fan chart forecast of department stores, at current prices, 2016-26
                    • Impact of COVID-19 on retail and department stores
                      • Figure 2: Short-, medium- and long-term impact of COVID-19 on retail and department stores, 2021
                    • Opportunities and challenges
                      • Create an environment for consumers to enjoy
                        • Younger consumers aren’t building relationships with department stores
                          • Department stores need to focus on value to combat rising prices
                          • The Market – Key Takeaways

                            • Department stores face a rocky road ahead
                              • Inflation deflates consumer’s purchase power
                                • Retailers can lean into environmental efforts
                                • Market Size and Forecast

                                  • Department stores show sign of recovery; still face challenges ahead
                                    • Figure 3: Total US sales and fan chart forecast of department stores, at current prices, 2016-26
                                    • Figure 4: Total US sales and forecast of department stores, at current prices, 2016-26
                                  • Impact of COVID-19 on department stores
                                  • Market Factors

                                    • Rocky economic recovery, surging inflation complicate consumer’s shopping journey
                                      • Figure 5: Consumer confidence and unemployment, 2000-21
                                      • Figure 6: Consumer Price Index change from previous year, 2020-21
                                    • Convenience and experiences drive younger generations’ shopping behavior
                                      • Department stores need to invest in technology to stay relevant
                                        • Sustainability, environmental focus will resonate with shoppers
                                        • Companies and Brands – Key Takeaways

                                          • Kohl’s, JCPenney lean into beauty
                                            • Experiences will make department stores a destination to explore
                                              • Brand partnerships can enhance shoppers’ journey
                                              • Competitive Strategies

                                                • Kohl’s looks to new partnerships to attract younger consumers
                                                  • Figure 7: Kohl’s and Sephora partnership
                                                • JCPenney leans into diversity on the beauty counter
                                                  • Figure 8: JCPenney new beauty concept
                                                • Macy’s focuses on digital, new formats for growth
                                                  • Figure 9: Market by Macy’s hosts Christmas Bazaar with small businesses
                                                • Nordstrom crafts their store around the consumer experience
                                                  • Figure 10: Pop-In@Nordstrom holiday edition
                                              • Market Opportunities

                                                • Offer experiences to make department stores more destination shopping
                                                  • Partner with brands to align with consumer preferences
                                                    • New ways to provide value open up customer engagement opportunities
                                                    • The Consumer – Key Takeaways

                                                      • Consumers seek department stores for their wide variety of items
                                                        • Occasions are a driving factor to shop department stores
                                                          • Stores can be a place for fun and function
                                                            • Consumers need standalone locations
                                                              • A focus on personal services will attract consumers
                                                              • Stores and Items Shopped

                                                                • Mall anchors, legacy brands attract shoppers
                                                                  • Figure 11: Dillard’s exclusive look at winter 2021 style
                                                                  • Figure 12: Department stores shopped, 2021
                                                                • It’s all about the experience for younger generations
                                                                  • Figure 13: Nordstrom partners with Goodfair to bring sustainability to stores
                                                                  • Figure 14: Department stores shopped, by generation, 2021
                                                                • Department stores can show they have it all
                                                                  • Figure 15: Items purchased at department stores, by gender, 2021
                                                                  • Figure 16: Items purchased at department stores, by parental status, 2021
                                                              • Occasions for Shopping Department Stores

                                                                • Consumers shop department stores for many occasions, including no reason at all
                                                                    • Figure 17: Dillard’s offers inspiration through Instagram Stories
                                                                    • Figure 18: Occasions for shopping department stores, 2021
                                                                  • Reaching parents with their Millennial expectations
                                                                      • Figure 19: Occasions for shopping department stores, by parental status, 2021
                                                                    • Use occasions, experiences and financial assistance to drive younger consumers to shop
                                                                      • Figure 20: Occasions for shopping department stores, by generation, 2021
                                                                  • Reasons and Motivations to Shop Department Stores

                                                                    • Go beyond wide selection to entice consumers to shop
                                                                      • Provide options without overwhelming the senses
                                                                        • Figure 21: Reasons to shop department stores – The store experience, 2021
                                                                      • Loyalty programs, private label items can encourage consumers to shop
                                                                        • Figure 22: Reasons to shop department stores – Loyalty programs and private label items, by gender, 2021
                                                                      • Partnerships with brands, emphasizing experiences can extend consumer reach
                                                                        • Figure 23: Reasons to shop department stores – Brand partnerships, by gender, 2021
                                                                      • Younger consumers need a firm and fun reason to shop department stores
                                                                        • Figure 24: Reasons to shop department stores, by generation, 2021
                                                                      • Use the physical store for fun and functional activities
                                                                        • Figure 25: Pop-In@Nordstrom provides fun, unique items for purchase
                                                                        • Figure 26: Motivations to visit department stores, 2021
                                                                      • New shopping methods will pique younger consumers’ interests
                                                                          • Figure 27: Motivations to visit department stores, by generation, 2021
                                                                      • Barriers to Shopping Department Stores

                                                                        • Location, location, location
                                                                          • Figure 28: Barriers to shopping department stores, 2021
                                                                        • Outdated experience keeps younger consumers at bay
                                                                          • Figure 29: Barriers to shopping department stores, by age, 2021
                                                                      • Department Store Attributes

                                                                        • A focus on more personable experiences will give department stores a boost
                                                                            • Figure 30: Attributes associated with department stores, 2021
                                                                            • Figure 31: Correspondence Analysis – Symmetrical map – Perceptions of store brands, 2021
                                                                          • Target, Kohl’s, Macy’s and Nordstrom are doing well with Gen Z, Millennials
                                                                            • Figure 32: Target shows off fun finds on social media
                                                                            • Figure 33: Attributes associated with department stores, by generation, 2021
                                                                        • Attitudes toward Department Stores

                                                                          • Give consumers a reason to shop outside of sales
                                                                              • Figure 34: Macy’s livestreaming events
                                                                              • Figure 35: Attitudes toward department stores, 2021
                                                                            • Younger consumers are changing to shopping experience, expect department stores to keep up
                                                                              • Figure 36: Macy’s holiday giving initiative with Make a Wish
                                                                              • Figure 37: Attitudes toward department stores, by generation, 2021
                                                                            • Offering women tailored, engaging sales opportunities
                                                                              • Figure 38: Attitudes toward department stores, by gender, 2021
                                                                          • Appendix – Data Sources and Abbreviations

                                                                            • Data sources
                                                                              • Forecast
                                                                                • Consumer survey data
                                                                                  • Abbreviations and terms
                                                                                    • Abbreviations
                                                                                      • Terms
                                                                                      • Appendix – The Market

                                                                                          • Figure 39: Mintel’s estimate of the department store market, historical vs no pandemic estimates, 2021
                                                                                          • Figure 40: Total US sales and forecast of department stores, at inflation-adjusted prices, 2016-26
                                                                                      • Appendix – The Consumer

                                                                                          • Figure 41: Reasons to shop department stores, by department store shopped, 2021
                                                                                          • Figure 42: Barriers to shopping department stores, by parental status, 2021

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