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US department stores launch counter-attack

As consumers demand better value and a more interesting and stimulating experience while shopping, department stores face a clear choice: adapt or die.

"My concern is that they will become retail museums," says Britt Breemer, chairman of America's Research Group. "The bottom line is that they have to admit they are in trouble and figure out some way to reinvent themselves."

This may help to explain why four times as many households visit discount stores as department stores.
Department stores face mounting competition from speciality retailers and discounters, such as Wal-Mart and Target. Their steady loss of market share may be partly because the concept was born in a different era, a time when, for families, a trip to the store combined shopping with entertainment.

What is needed, say retail experts, is a new approach. A typical example of this approach working is seen at Selfridges. This UK group has recast itself from a "sleepy 1970's-style department store" into a retailing experience fit for the 21st century.

One of the main changes is that more space is rented to vendors, in what is sometimes referred to as the showcase business model: vendors design their own booths and are encouraged to be creative.

The Selfridges model is about creating an experience that is "new, interesting and different" where it is not just the product that is different. The problem with US department stores is that they all look the same.

Arnold Aronson, a management consultant, believes Selfridges could be a prototype for failing US department stores: "It has brought back excitement and novelty and is really seducing customers by developing the right merchandise, in the right quantities, at the right time."

Federated, which owns Macy's and Bloomingdale's, appears to be moving in the right direction. Forty-two stores are being upgraded with the latest components of its "reinvent" strategy, including enhanced fitting rooms, convenient price-check devices, comfortable lounge areas, computer kiosks and shopping carts.

The challenge department stores face is how to develop in a sector that is, essentially, not growing. But if they adapt, many industry observers believe they will survive. "The department store is not dead, it will live on," said Robert Tamilla, Professor of Marketing at the University of Qebec. "But it will not be the same animal it was before."

II. Ответьте на вопросы по тексту:

1. What department store is a typical example of new approach?

2. What challenge do department stores face?

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