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Will department stores go extinct?

Despite dropping numbers for physical retail, luxury department stores are still going strong.

With the incessant talk of plummeting foot traffic at retail stores everywhere from San Francisco to Singapore, it might seem inevitable that brick-and-mortar stalwarts such as the department store will soon go the way of the dodo. Not so fast. A new report commissioned by London-based firm Sybarite Architects and produced in partnership with UK-headquartered analyst Globaldata looks at the top 10 luxury department stores around the world and uses its findings as a stepping stone to delve into luxury retail today. If consumer expenditure per square foot is any indication, luxury consumers – surely one of the most demanding of buyers – are still flocking to retailers both old (such as Harrods in London) and new (SKP in China). Here’s a look at what gets luxury shoppers – at high-end department stores, and beyond – excited, and away from their gadgets.

(RELATED: Why malls and brick-and-mortar stores may beat online shopping)

 

Top 10 Luxury Department Stores

(Based on estimated sales per square foot)

top 10 luxury departments around the world

 

What’s driving luxury today

Modernising Heritage

Forty-eight per cent of Chinese millennials feel proud of the “Made in China” label. Consumers appreciate brands that explore their individual cultures in meaningful ways.

F&B Experiences

Integrated “independent, Instagram-worthy food venues” can help to draw crowds. London store Liberty’s restaurant Arthur’s honours its art-and-craft heritage.

Sustainability

Fashion search engine Lyst has seen a 66 per cent increase in searches for sustainable fashion. More consumers are voting with their dollars for brands with a purpose.

Brands as Educators

Brands can no longer just create products to sell. The Alexander McQueen store on Old Bond Street in London includes a space for fashion education.

Virtual Exclusivity

Luxury has long been associated with exclusivity. But today, it’s not about “cold, hard cash”, but about the “knowledge and access” required to obtain a coveted item.

(RELATED: How retail brands are utilising technology to lure shoppers back to brick and mortar malls)

Cultural Collaborations

In a globalised world, retailers must distinguish themselves by creating bespoke experiences in different locations. New York development Hudson Yards features plenty of integrated public space and new cultural landmarks.

 

How much people spend on luxury:

Total luxury spend as proportion of total retail spend

total luxury spend

 

Human Touch

74% Consumers who would be more loyal to a business that allows them to talk to a fellow human being, rather than a business that relies solely on digital channels.

(RELATED: Smart shopping: How brick-and-mortar retail is changing)

Photo by Marcin Kempa on Unsplash