architecture and design - Lifestyle Strategy and Design

PNC Harbor East, Baltimore, Maryland. Photo credit: Gensler

Over the past year Kathleen Jordan, a principal in Gensler’s New York office and leader in the firm’s Retail practice, undertook an investigation into the future of the department store. Her premise was simple: for years she’s been hearing and reading about the upcoming death of the department store, but so far it hasn’t happened. To learn more, she spoke with industry leaders, visited successful examples around the world, and read a lot of articles. The result is a set of distinct advantages she sees for department stores in today’s business and retail climate, and a set of bold strategies to regain the competitive advantages these stores once held. This is the fifth post in a six part blog series that conveys her findings.

Photo credit: Part of JCPenney's email outreach program

Customers want to shop from retailers whose cultures they respect. They want retailers to share their values and provide positive contributions to the communities within which they are located. When it comes to sustainability, this sentiment appears to be even stronger in the BRIC countries and developing nations, where even cash-strapped consumers are making decisions based on what they think a company stands for.

Local vendor floor at Takashimaya, Tokyo. Photo credit: Kathleen Jordan

I visited the Takashimaya store in Nihonbashi, Tokyo, and stumbled upon an entire floor set aside for local craftspeople to make and sell their wares. As a tourist, I really appreciated the opportunity to discover truly authentic local products, meet with the actual artisan, and experience the local culture first hand. On the flip side, Holt Renfrew of Canada has a dedicated area called The Room, where it features emerging designers on a rotational basis of three to four months to provide them with premier local market exposure and a support for commercial success.

Don’t just gift, partner

Giving money isn’t enough. Successful retailers are exploring avenues of involvement that are meaningful and that will genuinely embed them into local communities. In South Africa, Woolworths is investing in farming initiatives for rural schools. The students live at these schools because home may be hundreds of miles away. The Woolworths mission is to make these schools into sustainable self-sufficient communities, and the company calls this “the good business journey.”

Gensler's 2011 We Care Event. Photo credit: Gensler

Cultural contributions

In many areas outside major urban centers, department stores and malls are the main attraction of activity. Stores can use their size, underperforming spaces, and marketing budgets to deliver experiences to people that otherwise would have a hard time finding them without traveling long distances. This might mean family day activities, educational or instructional lectures, rotating art exhibits, live performing arts shows, fashion shows, or their own local version of “America’s Got Talent.” Department stores have the power not only to just curate their merchandise, but to the create events and experiences around that product which mold the entire guest experience 360 degrees. Use the opportunity to deliver something meaningful, and to create a destination worth visiting again and again. We’ve witnessed an ever-growing exchange of luxury retailers cross-pollinating with large cities to showcase various artistic exhibitions: the Dior exhibition at the Pushkin in Moscow, Ralph Lauren’s car collection exhibit in Paris, and Louis Vuitton’s sponsorship of the Yayoi Kusama exhibit in NY to name a few. Others have gone to greater extremes, as with the Chanel traveling museum by Zaha Hadid and the Prada museum by Rem Koolhaus in China. But here again, all of these events were centered in major cities, where access to major cultural institutions is prolific. How to provide this much needed exposure to culture in areas not as fortunate?

A native to the New York City area, I vividly remember when Macy’s, faced with the struggle to emerge from bankruptcy, merged with Federated in 1994. I was paralyzed with fear that this would bring to an end the Annual Macy’s Thanksgiving Day Parade (started in 1924), or the Annual Fourth of July Fireworks display (started in 1976). Myself, along with the current population of the Tri-State area, as well as the tons of visitors who planned to make the pilgrimage to NYC to see one of these two major holiday events (both are totally bucket list worthy), let out a collective sigh of relief that these would remain. I have to say this personal experience (and my inclusion within the Macy’s brand community) granted me an emotional connection with the city of Chicago, who protested (as they always do) the conversion of Marshall Field’s to Macy’s, as Macy’s became a national store. While I have immense respect for Terry Lundgren, I think this was something he should have acquiesced on – especially in that town. I believe this was an extreme example that deference to the local community, and the grand gesture, should be weighed above commercial business drivers when warranted. I think in this case it was DEFINITELY warranted. At least he kept the Frango Mints.

Goodwill Pop-Up Store in Washington, D.C. Photo credit: Gensler

Environmental Contributions

Sustainability has become a buzz word, but investments in initiatives that truly make a difference in lessening a company’s negative environmental impact can make a lasting impression with customers. WalMart continues to work with its suppliers to reduce the amount of packaging used on products it sells. Levis has developed “waterless jeans” that cut down dramatically on the amount of water pollution created as a result of the process of making their core product offering.

These are true environmental contributions that speak to the company culture and brand values, which are becoming increasingly important to customers. As they say actions speak louder than words. A group called The Sustainable Apparel Coalition has developed and released a new three-part scoring system, called the Higg Index, that is intended to help apparel and footwear manufacturers definitively measure the ecological impacts in a quantifiable manner. It's based on the Outdoor Industry's 'Eco Index' and Nike's 'Material Assessment tool' and addresses the tough question of how to put metrics to the actions company’s take. The index has three parts geared to effect different aspects of the industry's impact on the environment based on their particular role in the process:

Brand Module: product design, material life cycle, and transportation requirements
Product Module: sustainability of materials, material waste, finishing processes
Facilities Module: factory waste removal and energy consumption

Retailers such as Nordstrom, JC Penney, Gap, and H&M are part of the group's member base as they each seek to find their own way to walk lightly on this earth. Note to small retailers: It's downloadable for free from the group’s website (apparelcoalition.org).

What If?

Once you’ve reorganized your sales area and actualized extra space through the utilization of technology-enhanced efficiencies in stocking and interactive product displays, this surplus area was given over to the community in the form of event or gathering space? Giving over space directly to the local market is an invitation to become a part of your store, and further, to become a part of your brand community. In summary, demonstrate your local investment, and you will driving traffic to your store while externally promoting a culture of social responsibility.

Kathleen Jordan is a principal in Gensler’s New York office, and a leader of our retail practice with over 24 years of experience across the United States and internationally. Kathleen has led a broad range of retail design projects as both an outside consultant and as an in-house designer. She has led projects from merchandising and design development all the way through construction documentation and administration, and many of her projects have earned national and international design awards. Contact her at kathleen_jordan@gensler.com.