Report: Department Stores Losing Their Edge With Luxury Shoppers
Stevens, Pa., Although Federated Department Stores continues to transition the May Department Store chain into the Macy's brand, shoppers are turning away from traditional department stores in droves, according to the Luxury Report 2006 from Unity Marketing. Total retail sales in traditional department stores have dropped 13% in the last five years, from $96.3 billion in 2000 to $84.1 billion in 2005. Wal-Mart and other discount stores have siphoned off sales from lower-income customers, while the luxury shoppers, long the most loyal customers of department stores, are turning to other shopping destinations.
The report also revealed that Bloomingdale's and Neiman Marcus ranked as luxury shoppers' favorite department stores. Macy’s ranked as the No. 1 department store shopping destination, used by the largest percentage of luxury shoppers in 2005 (23%), followed by Nordstrom with 18% of luxury shoppers, then Dillard’s with 12%. Bloomingdale’s and Neiman Marcus, however, ranked 49% more popular than the average department store for luxury shoppers, and Nordstrom as 40% more popular. Even though the largest percentage of luxury consumers shopped at Macy’s, the retailer also has the largest number of stores nationwide.