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Insight of the Day: How Macy’s, Kohl’s and Nordstrom are chasing Millennial, Gen Z shoppers

Department Stores Face Challenges Attracting Younger Shoppers

Department stores such as Macy's, Kohl's, and Nordstrom are struggling to attract younger shoppers like millennials and Gen Z. Their core customer base is aging, and younger consumers are turning to social media, specialty retailers, big-box stores, and online platforms for their shopping needs.

Here's a breakdown of the challenges and strategies:


  • Aging customer base: A significant portion of department store customers are baby boomers.

  • Weak sales growth: The department stores have shared weak outlooks for the fiscal year, expecting little to no sales growth.

  • Changing consumer preferences: Younger consumers are less loyal to brands and seek out trendy, affordable options from various retailers.

  • Foot traffic and sales decline: Inflation and economic pressures have led to a decrease in discretionary spending on clothing and other non-essential items.


  • Kohl's:

  • Adding trendier clothing for teens.

  • Opening more Sephora shops inside stores.

  • Expanding baby departments.

  • Carrying more home goods.

  • Macy's:

  • Closing underperforming stores.

  • Opening smaller, off-mall Macy's stores in suburban areas.

  • Opening more Bloomingdale's and Bluemercury locations.

  • Introducing new, exclusive clothing brands.

  • Enhancing in-store experiences with play areas and cocktail bars.

  • Nordstrom:

  • Partnering with popular direct-to-consumer brands.

  • Launching a third-party marketplace to offer a wider variety of items online.

  • Focusing on its off-price Nordstrom Rack stores, which appeal to younger shoppers with lower prices.


Despite these efforts, the department stores' forecasts remain muted, with little to no expected growth. The challenge of attracting and retaining younger customers remains a significant hurdle for these retailers.

Additional Insights:

  • Nordstrom has been more successful than its rivals in attracting younger shoppers due to its focus on trendy brands, off-price stores, and a third-party marketplace.

  • The use of third-party marketplaces is becoming a trend among department stores as they strive to offer a wider variety of items without the risk of owning inventory.

  • Department stores need to break away from old habits and offer more unique and exciting merchandise to appeal to younger generations.

Key Quote:

"When you’re a department store, you need to — and you should — be catering to younger and older," said Oliver Chen, a retail analyst at TD Cowen.
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