The retail experience, reimagined ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

DELIVERING ACTIONABLE INSIGHTS ON THE DAY’S NEWS Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms Welcome to the latest edition of Only McKinsey Perspectives. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com. —Alex and Axel The future of department stores In the news • In-store innovations. One French retailer’s flagship store in New York City is a world away from the conventional American department store concept, The Wall Street Journal reports. The new store, which opened earlier this year, resembles a Parisian apartment and is far smaller than its typical US counterparts. It also features multiple restaurants, an espresso cafe, and even a champagne bar. With annual US department store sales dropping by almost 70% between 1999 and 2023, the retailer’s diversified offerings, which are more common among European department stores, may work to its advantage. [WSJ] • Expectations rebound. With the significant shifts in consumer behaviors since the COVID-19 pandemic, the department store sector has yet to regain momentum, Axios highlights. Yet a few prominent US retailers have recently seen signs of growth. One business recently announced its biggest sales growth in several quarters, while another company’s shares have risen nearly 40% following a stronger-than-expected earnings report and an updated sales forecast. At the same time, both companies have closed several stores—or plan to—while some other chains have filed for bankruptcy. [Axios] “Boring department stores are probably dead—but inspiring department stores have a bright future.” —Olivier Bron, CEO, Bloomingdale’s On McKinsey.com • Parameters of success. For the past few years, department stores in the US have seen their revenues decline. At a time when the retail market is crowded, how can these businesses bring shoppers back to their doorsteps? The answer may lie in the US market’s generally short-term mindset, says Olivier Bron, CEO of Bloomingdale’s, in an interview with McKinsey Partner Joëlle Grunberg. For Bron, one way to address this—and reorient the business around the in-store experience—is reevaluating the metrics that determine success. For example, lifetime value, customer satisfaction, cross-shop experience, and time spent in the store, rather than a specific brand’s sales or margin. • Invest in the future. Relatedly, long-term investments are a priority for Bron, both in terms of capital expenditures (such as store renovations and digital experience) and operating expenditures (such as developing frontline managers and associates). When it comes to enhancing the company’s digital capabilities, bringing the right data to the right person at the right time is key. Learn how department stores can increase foot traffic and elevate shoppers’ experiences. Redefine department stores —Edited by Ramya DRozario, editor, Gurugram Was this forwarded to you? Sign up here. Or send us feedback—we’d love to hear from you. Follow our thinking McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android. Copyright © 2025 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007