Department-Store Chains Losing Customers to Savviest E-Commerce Merchants

Think back to the last time you made a purchase in a department store—it was probably chaotic and you had to try hard to find exactly what you were looking for. Additionally, you likely looked your purchase up online before even going into the store, as 81 percent of buyers do. Now, think back to your last online purchase—it was probably easy and took you under a quarter of the time from start to finish than going into a department store. Now, if you had to repeat the process again, which option would you favour over the other? It’s an easy choice, right?

Download the whitepaper "How the lines between ecommerce and brick and mortar  are beginning to blur" to learn about the state of the omnichannel experience.

In light of Sears Canada’s massive $406.7 million dollar loss over the past three years, it’s evident that the retail industry is changing dramatically. The Canadian company has essentially put itself on the market with a stock that is down 99 percent from its highest peak. While the company is looking to sell, there is expected to be little buyer interest.

Why? Sears has failed to adapt to the current needs of consumers. Instead of conventional department stores, more consumers are looking to e-commerce merchants to meet all their purchasing needs from the convenience of their own homes.

A Changing Landscape

Consumer behavior is changing, as e-commerce merchants are currently dominating the retail sales market. So why are only 28 percent of businesses selling their products online? Companies that do not have an e-commerce store are missing out on 60 percent of the population that is excited by the notion of not having to go into a crowded store to purchase products. People are more inclined to purchase online, not just because of ease, but also because 71 percent believe they receive better deals when purchasing online compared to in store.

What Have Department Stores Done Wrong

The biggest problem that department stores face is their inability to adapt to the new, digital landscape. Their unwillingness to abandon conventional business models has seriously hindered their ability to thrive in today’s market.

Department stores that have tried to tackle the digital age have often wound up less than successful. Whether by faulty websites or technological glitches, the process has been a chaotic mess that has left consumers less than pleased.

With brand loyalty accounting for less than convenience and ease, E-commerce merchants like have taken over the one-stop-shop market in a way that department stores never could. By offering a variety of comparable products from various brands, the company follows the same concept as many department stores, but instead offers their services on the most customer-friendly platform on the market.

What Department Stores Need to Do

All hope is not lost for department stores—they just have to be willing and able to adapt to consumer trends. Department stores need to be able to highlight and emphasize what consumers can get out of purchasing products from them instead of from an e-commerce merchant.

Some products that customers do not like to buy online are complicated, unfamiliar products. This could be an appliance, or some form of electronic that requires some expertise. In this case, customers like to venture into stores to gain the industry insight that employees can provide that will add benefit to their shopping experience. The effort exerted in online versus in-store shopping must justify the end result.

Additionally, department stores can also include online versions of their stores, to meet the needs of all customers. The only way this will be effective is if the website and shopping experience provides the customer with value, with safe and trustworthy payment processing at the end.

The old saying, “If you can’t beat them, join them,” rings especially true when discussing how department stores must adjust their business models if they want to thrive in the current digital landscape.


Text Size

James Newman

James brings over 30 years of experience in the telecommunications and merchant services industry to his role as Client Relations Specialist for BNA Smart Payment Systems. With a focus on sales, marketing and client services, the last 10 years have been spent with BNA. He has completed over 2,000 hours of professional business training, including professional sales, solution selling, conflict resolution, appraisal workshop, strategic marketing, and financial analysis. Outside of work, James is almost constantly reading fiction. In direct contradiction to this rather silent interest, he took up the guitar six years ago and regularly, happily, and shamelessly destroys the peace and quiet of his family home.

Subscribe to our blog