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Survey: Department store leaders eye store expansion in 2025

Zach Russell headshot
Nordstrom Rack
Off-price is a growing channel for department retailers.

Despite the recent spate of store closings, a majority of department store leaders are looking to expand their physical store presence in the new year.

That’s according to a new survey from B2B wholesale platform NuOrder by Lightspeed, which revealed that more than six-in-10 (62%) of high-level retail directors said they plan to open new storefronts in the next 12 months. Forty percent said they planned to expand online marketplace operations, highlighting a growing omnichannel approach among retailers.

The expansion expectations comes as some major department stores are reducing their store count. Kohl’s recently said it plans to close 27 underperforming stores and an e-commerce fulfillment center by April 2025, while Macy’s plans to close 66 locations spread across 22 states as part of its previously announced plan to close 150 namesake stores.  However, experts say national chains are shifting towards more convenient and more-curated physical spaces.

“It’s a very interesting time, as there seems to be a shift back to physical stores,” said Ashely Collins, retail client director at NuOrder by Lightspeed. “We see our clients, like Nordstrom and Bloomingdale’s, opening locations to make it even easier for their customers to shop with them locally. For example, Bloomingdale’s is opening smaller concept stores called Bloomie’s, and Nordstrom is opening more Rack locations. Hyper-curated stores will continue to be the strategy for some time to come.”

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When asked what consumer trends would shape their business strategy in the next 12 months, convenience is top-of-mind, as 33% of leaders said they would aim to improve operations including easier returns, faster delivery, product availability and more. More than a quarter (27%) of respondents said they will aim to make the shopping experience more personalized, while 20% said they will utilize AI and other technologies more in the next year.

[READ MORE: Nordstrom Rack adds more stores to 2025 lineup — here’s the list]

When it comes to key strategies for optimizing brand/product mix in 2025, nearly seven-in-10 (69%) leaders plan to cut low-performing products/categories. More than half (56%) said they plan on diversifying product offerings across various sales channels, while more than a third (36%) plan to find new brands to partner with.

The inaugural Decoding Department Stores: Research & Insights Report surveyed 55 retail leaders currently employed by a department store/national retailer that falls into one of the following categories: Luxury, fashion, footwear, beauty, and sports & outdoors. All respondents were director level or above, and had a buying, merchandising or planning role. The survey was fielded July 18 - Aug. 23, 2024.

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