Long before there were e-commerce retailers with next-day shipping, buy-now-pay-later financing, and advertisers tracking every click, there were department stores with friendly human associates and layaway services.
The U.S. Census Bureau defines department stores as retailers "that have separate departments for general lines of new merchandise, such as apparel, jewelry, home furnishings and toys, with no one merchandise line predominating." For decades, the department store model ruled retail, but as consumer habits shifted away from shopping malls, its popularity waned. Americans have been increasingly shopping online, a trend accelerated by the pandemic, which has led to decreased spending at most types of brick-and-mortar stores.
As a result, many big-name department stores struggled through the 2000s, and after the pandemic started, many big-name retailers had to file for bankruptcy protection. A number of established department store brands still standing today have reestablished themselves post-bankruptcy as updated, modernized versions of their old selves.
Take Nordstrom, for example. The department store spent recent years consolidating retail space and corporate structure, developing artificial intelligence that recommends customized outfits, and implementing "buy online, pick up in store" options—a purchasing method that's become the brand's most profitable consumer channel. But as a new chapter in retail shopping opens, it's still unclear how fast large brands like Nordstrom can continue adapting to changing consumer habits and tastes.
To better understand how department store sales have changed over 30 years, Experian examined data from the Census Bureau's Advance Monthly Retail Trade Survey to analyze retail habits and trends. Since its inception in 1992, the survey has estimated monthly sales for retail and food service companies based on surveys completed by retailers with at least one or more physical stores that sell items directly to consumers.