Lessons from department stores on how to reach youth and (re)establish your relevancy.
A few months ago, my colleague wrote about the merger of Sears and Kmart (“Blocking and Tackling”) and offered tips on how to avoid identity lapse. His core advice was to never lose sight of the fundamentals: member service, cooperation, and problem solving.
It seems the retail world has more lessons to offer. An article in the March 21-27 issue of Businessweek addresses how the once-wiltering bastions of consumerism, U.S. department stores, are making a comeback.
So how are they doing it? By appealing to Gen Y … and touting a bit of exclusivity.
JCPenney, Macy’s, Dillard’s, and Kohl’s — anchor mid-market retailers in shopping and strip malls across the country — are “luring shoppers with exclusive, trendy items,” Businessweek states.
Through celebrity apparel lines, premium denim, and designer-lite accessories, department stores are once again relevant to young shoppers (at Macy’s, 18- to-30-year-olds spend 50% more than other age groups).
The strategy appears to be working. For the past three quarters department stores have posted stronger numbers than their smaller, specialty counterparts (such as Gap). When comparing stores open at least one year, department store sales in February rose 5.7% compared to 3.2% for apparel store rivals, reports Businessweek.
Now, credit unions aren’t going to offer Vera Wang mortgages or Madonna credit card rewards (or a Russell Simmons prepaid debit card), but there are some best practices here:
1. The department stores of yore were generic and impersonal, one-size-fits-all and truly off-the-rack. No matter what commodity you deal in, none of these adjectives are complimentary. So department stores looked for ways to differentiate their brand. They’ve solicited star power. They’ve positioned themselves to continuously offer a new experience/product/enticement rather than falling back on standard seasonal cycles. Are you creating a fresh experience for your members when they walk into a branch or visit your website? Are you personalizing and mixing up your financial offerings?
2. Department stores were hurting, so they targeted an audience and developed an innovative solution. If you are trying to reach Gen Y, are there local businesses in your area that appeal to that audience? Can you form partnerships in which young people that use your financial services earn services or rewards at those businesses?
3. “Large merchants are aggressively locking up the rights to sell lines exclusively in an effort to make their stores destinations,” reports Businessweek. Your standard products, at the core, might not be “exclusive” in that members can’t get anything remotely similar anywhere else. That doesn’t matter. Identify what makes your product different, emphasize that, and show your members the credit union is truly where they want to be.
For more lessons from the retail industry, read:
Retail Industry Harbors Customer Service Lessons
Best Practices On Aisle Three