Home >  Business

From the racks to the registers, everything's changing as the big retailers defend their turf

Sunday, June 30, 2002

By Teresa F. Lindeman, Post-Gazette Staff Writer

May Department Store Co. last month sold $1.05 billion worth of shoes, shirts, dresses, swimsuits, bedspreads, coffee makers, bras, earrings, purses and whatever else is tucked away in that corner of the second floor. You may have helped out by going to a One Day Sale at Kaufmann's, clutching that coupon from the newspaper.

	Frank Merriam, manager of J.C. Penney at the Mall in Robinson, hopes that the store's new centralized customer service counters will be more convenient for shoppers. (Bill Wade, Post-Gazette)

Yet thousands of cash registers discreetly tucked through its 436 stores actually rang up about 4 percent less merchandise than in the same month last year. Even worse, sales in all the company's stores that had been open at least a year tumbled 7.6 percent.

And it wasn't just May. Retail institutions such as Sears, J.C. Penney and Lazarus parent Federated Department stores all saw same-store sales slip during the month -- and not for the first time.

Problems in department store land run deeper than one slow month, and the oldest names in the business are deep in rehab, trying to cure themselves of bad habits and dated techniques.

Please ring me up

The most obvious fix would be to stop hiding the cash registers. And the cashiers.

"We want you to be able to buy stuff," confirmed Bill Seal, Pittsburgh district general manager for Sears, Roebuck & Co.

By September, every Sears store in the region should have central checkout stations where someone always stands ready to ring up a sale. Lazarus' Downtown store has had a version for a couple of years and J.C. Penney is in the midst of a chainwide rollout. May is trying express checkouts in eight test stores.

"When you go to a grocery store, you don't walk up and down the aisles to see who is going to check you out," said Seal, showing off the hard-to-miss checkouts at the Sears in the Mall at Robinson.

They haven't done a complete about-face. Everybody's new central stations are a bit fancier than those at Home Depot. And the planners are keeping specialized desks where they think customers want more help, such as in lingerie and men's suits at Penney's and home entertainment at Sears.

Dragged into it

It's going to take more than a wood-paneled checkout to get customers back after they've seen Tar-jay (Sometimes known as Target).

But taking that step is a sign the department stores have accepted that they have problems that throwing more coupons at can't help. They seem to have conquered their fear that borrowing ideas from discounters would ruin their persona.

"They were trying to stay away from competing in the mass merchant category, but the reality is they do," said Lynn Gonsior, executive vice president of Design Forum, a retail design firm in Dayton, Ohio.

May, which is shuttering the Kaufmann's central offices here in August and cutting 1,200 Downtown jobs, is often cited as one of the best-managed companies in the business. Yet, it has inexorably been slipping down the sales curve.

J.C. Penney is experimenting with other devices to make shopping more enjoyable, including plentiful seating areas and a more carefully edited selection of merchandise. (Bill Wade, Post-Gazette)

J.C. Penney was losing money when it hired an experienced savior, Allen Questrom, in late 2000. He'd turned around Federated Department Stores, parent of Lazarus, a decade earlier. Sears has been trying to reinvent itself regularly for the past decade.

They all saw the venerable Montgomery Ward fall into the abyss.

"It has made them all look really hard," said Gonsior.

Notice the cluttered floors packed too full with too much stuff that can be found at every other department store? Confusing layouts that hide the restrooms, the elevators and the juniors department? The hard-to-find dressing rooms?

A different customer

"The department store world is still conceptually dealing with the woman of leisure rather than the working woman," said Paco Underhill, managing director of Envirosell consulting and author of "Why We Buy: The Science of Shopping."

That woman of leisure had more time to pick through racks and several hours to wander around putting together outfits.

Now, Underhill said, value is nice, but convenience is king. That can take many forms, from bringing in upscale shopping carts to ease the load to setting up displays that clearly show a hot trend and how to put together an outfit.

It might just mean better, clearer, simpler signs.

The Lazarus lab

This may seem like a reach, but one of the most interesting recent attempts to remake the department store has roots in the Lazarus store in Downtown Pittsburgh.

"If you look very closely at Pittsburgh, you will see the perimeter architecture ... the way the goods are presented, is very similar to Easton," said Steven Bergquist, operations vice president and creative director for Lazarus parent Federated Department Stores in Cincinnati. "Even the lighting."

Easton is the new Lazarus store at Easton Town Center, and the streetscape development in Columbus, Ohio, has bells and whistles not yet available to southwestern Pennsylvania shoppers.

At the kids playaway area, parents of 2- to 7-year-olds can leave little ones for two hours. Moms and dads consistently spend more without having to keep track of their children -- something places such as Ikea and grocers already knew.

Lazarus at Easton also has a Starbucks coffee shop (customers can sip from cups while they browse), places to sit and watch TV while someone else shops ("As The World Turns" was on during a recent visit but Ohio State football games are a major draw), and television monitors above some checkout stands that give local news, weather reports and updates on store events.

Already, executives have begun rolling out test store experiments to other locations, including price scanners that let customers do their own checks and computer kiosks to accept online job applications.

The teen area also has a future beyond Columbus. This fall more locations will be converted to the new format, Bergquist said.

Store planners developed the Gen Now layout after checking out the specialty stores that have dominated high school fashions in recent years. They noticed a lot of interaction between girls shopping for clothes and their boyfriends.

In the new store, young men's clothing rubs shoulders with the juniors department. Those shoppers get their own entrance, never even seeing Misses pants.

A cybercafe lets them check e-mail for free. Vending machines feed the munchies, and a phone allows free local calls. Extra seating -- kidney bean-shaped benches in the dressing room -- allows moms and friends to watch the fashion show.

Signs and sight lines

Not every department store can be a laboratory, but eventually ideas developed in corporate planning meetings filter out.

Seems everyone is working on the sign issue. Customers have gotten tired of wandering around in search of restrooms and mens' socks. They were confused by different-colored sales signs and puzzled about where the Boys size 6s start.

Sears has blue-and-white signs over the checkouts that can be seen all over the store. J.C. Penney's walls and ceilings have been reorganized graphically to clearly separate the men from the boys, while Lazarus is trying out a sort of upside-down street sign so you'll know where you came in.

Other differences:

Lower shelving. Stacking goods up to the ceiling blocked the view, so most displays are shrinking. Sears even has added central glass elevators where possible. They don't cut off the view and customers with strollers don't have to hunt for them.

Brighter lighting. If stores can't add windows, they can at least use higher-wattage bulbs.

Seating. Look for chairs to start showing up near the escalators and the dressing rooms. "I call it interior parking lots," said Underhill, who gets parked somewhere while his wife tries on clothes.

Strollers/shopping carts. They're still perfecting these but customers who aren't loaded down buy more.

	Frank Merriam, manager of the J.C. Penney store at the Mall at Robinson, right, with Paula Soltis, visual manager, assess the design of the girls section of the store. (Bill Wade, Post-Gazette)

The same stuff

Credit many changes to Kohl's, the non-mall department store that has been gobbling market share since it appeared out of the wilds of Menomonee Falls, Wis. Kohl's made central checkouts and shopping cart-strollers seem respectable.

It also made a dent in the dreaded sameness that had crept into the industry.

Hunting for a new dress isn't much fun when four anchor stores at the mall have the same six choices. It becomes sheer, hard labor when each sales floor is crowded with heavily laden racks packed so tightly it's difficult to find the right size.

That complaint applies to bedding, crystal and just about any department of the store. Sometimes there is just so much stuff -- apparently the same old stuff -- that the customer gives up in confusion.

Now Frank Merriam, manager of the J.C. Penney store in Robinson, can plant himself in the middle of his redesigned housewares department and offer a different view.

"If you stood here as a consumer, you could see the clarity of the statement we're trying to make."

The store has organized its racks into squares that can be easily cleared by the average stroller.

Executives have edited the merchandise. Where there might have been 100 items in the dishware collection, there might now be 60.

But if customers like the blue bowls, there should be plenty. Once the company buyers have made a choice -- a statement, as retailers prefer to say -- they order more of each item.

All the department stores are hard at work developing merchandise that their competitors won't be able to carry.

May held a runway fashion show in New York City two weeks ago to presents new, proprietary women's clothing lines. Sears will debut its Covington brand this fall and soon be offering styles from Lands' End, the catalog merchant it just bought. Federated got in early with apparel lines such as Inc.

Specialties

Mom always said, figure out what you do better than anyone else.

The home of Craftsman tools is giving people who want more power their own entrance. Tool Territory, a 14,000-square-foot Sears game room of drills and saws, is in place at Robinson and coming to most other area stores.

Home entertainment has been funkified with display stands that resemble the robotic maid Rosey from the Jetsons' cartoon that allow shoppers to try out video cameras. Nearby, a computer kiosk hooked up to the Internet lets them check prices for electronic items at competitors such as Best Buy and Circuit City.

May has been building its gift-giving lines and acquiring bridal businesses. If brides buy their gowns at its David's Bridal shops and register for towels at Kaufmann's, they may keep coming back the rest of their lives.

J.C. Penney almost abandoned a strong reputation in home goods. In the late 1970s and early 1980s, the company began paring its housewares department, convinced it could get higher profit margins with apparel.

Executives have since reversed direction.

Just nine months ago, the dinnerware, glassware, cookware and small appliances department at the J.C. Penney at Robinson shared 2,100 square feet of the department store's second floor. Now, the cookware alone covers 2,100 square feet.

Skin deep?

It's all so much window dressing, yet it's not. Behind the changes customers see, these entrenched corporations are shifting employees around to try to make it all work.

J.C. Penney has abandoned its traditional system in favor of three in-store teams. The replenishment team comes in around 6 a.m. to put out all the merchandise brought in overnight. The signage team keeps the graphics up-to-date while the sales crew focuses on taking care of customers.

No more trying to get the merchandise out of boxes while a customer waits impatiently.

Sears has also been shifting employees. In Tool Territory, for example, there are three classifications -- tool experts, sales consultants and cashiers.

Because of various remodelings and staff changes, Seal expects he'll need between 750 and 800 new people across his 16-store district.

Other differences are more subtle. Department stores had been rather entrepreneurial places for years, with individual managers being given a lot of leeway in merchandise buying and presentation. That's becoming a thing of the past as corporations find they can buy cheaper in bulk and get a more consistent look with headquarters control.

The retailers, flush with prime pieces of real estate, are even trying to alter their box mold. J.C. Penney, May and Federated are testing smaller stores that might fit more easily into the new streetscape shopping developments.

Can the department store be saved? Yes, said Design Forum's Gonsior, but it will definitely look different in 10 years -- more interactive, more interesting.

Yes, said author Underhill, but they've got to get back to their traditional strength of selling quality. Is a shirt from Kaufmann's really worth more than one from Wal-Mart?

"Part of what the department store has to do is a better job of explaining why people should trade up."