The department store is a monument, very much like a church or museum, explains Vittorio Radice. It is about experience, not products. The product comes and goes, the store remains.
Department store doctor
Join us for a fascinating talk with an experienced retail manager who is also known as ‘the department store doctor’, renowned for his ability to revitalise worn-out monuments and turn them into modern, attractive meeting places. In this interview he reveals the similarities between a good spaghetti and a relevant store – it’s about cooking with the right ingredients, in the right amount. But we kick off with the obvious question…
Do you have a childhood memory of visiting department stores?
“Not really. I grew up in a region without department stores. However my summer job was at my uncle’s furnishing company. He was a supplier of many European and American department stores. That was my first acquaintance with this unique world. Then, at the beginning of the eighties, I applied for a job at Associated Merchandising Corporation or AMC as it was better known, the largest buying office for department stores at that time. I joined them when they opened an office in Milan to supervise the furniture business. I stayed there for ten years. Back then, department stores were still very much in fashion. They were seen as the places of innovation. I remember those fancy names in America, like Burdines in Miami, Bullock’s in Los Angeles, Bloomingdale’s in New York, Woodward & Lothrop in Washington, Filene’s in Boston, Foley’s in Houston… All had contemporary designed stores, they made real efforts to please their customers by offering unique products in a wonderful environment with really personalized service. They were recognized as ‘the store in town’, always changing and competing to create the most extravagant action to impress the industry, the media and the customers. It was a booming era for this business.”
And how is the business now?
“Well, like every other industry, there are companies that have made no transformation since then and now find themselves in trouble. Others have embraced change and are thriving. Our business in Italy is three times as big as it was ten years ago, even though we closed half of the stores. That is because we are responding to people’s desires. Everywhere in the western world, people are in need of aggregation and belonging and they use products to express that. Our stores have become meeting points where these needs can be fulfilled.”
Carpets at Selfridges
You started in the department store business at Selfridges. I was told that when you started there, they were still selling carpets on the first floor…
(laughter) “Yes, yes, carpets were on the first floor. On top of the escalators. Just seeing carpets there made the store look old and stale. On a normal day, at Selfridges you will have thirty thousand visitors. In reality you will be able to help probably a tenth of that. The other ninety percent develop their own journey, walking around, looking at the products, touching and trying them. Therefore the store has to be very appealing if you want visitors to enjoy the journey and fulfil their expectations. When you see piles of carpets, with that typical smell, and probably with a rather aged uninterested sales associate next to them, then your impression is not that of a fresh, contemporary and inspiring place. The whole sex appeal of the place disappears.”
You transformed Selfridges into a really sexy department store, a real icon. How did you do that? How did you convince the team?
“It’s a long and difficult process that takes years. Treasuring existing customers is paramount as they have been loyal to you all along. You need to expose them to changes during a slow but continuous process. Especially the loyal shoppers want to be exposed to new things all the time and if you don’t move at their speed, you will lose them. Therefore the most important element in our business is continuous undetectable change. The minute you stop evolving, you’ll lose customers and you’ll lose the company. For retailers that have not changed for a while the process is more difficult. You’ll start introducing new areas, new designs, new materials, new music, new lighting… You’ll employ younger sales associates. You’ll change graphics, environment, communication, you’ll talk to designers, artists, architects… However, once that machine starts rolling, it becomes easier. But the first three to five years of a change program are very difficult.”
An attraction for the city
Wat is the biggest threat for department stores in your view?
“Think about where department stores have come from. Not a single department store around the world has been created by a corporation. They were all family businesses, that probably started with a grocery store somewhere on a corner and then developed into the largest store in town. When you have the biggest store in the city you have a responsibility. In a way, you represent the city. So you want the store to be beautiful, you manage it very much like a public enterprise. Something you take care on behalf of the whole city. Imagine people going to work every day, passing in front of the windows of Illum in Copenhagen, one of our stores. If the windows look good, you’ll go to work happily. If you see ugly windows, you’ll arrive in the office with a bad temper. So what is the biggest threat? The danger is in treating department stores as a normal retail business, where every store is just ‘another store’. If you’re looking for synergies, don’t step into this business, because this is not a normal retail business. This is not a business that can be duplicated around the world. You need to go down deep into the fabric of the city and understand your function there.”
The city itself is very important?
“You need to make sure that you work for the city and the city works for you. Berlin would be different without KaDeWe but it would still be there. But KaDeWe couldn’t exist without Berlin. We must realize the role department stores are playing in keeping city centers alive. The store is an attraction for the city alongside the landscape, the monuments, hotels and restaurants. If the department store does a good job, the city center will thrive. People will be attracted to it and other activities will succeed and remain open. The minute the department store fails or loses its appeal, the entire city center falls in. Chain stores and small stores can relocate easily, but department stores will never be able to relocate. The department store is there when you are born, and is supposed to still be there when you die.”
You stress the importance of local relevance?
“I think the department store is a very local concept that interprets the life and spirit of a city. I shiver when I go to Dubai and I see European and American department stores trying to interpret the local lifestyle. While in Dubai, I would prefer to see the local store that knows and represents the local way of life, the local fashion, the local food and the local mood…”
“I remember an old black and white print advertisement, a photo of a car park in Miami, with palm trees and a young couple in jeans and sunglasses, getting out of the car. And the name was Burdine’s. That image could only be Miami. Then in New York, I saw a photo of a young couple stepping down the stairs of a commercial jet plane. That image could only be La Guardia, Newark or JFK airport. And the brand was Abraham & Strauss. Back then, every brand communicated in a different way in a different city. Just by putting the name on the image you knew where it was and what kind of lifestyle it wanted to convey. But now in the US all the stores have the same name and the same look. Their tone of voice and image is equal from East to West. Their ads are probably showing a well-dressed model in a studio with a sign that says ‘SALE, 50% off’. There is no soul to it.”
“We are proud to keep our three names in Germany: Alsterhaus in Hamburg, Oberpollinger in Munich, KaDeWe in Berlin. Originally, there was a project of calling them all KaDeWe, but we froze that. We have to value the fact that the three of them are very different. Three different cities, climates, habits. Three different buildings, built in different times, with different architecture and lay-outs. Will you have the same self-service restaurant on the top floor in every store? Or will you have the best restaurant in town with the best view in whatever corner that can be achieved ? Those are decisions you have to make. Alsterhaus in Hamburg is the only store with a view on the Alster lake! Other department stores in Germany have self-service restaurants selling food. We are selling the view.”
A meeting place
I can imagine that you have these beautiful flagshipstores in the big cities of the world, but what about smaller cities? In Osnabruck there is a local department store called Lengermann und Trieschmann, it’s what they call a platzhirsch, they have just one store… Galeries Lafayette has several smaller stores in France, and they also have problems… Isn’t it more difficult?
“In smaller cities, department stores are a difficult business to run, but if they can really service local habits, like the one you mentioned in Osnabruck, they can survive. Clearly, it’s a different scale compared to stores in London, Paris or Milan. You’ll see some of the same brands, although in different dimension and adjacencies. You know, the ingredients to cook your spaghetti are the same for everyone: pasta, water, salt, tomato sauce and cheese. But I bet my spaghetti is better than yours! Maybe I put in a little more oil, add salt in the end, use cheese from the local farm… With your ingredients you can make sure that your store is relevant locally, offering a delicate and targeted mix of international brands and local names, making use of the local attractions and taking advantage of the city’s peculiarities. Our new store in Rome took 12 years to build. We suffered a lot of stressful moments when we found 2000 year old Roman ruins in the construction site. We ended up turning a problem into a fantastic asset. We opened the shoe department in there… Now that’s the opposite of building a two-story box next to the highway and expect customers to be impressed…”
Why do people love department stores that much? They even cry when a store has to close…
“It’s that sense of belonging to a place. An open place for everyone. Think of the people in Hamburg or Osnabruck: the department store is the meeting place for them. When it rains, they walk into the department store. When the bus is late or the train is canceled they know the store is open for them. It is always there for them. Will politicians and trade unionists understand this function? Will they understand the civil function of a department store? Walking through clean environments, receiving a smile along the way, receiving courteous and polite advise, influences our everyday behavior and changes people’s attitudes. Today the vast majority of people are visiting department stores more as a leisure activity than to buy products. This is proven by the fact that in most of the Western countries, Sunday has become the second most important day of the week in terms of visitors and trade. Exceptionally, in the Nordic countries, Sunday has become number one. But in some other places Sunday opening is still considered a taboo by politicians and trade organizations fighting to keep stores closed and visitors away. However, modern department stores have proven that it is possible to make money transforming themselves into a must visit community center at the service of citizens and tourists.”
Competing with online
What about e-commerce? What do you think when you see these beautiful premium online platforms with terrific service and astonishing packaging… Isn’t that a threat?
“Today, if you try to sell products, you will fail, because anyone can find these products faster, easier and cheaper online. Department stores cannot compete with online. If we want to keep our stores and our city centres alive alongside the large e-commerce players, let’s sell something other than products. That ‘something else’, for us, is our locations, our buildings where people meet people. Where smiles count. Where an immediate gesture is registered. Think of the Eiffel tower. It will probably have some online offer: you can buy the puzzle or the scale model. But you can’t visit the tower online! Nothing compares to the experience of walking high up the stairs of that metal structure and admire Paris from the top.”
“Don’t get me wrong, we invest heavily in online. For us, it is a means of communication. In one second, you can announce a concert at La Rinascente tomorrow afternoon. We can’t do that three weeks ahead, we would have too many people coming over… You can build a much more intimate relationship by sending customers a personalized sms, by calling them by name, by sending them an e-mail… Everything has become much easier. That is the e-commerce we are looking for. That is the e-commerce that brings us closer to the people that enjoy our passions. In the coming months we will also be launching our transactional presence. It will reflect in full our commitment to physical presence and work in the same way our stores are designed and operated.”
Today we see fantastic mono brand stores, by Louis Vuitton, Cartier, Hermes and so forth. Does the department store have a main advantage over these brand stores?
“Certainly! The department store is much bigger. If you were to spend one hour, then you’d better spend it in a department store. You won’t last one hour in a mono brand store… But in order to get the consumer to spend an hour with us, we need to provide content. It’s like reading a book. If the first three or four pages are boring, you’re very likely to ditch it. If those pages are interesting, you’ll continue and you will read the whole book. So if we can capture the shoppers attention in those first five minutes, we can keep them for an hour or more. The ‘super brands’ provide the content and we provide millions of visitors.”
The building is the essence
In that context, architecture seems to be important to you?
“It’s number one, really. The building is our essence. That’s why our masters put so much effort in designing beautiful stores. I recently visited De Bijenkorf in Rotterdam, designed by Marcel Breuer. What a store ! It is going through a major program of remodeling and I will be curious to see the completed project.”
“Selfridges creates expectations just by its façade, which is one of the most recognizable façades in the world. You can create high expectations, but then you need to keep them up once people are inside. Most stores fail to provide the integrity of the whole package: external presence, sense of arrival, contemporary environment, easy circulation, feeling of discovery and surprise, homogenous density, clear and defined personality. If you are able to provide these attributes, then it becomes a winning department store.”
Did you work with different architects at Selfridge’s?
“There were hundreds of architects working at the Selfridges remake. Even today at KaDeWe we are working with OMA and Rem Koolhaas. He designs the masterplan of the store. But then every room, every floor, every corner is designed by a different agency. The shops-in-shop for the brands have to fit seamlessly within the overall design. So you have three layers: first, the architect of the masterplan. He defines the essence and presence of the store. His main responsibility is the interpretation of the company and the location – the actual building including façades, windows, circulation etcetera… This work has to last a hundred years. Then you have retail architects for every floor and every room, lasting a decade. Finally you have a brand creative team for each individual unit, with very frequent changes. There’s a lot to say about how the shopper journey develops throughout these enormous buildings. To make the customer journey as interesting and memorable as possible we play with all the ingredients, steering them imperceptibly to new and exciting moments.”
What are your plans with Rem Koolhaas? It looks exciting…
“We worked extensively on the ease of circulation within KaDeWe. Even in a store that has been around for over 100 years, the main default remains circulation. The ground floor works very well but the position of the escalators at the back of the store deflects people from visiting the front part of the store on the upper floors. This problem prevents KaDeWe from maximizing its reputation as one of the best department stores in the world. We have expressed our concerns and desires to OMA and they came back with a very good proposal, that we will be implementing in the next six years. Another deficiency of KaDeWe is the absence of a large panoramic terrace. A store of this size needs open space for visitors to enjoy. That is one item we are working on. You can continuously add projects in the next 20 years to make the place relevant, and completive. It’s a question of how fast or slow you want to implement the attractions without disturbing the current business that, after all, pays our salaries today.”
You talk about a scope of twenty years… You have no doubt about the future of these department stores?
“I have no doubt about the future of these places, provided we continue focusing on people: visitors, customers or staff. We’re making sure that our department stores are places you can’t miss in a lifetime. I have no doubt that people will travel more and more, looking for moments to remember, whether it be places, art, people, smiles or bags or shoes. What people really care about is personal experiences. Have you been to that city, to that hotel, did you see that movie? Have you been to Selfridges? Have you been to KaDeWe? In a conversation around the table I’ll be proud to say I’ve done that, I‘ve been there, I’ve seen it. That’s what makes people happy. Millions of people every year are happy spending time browsing and buying in our stores. We need to continue telling them stories they have never seen or heard before.”
The message seems to be clear: as a department store, make sure that you work for the city, and the city will work for you…
About the project
With the interview series ‘A Love for Department Stores’, retail expert Erik Van Heuven and journalist Stefan Van Rompaey (RetailDetail) set out to explore the world of department stores. Discussions with international investors and managers will identify the challenges and opportunities for this retail industry. In the digital age, department stores are not relics from the past, but the ultimate example of retail as entertainment. The interviews will appear on the RetailDetail websites in the coming months, in RetailDetail Magazine and will result in a book about the history and future of department stores in Europe.
As a former top manager at, among others, Galeria Inno and Karstadt, Erik Van Heuven knows the sector through and through. As chief editor of StoreCheck and RetailDetail, Stefan Van Rompaey has been following developments in the retail sector for decades.
by Erik Van Heuven