Global Department Stores Market By Type (Apparel and Accessories, FMCG, Hardline and Softline), By Size (Large and Small) By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The Global Department Stores Market size is expected to be worth around USD 208.10 Billion by 2032 from USD 133.0 Billion in 2022, growing at a CAGR of 4.7% during the forecast period from 2023 to 2032.

The department store market is an important part of the retail sector because it offers a variety of products & services under one roof. Which include clothing, electronics, home goods & beauty products. In recent years, the department store industry has seen significant changes because of the rise of online shopping & changing consumer preferences.

Online shopping has grown in popularity, and many traditional department stores have struggled with adapting to it which results in store closures & bankruptcy. Some retailers have adapted to this changing landscape by investing heavily in their online platforms and offering omnichannel shopping experiences that combine in-store & online shopping. The department store industry is highly competitive. Retailers compete on price, customer service & quality.

Driving Factors

Consumer Spending and Innovation in Technology Drives Market Growth

Consumer spending is a major driver. The amount of disposable income available to consumers affects their buying power and willingness to shop in department stores. In times of economic prosperity consumers tend to spend more at department stores because they have more disposable income. Due to uncertainty or recession, consumers can become more cautious in their spending. This can negatively impact department store sales.

Technology innovation is another important driver. Department stores must adapt as technology advances to remain relevant and meet customer expectations. Many retailers invest in digital technology to improve the shopping experience and create an omnichannel experience. Some department stores use virtual reality to let customers virtually try on clothes. Others integrate mobile payments and augmented-reality features into their apps.

Restraining Factors

Increase in e-Commerce and Competition Can Restrain the Department Stores Market Growth

The department store market is facing many challenges which could affect its growth & profitability over the next years. The increase in e-commerce has been a major restraint on the department store market. Many consumers prefer shopping online because of the convenience & accessibility. This has resulted in a decrease in foot traffic and sales at many department stores.

The increased competition from other retailers is another factor that has a negative impact on the department store market. The increase in discount retailers, online marketplaces & fast fashion brands has given consumers more shopping options than ever. This has led department stores to face increased price competition and to differentiate themselves by offering unique products & experiences to customers.

Growth Opportunities

Growing E-Commerce Offers Great Opportunities in the Department Stores Market

While the department store market has been challenged in recent years, it still offers opportunities for growth and success. One opportunity is the continued use of e-commerce. This allows department stores to reach a larger audience and provide a seamless shopping environment across multiple channels. A growing trend in sustainability and ethical sourcing presents department stores with an opportunity to differentiate themselves by offering eco-friendly and responsible products.

The rise of experiential retail is another opportunity for department stores to differentiate themselves through engaging and immersive in-store experiences. This will keep customers coming back and attract them. Department stores can provide customers with a unique shopping experience by investing in innovative technology & store design, this is not possible online. Department stores can also partner with other brands or retailers to offer special products & services, creating a feeling of exclusivity that will help them stand out in a crowded marketplace.

Latest Trends

Investment in Online Platforms and Improving In-Store Experience is Trending in the Market

In recent years, the department store market has undergone significant changes due to changes in consumer behavior & e-commerce. Many traditional department stores have faced difficulties with these changes, leading to store closures & bankruptcy. Some department stores have thrived by investing in their digital platforms, improving the in-store experience, and focusing on their unique product offerings.

There has also been a trend toward smaller, more specialized departments that cater to specific segments of customers or offer a curated product selection. Another trend is to adopt new technologies such as virtual and augmented realities in order to improve the shopping process. Besides these challenges, the department store market is an important segment in the retail industry and it is expected to continue to grow in response to changing consumer preferences and needs.

By Type Analysis

The Hardline and Softline segments accounted for the Largest Revenue Share in the Department Stores Market in 2022.

Based on type, the market is divided into apparel and accessories, FMCG, hardline, and Softline. Among these types, the hardline and softline segment is expected to be the most lucrative in the global department stores market, with the largest revenue share of 47.5% and a projected CAGR of 4.5% during the forecast period.

The increasing trend between the new generation of home decorators & furniture designers is driving the growth of the hardline and the Softline segment. A variety of products are available in department stores which allows customers to choose directly from the stores. The growth of the Softline and hardline segments is fueled by the growing demand for luxury home decor items & organized products.

The Apparel and Accessories Segment is the fastest-growing segment in the Department Stores Market.

The commercial segment is projected as the fastest growing type segment in the department stores market from 2023 to 2032. Owing to the growth of the apparel and accessory segment is primarily driven by the increasing fashion trends among young people also the changing retail landscape across brands. During festive seasons, department stores often offer great deals at affordable prices.

This is another factor that drives the growth of the apparel and accessories segment. The high expenditure on apparel and accessories made by women who are financially independent around the world is also increasing the market demand. The apparel and accessories segment will grow at the fastest rate over the forecast period.

By Size Analysis

The Large Size Department Store Segment Holds a Significant Share of the Size Segment in the Department Stores Market.

Based on size, the market is divided into large-size stores and small-size stores. Among these, the large-size store segment is the dominant type segment in the department stores market, with a market share of 67.7% and a CAGR of 4.6%.

Owing to the economies of scale of large department stores allows them to offer more products at lower prices. They can also invest in their online platforms to create a stronger e-commerce offering. Large department stores can also negotiate deals better with suppliers.

Small Size is Identified as Fastest Growing Size Segment in Projected Period.

Small is also an important size segment in the department stores market and it is expected to grow faster in the size segment in the department stores market with a CAGR of 5.3% and market value is 32.3.%. It is the fastest growing due to its unique offerings, personalized services, and localized product selection. Small department stores can often provide a more personalized experience & carry merchandise that is more curated to appeal to the local community.

Department Stores Key Market Segments

Based on Type

• Hardline and Softline
• Apparel and Accessories
• FMCG

Based on Size

• Large
• Small

COVID-19 Impact Analysis

Supply Chain Disruptions Impacted Negatively on the Department Stores Market

The COVID-19 Pandemic has harmed the global department store market during the COVID-19 pandemic, retailers reported a severe decline in their revenue as a result of the prolonged closures of physical stores. Supply chains were also disrupted which affected global retailers. Except for pharmacies & groceries, all other department shops saw a drop in sales due to the pandemic.

This resulted in a huge loss for the retailers. Retail sales also dropped by around 25% between February & April, with a significant decline of 90% for clothing & accessory stores and 42% for department stores. Department store revenue declined, as the retail industry was seriously affected by the COVID-19 pandemic.

The pandemic has accelerated some trends in the industry. For example, the shift to e-commerce and the importance of omnichannel retail. Department stores that had invested in digital platforms and online platforms were better prepared to weather the pandemic. Some even saw an increase in sales as consumers moved their spending online.

The pandemic also impacted consumer priorities and preferences, as people began to focus more on practical and essential items than on luxury or discretionary items. Some department stores have changed their product offerings in response to these changes. They now focus on essentials and home goods as well as athleisurewear.

Regional Analysis

North America Accounted for the Largest Revenue Share in the Department Stores Market in 2022.

North America will be the dominant region in the global department stores market. It is expected that North America will have the highest revenue share, 46.4%. North America should also register a CAGR of 4.7% over the forecast period. Owing to in North America, increasing urbanization is driving the demand for environmentally friendly department stores.

The presence of major players like Target Corporation, Macy’s Inc. & Walmart Inc. also contributes to the growth of department stores. Department stores are popular for being convenient & offering a wide range of products. The region is therefore expected to grow at an impressive CAGR during the forecast period.

Asia-Pacific is Expected as Fastest Growing Region in Projected Period in Department Stores Market.

APAC is expected as fastest growing region in the forecast period in the department stores market with a CAGR of 5.6%. Retail in India is benefiting from growing digitalization & urbanization. Increasing disposable incomes and lifestyle changes, especially among the middle class, are also contributing to this. Department store retailers are also using AI & biometrics to attract customers and increase revenue.

The Indian middle class, their increased education, their standard of living, and their willingness to save money are all factors that are driving the demand for department stores in this region. The region is therefore expected to grow the fastest during the forecast period.

Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Market Share & Key Players Analysis

The existence of both new and established firms in the market defines it. Major participants in this industry are providing numerous benefits, like growth.

Lotte Department Store announced the opening of a new department store in Korea as well as a new hypermarket at Incheon Terminal & Incheon Branch in 2019. It will provide a selection of high-end and stylish goods from local and foreign companies, including the unique Lotte.

Market Key Players:

• Marks and Spencer Group Plc.
• Macy’s Inc.
• Sears Holdings Corp.
• Target Corporation
• Nordstrom Inc.
• Walmart Inc.
• Isetan Mitsukoshi Holdings Ltd.
• Kohl’s Corporation
• Chongqing Department Store Co. Ltd
• Lotte Department Store
• Other Key Players

Recent Developments:

• In February 2023, Macy’s introduced PATTERN Beauty, a brand that offers a wide range of products, including washes and treatments, styling tools, and much more. PATTERN, the brand’s very first department store partner expands Macy’s hair care product portfolio, especially in the curl category.
• In January 2023, Marks & Spencer announced a nearly half-billion-pound investment to build bigger & better stores in the UK. The investment by the retailer will create over 3,400 jobs in the UK and aim to make the M&S estate fit for the future & provide a seamless shopping experience for customers.

Report Scope: