Matthew Pillsbury

These Iconic Department Stores Are Thriving in the Digital Age

The great American department store looks back to look forward.

During Susan Shapiro Barash’s childhood in New Jersey, a trip with her mother across the Hudson River to Bergdorf Goodman was the definitive New York City experience.

“Bergdorf’s represented the pinnacle of shopping,” says Barash, now a college professor. “My mother wore a pillbox hat and the kind of dress and shoes I would wear to an afternoon wedding. We would walk around and have lunch and order the chopped salad. I think the atmosphere of calm and sophistication at Bergdorf’s really soothed her.”

During the second half of the 20th century, similar scenes took place all over America. I spoke to women across the country recently, and each had similar memories of the grand days of the department store. They fondly recall these multistory, city-block-size ecosystems, self-contained and all-purpose shopping destinations where mothers could outfit their entire household in the morning, enjoy lunch with their family at the restaurant, schedule haircuts, and maybe pick up an ice cream in the afternoon.

In New York, Philadelphia, Chicago, and Dallas, the legendary stores with etched-in-granite names such as Gimbel Brothers and Marshall Field’s were the consummate “experiential” retail experience—shopping, dining, and in-real-life entertainment—50 years before we even had the term. Today, the stores are etched in our memories.

Growing up in Manhattan, my brother and I got our children’s haircuts at Best & Co., a white-marble palace on Fifth Avenue. My mother bought housewares at B. Altman and dresses for her genteel job in book publishing at Bonwit Teller. Those stores are long gone; when my mother died, the sprigs of fading purple violets on her vintage Bonwit’s hatboxes and shopping bags evoked a vanished world as poignantly as the Stork Club ashtray from the night she met my father.

Entertainment was part of the experience. “When my mother took us to get our Christmas dresses and our Easter bonnets at Dayton’s, it was an event,” says news anchor Mary Alice Williams, who grew up in St. Paul. From the Wanamaker’s Christmas Light Show in Philadelphia to the Fifth Avenue holiday windows in New York City, iconic locales battled to outdo one another every December.

Such celebrations became major tourist attractions. Macy’s has staged the New York Thanksgiving Day parade since 1924, and it also produces the annual Fourth of July fireworks display, which includes a TV special with big-name headliners. These days, the picture has changed.

Buffeted by fierce competition from e-commerce and a new generation with higher in-store expectations, an alarming number of department stores have closed, and others are under siege. Malls, often anchored by department stores, have shuttered. The Internet revolutionized capitalism with 24-hour shopping and delivery to your doorstep; the big-box stores offered lower prices and the time-saving convenience of buying in bulk.

The shoe salon at Neiman Marcus in Dallas.

Courtesy Neiman Marcus

Even in flourishing urban areas, rising real estate costs have increased the financial pressures on the bottom line. So it was major news when the Dallas-based Neiman Marcus decided to open its first New York City store. The chain is renowned for its innovative retail strategy of Texan hospitality and upperechelon luxury goods, both in stores and in its fantastical holiday catalog—featuring Chanel jewelry, state-of-the-art barbecue grills, and a $7.1 million solar-powered yacht.

Neiman’s will occupy 188,000 square feet of Hudson Yards, one of the largest private real estate developments in the history of the United States, spread over eight blocks of the west side of Manhattan. The development will include residences, hotels, dining, and, of course, shopping.

“We still believe in brick-and-mortar retail,” says Jim Gold, president of the Neiman Marcus Group, which includes 68 stores across the U.S., including Bergdorf Goodman. “But the experience needs to be extremely compelling.” Cue the fireworks.

A little bit of dazzle is what Linda Fargo, senior vice president of Bergdorf Goodman, specializes in and looks for daily. From windows that stretch along Fifth Avenue to VIP suites in the jewelry salon, and right up to the hair salon and the BG Restaurant, which still serves a chopped salad, Bergdorf’s remains a delightful throwback to the grand American department store.

But, says Fargo, it’s the of-the-moment fashion that people come for and leave with in the store’s venerable lavender bags. “We create and present the dream of fashion, and there will always be an appetite for that,” she says. Fargo’s efforts to stay au courant include an in-shop named Linda’s—a nod. to the new culture of the “drop,” featuring limited-edition, surprise fashion.

When that proved successful, she created another, Noir, that opened this fall. It features a lot of—you guessed it!—black. At high-end stores, exceptional service has always been part of the allure, giving patrons the fortunate feeling of being welcomed into an exclusive club. But these days, stores have to be careful to avoid seeming too exclusive, according to John Barrett, whose hair salon occupies the ninth floor of Bergdorf’s.

There’s a new and more modern customer to include. For 22 years, Barrett has had a perch at the corner of 58th Street and Fifth Avenue from which to view the changing landscape of retail. This January, he’ll watch as Bergdorf’s neighbor, the 123-year-old Henri Bendel, shuts its doors.

Down Fifth Avenue, Lord & Taylor will cease operations after more than a century in business, and the location will become a WeWork space. “Malls are closing everywhere, and you have to create a special experience,” says Barrett, who reportedly counts Hillary Clinton and Beyoncé among his customers. “For any store right now, the secret is attraction, seduction, and providing some escape, some entertainment.”

Some of Barrett’s regulars have long-standing relationships with Bergdorf’s in-store personal shoppers, who bring a selection of clothes to the salon for the client to try on when she finishes getting her hair done. Stores hope such pampering will help to offset the worrisome trends in buying habits. The industry’s new mantra is clear, and more than one executive said the exact same thing to me: Retail isn’t dead—but it must evolve.

“People want an experience when they visit a store, not just a transaction,” says Sandrine Deveaux of Farfetch, an online shopping portal that works as a virtual conduit between e-commerce and inperson retail. “The brick-and-mortar experience isn’t going away, but it has to be done differently.”

She would know: She just led the development of a new concept store in London, a hybrid where engineers work alongside the salespeople to see how customers interact with the products, then tweak the selection online. Even the most rarefied experience is hard-pressed to compete with the Internet; according to Jim Gold, e-commerce accounts for 36 percent of Neiman Marcus’s sales.

To that end, the Neiman Marcus Group acquired the online shopping site mytheresa.com. Despite those numbers, many companies are, surprisingly, adding locations. Los Angeles’s Fred Segal opened a new flagship store in West Hollywood last year—a multi-pronged venture that includes a Tartine bakery, a wine shop, and a series of pop-up shops.

Neiman Marcus in the 1950s and, right, Neiman Marcus today.

Bettmann Archive/Getty Images; Connie Zhou/Nordstrom

Seattle-based Nordstrom opened its first Manhattan store in 2018 with a 47,000-square-foot menswear emporium that will be joined by a women’s-wear location across the street in 2019. Nordstrom bills this enterprise as a “campus,” and its services range from shining shoes and personalizing denim to same-day delivery and a DIY returns system for shoppers who can scan and drop their packages and leave.

Can’t make it to the store on time? Nordstrom offers extended or early hours for some customers. Other stores are experimenting with ways to supply the kind of hyper-personalized services that the new generation of VIP millennials
typically seek online—and the kinds of candid, non-corporate engagement they seek in person.

Saks Fifth Avenue's new New York City beauty floor.

Justin Bridges/Saks Fifth Avenue

Saks Fifth Avenue moved the beauty section of its Manhattan flagship from its traditional ground-floor location—a template many department stores have jettisoned—to a space upstairs that is 40 percent larger and features digital “magic” mirrors, which are virtual reality stations (for virtual makeovers), as well as other high-tech wizardry. Saks also recently announced a Fearless Women series, featuring instore talks with rock legend Patti Smith and poet Cleo Wade. In another innovation aimed at communicating with customers in modern ways, Barneys New York just launched a podcast helmed by former Glamour editor in chief Cindi Leive.

As the retail industry searches for new ways to get bodies into stores, Nordstrom is taking the experimentation even further. The company hired Olivia Kim, who is responsible for one of the most exciting retail developments in this decade: Opening Ceremony, in New York City. The SoHo mini– department store capitalized on both street culture and high fashion’s embrace of street culture.

Kim is bringing that same kind of energy and offerings (like avant-garde fashion and ultra-rare cult sneakers) to Nordstroms across the U.S. This grassroots authenticity and priceless evangelism is also seen at Bulletin, a burgeoning chain of shops that offers unapologetically feminist goods from female artisans to a growing community of like-minded customers. Defying the spread of empty storefronts on Manhattan streets, Bulletin opened a flagship at Union Square in August, and it was mobbed even in the dog days of summer.

Bulletin’s brand-building has cultivated a fervent fan base among young women who follow its pungent social media content and feel strongly about its values; 10 percent of all proceeds go directly to Planned Parenthood, and the retail locations offer regular events on topics such as negotiating the gender pay gap. Perhaps that is the ultimate message for the modern department store: Stock merchandise with a message.

At midcentury Marshall Field’s and Neimans, American women rode escalators to liberation. They may have come for the makeup and the clothes and the handbags, but they also discovered a newfound independence in the social interactions and the sense of community provided by the classic department stores. Today’s stores have the opportunity to provide something important that an app or a mouse cannot: high-quality products sold by an actual human— tissue-wrapped and in a really pretty shopping bag.