As the post-pandemic "boom" fades, department stores now rely more than ever on technology to stay top of mind with international customers, according to the International Association of Department Stores (IADS), which highlights several notable initiatives.
The association highlights the rise of "super apps" that integrate online shopping, financial services, loyalty programs, and even restaurant booking, among other services. This model has proven particularly successful for the Mexican department store chain El Palacio de Hierro, which reports higher visit frequency and greater spending among its users. Germany's Breuninger and Denmark's Magasin du Nord are also pursuing this strategy.
Both Breuninger and Magasin du Nord utilize artificial intelligence to optimize their data utilization. Breuninger adopts a "test and learn" approach to refine its tools, while Magasin du Nord shifted data management to its e-commerce team to boost conversions with AI. In France, Galeries Lafayette focuses on automated product descriptions, size recommendations, and faster responses to customer inquiries.
AI is increasingly serving customers and enhancing personalization. "Department stores are deploying digital concierges capable of handling most customer interactions while offering a personalized service," says the IADS, citing El Palacio de Hierro, which bets on conversational commerce via WhatsApp (Meta).
Digitalization continues to transform department stores without reducing them to mere showrooms. They now also assume logistical roles beyond click-and-collect. Galeries Lafayette reports increased activity thanks to its ship-from-store model, which enables staff to ship online orders directly from stores. Breuninger experiments with gamification in its loyalty program, offering members access to limited-edition products and exclusive events.
In the United Arab Emirates, Level Shoes (part of Chalhoub Group) focuses on near-instant delivery alongside the expansion of resale services, according to the IADS, which earlier this year examined how international department stores are transforming customer relations.