Here’s one for the century. The reopening of La Samaritaine in Paris redefines the whole concept of a department store. In fact, “department” is immediately antiquated and irrelevant in this new marketplace model.

We recently caught up with Kevin Roche who was charged with overseeing the retail planning and design of the massive LVMH project to reimagine and reinvent a centuries-old retail business. Roche explains, “I spent seven years overseeing the store planning, design, and construction of La Samaritiane. This was in addition to re-envisioning retail LVMH Gallerias in Istanbul, Venice, Hong Kong, Macau China, Cambodia, Sydney and Auckland.” Turns out, having a global perspective on how design influences the customer experience is critical in thinking big about what a retail store can be.

[callout]Are you in the low-cost, high-speed efficient distribution business delivering a massive amount of goods … or rather are you in the business of creating dynamic and locally influenced curated experiences? If you’re a department store caught somewhere in the middle of these approaches, your future may not be that bright.[/callout]

Evolutionary Inevitability

What if the department store as we know it goes away? As it should! We are overstored and overstuffed with generic merchandise that does not compute to more sales and even less to profit. Roche asks, “Are you are in the low-cost, high-speed efficient distribution business delivering a massive amount of goods? Or are you in the business of creating dynamic and locally influenced curated experiences? If you’re a department store caught somewhere in the middle of these two approaches, your future may not be that bright.”

Past as Prelude

“There are a few players around the world, mostly Europe and Asia, that look back to look forward. They are students of the past to learn how to define and strategize the way forward with long-term commitments towards their future,” says Roche.

For the future of relevant retail, context and location mean everything. One-of-a-kind destinations are curated, not formulaic. These unique places make shopping one part of an integrated experiential whole

Roche explains, “When the early Grand Dame department stores opened in the late 19th century, they were attractions for social gatherings; a place to learn, an emporium of experiences and the promise of selective merchandise. These stores were owned by entrepreneurial-driven business pioneers with a multiple generational vision. Sound familiar? Think: the Weston’s of Selfridges, Barnard Arnault of LVMH, the Lee family of Shinsegae and Rick Caruso developing one-of-a-kind commercial villages in California!”

“What if the American department store returns to a lifestyle experience embracing a diverse mix of categories, experiences, merchandise with diversity and newness that represents social currency and relevance? In former times, entire store floors were dedicated to the arts, galleries, exhibition spaces and even performance theaters. In Asia and Europe today, floors are dedicated to educational programs for all ages: cooking, language classes, health and fitness and painting. Food and sprits complete the lifestyle experience and ensure merchandise and experiences are available at any time in the customer’s day,” says Roche

Roche adds, “If we look at history, the founders of these Grand Dames were driven by vision and ensuring an experience that gave their guests a reason to come, share their time and inspire their curiosity. Multiple generations could spend the day exploring these galleries of commercial, social, and educational services and merchandise.”

Experience by Design

What really is experience? You recognize it when you have it, but it is basically intangible. Roche states there are very smart teams writing about the value of the intangible. He refers to the work of McKinsey & Company to explain the new measure of experience: “Investment in intangible assets that underpin the knowledge or learning economy, such as intellectual property (IP), research, technology and software, and human capital has risen inexorably over the past quarter century and the Covid-19 pandemic appears to have accelerated this shift toward a dematerialized economy. Are we seeing the start of a new stage in the history of capitalism based on learning, knowledge, and intellectual capital? As economies recover from the pandemic, could a wave of investment in intangible assets breathe new life into productivity and unlock more growth potential?”

Roche’s key takeaway for retail leaders is to get used to operating in an economy of intangibles. Experience trumps endless aisles of undifferentiated merchandise — in all categories.

Selfridges is another case in point. According to Business of Fashion, “Selfridges’ sales surged as the department store invested heavily in upscaling its unique mix of pop-ups, experiences and glitzy spaces for luxury concessions, helping the company to surf London’s international shopping boom. Vittorio Radice (now vice-chairman of La Rinascente) revived the store’s experience-driven approach. The result was a tapestry of shopping and experience that drew a wide range of visitors — tourists, local office workers and wealthy expatriates alike — to a store that became famous as a social destination, offering a \”day out\” for clients rather than a place to simply buy things. Selfridges incorporated mini-golf courses, gardens, cafes and talk-worthy exhibitions (such as displaying the wreckage of a plane from a failed attempt at the first non-stop transatlantic flight) all in a bid to make Selfridges a popular and entertaining destination.”

An American Story

Many American department stores over time eliminated what was perceived as costly amenities for the higher margin racks, rows and shelves of apparel. Roche explains, “Having spent my 45-year career planning and designing department stores, gallerias, and mono-brand stores in one format or another, I have always been challenged by the traditional positioning strategies of legacy thinking that more space would equal more sales. Merchants typically abandon curation for higher-margin brands and goods.”

In Roche’s experience, operational efficiencies often overrule innovation and creative investments. Faster and cheaper with a rollout mentality of sameness prevails. He asks us to consider the demise of a federation of department stores, each with iconic DNA and contextual relevance, replaced by big generic boxes burdened by debt, leading to what he calls a store chain of “toxic creeping sameness.” He cites the disappearance of Marshall Field’s (now rebranded as Macy’s) as an example.

Paris Revelation

Enter La Samaritaine, the latest and brightest shining star on the retail horizon. Roche explains, “I believe it is missing the point to focus only on LVMH’s level of investment and how long it will take to turn a profit. How long it will take to generate an acceptable return for shareholders may not be the only incentive for this project. Let’s face it, who else other than LVMH would invest a reported 895 million Euros?”

Take a look at Paris’s La Samaritaine: a grand, 70,000 square-meter complex of Art Nouveau and Art Deco buildings in the center of Paris, which first opened in 1870 and represents one of the architectural wonders of its age. Blessed by an extraordinary 19th century design following a seven year-long redesign process, La Samaritiane reopened in June 2021. Reminiscent of times past and in partnership with the city of Paris, La Samartiane includes a Cheval Blanc luxury hotel and the remodeled store encompasses over 20,000 square-meters and 600 brands, a spa and beauty salon, 12 cafes and restaurants, plus housing, offices, and a nursery. The new-old store refines the brilliance of a mixed-use commercial and residential space.

A New Model

According to Roche, “The future of the American department store may lie in its original definition: an emporium of multiple categories, services, and experiences, i.e., a store of departments — not a big box of acres of apparel, pads of beauty, branded shop-in-shops and nods to a café. What if the future of the American department store is found in its original creation and long-term commitment of authentic contextual relevance, unlimited innovation and curiosity? This would lead to merchandising strategies of local bundling of an assortment of merchandising categories, localized food and restaurant offers (beyond the popular plug-and-play national brands) and category innovation. What if no two were ever the same? What if the American department store chain became fewer stores and the chain was replaced by a group of truly one-of-a-kind destinations. What if we practiced less is more?”

Innovation Deficit

From Roche’s perspective after the last 15 years of working and living in Europe and Asia, the largest investments in department store innovation and newness have not been in the U.S. department store sector. He says, “Yes, Sak’s Fifth Avenue in New York has been renovated and Macy’s Herald Square got a facelift, but what I do not see is a commitment to curation and bundling of meaningful lifestyle offers compelling an individual to spend the better part of a day in store as a social experience and an outing fulfilled with learning and intangible value.”

He believes what can be done or should be considered is neither a secret nor a magic formula. Although there are a lot of consultants expounding on the future of the department store, he says in the end it takes committed and long-term visionary leadership with the means, both financial and intellectual, to inspire and deliver world-class destinations worthier of a demanding any consumer’s time.

The La Samaritaine project began for Kevin Roche in 2010 while living in Paris working with LVMH’s Le Bon Marche and La Grande Épicerie executives to develop the Master Plan for the iconic left bank department store’s renovation program. As SVP Design and Construction for DFS Group/LVMH from 2013-2019, Roche dedicated seven years to this project.