Bon-Ton announced its liquidation in April 2018 following years of struggling sales and high debt. The challenge for department stores like Bon-Ton is that low and middle income customers increasingly shop at discounters and dollar stores, forcing retailers that once served these customers, like Bon-Ton and its subsidiary brands, to close shop. While this structural decline hurts all mid-market department stores, leading retailers have an opportunity to use digital tools to try to capture some of Bon-Ton’s former customers.
Bon-Ton consistently performed poorly in Gartner L2’s Digital IQ Index: Department Stores, landing in the Challenged category in 2016 and 2017 and faring poorly in the 2018 study prior to its liquidation and removal from the Index.The chain has completely ceded paid search visibility against its own keywords even as it spends on display advertising to promote closeout deals, leaving the field open for other retailers to try to take share.
Some potential frontrunners for scooping up Bon-Ton’s customers include this year’s sole Genius brand, Macy’s, which places frequent Shopping ads against keywords like “bon ton dresses” and owns 16% of all Shopping ads against Bon-Ton keywords. Gifted brand JCPenney reported that it has not yet seen improved sales from Bon-Ton’s closure. But JCPenney performs well in search against Bon-Ton branded terms, particularly against keywords for Elder-Beerman. “Shapewear” keywords were among the most competitive for department stores, and JCPenney led the Index with frequent Shopping ads for Maidenform products sold on the site.
As apparel increasingly moves online, the largest department stores are those best positioned to capture sales such as Macy’s and Nordstrom, which currently lead in apparel sales, site traffic, search visibility, and digital sophistication. These and other major department stores have had strong starts to 2018, with Macy’s, Kohl’s, JCPenney, and Nordstrom reporting positively for 2018 and Kohl’s and Nordstrom heralding double digit growth in digital sales. Just as Best Buy and Dick’s Sporting Goods have thrived after watching their rivals go bankrupt, surviving department stores are fighting to absorb market share as smaller competitors disappear.