Like fashion brands and retailers, department stores have had to evolve their loyalty programs in response to changing customer expectations and the growing appeal of online shopping after the pandemic. With their extensive product offerings, effectively managing customer relationships is now essential to retaining shoppers. The International Association of Department Stores (IADS), representing around 15 global retailers, highlights the latest CRM strategies shaping the industry.

Department stores have shifted “from a traditional, broad marketing approach to targeted, ongoing customer interactions,” the organization explains. “In the past, one-to-one interactions depended on skilled salespeople.” Now, these retailers are transitioning toward predictive models to anticipate customer behavior and deliver hyper-personalized experiences, requiring advanced technical infrastructures to process data more precisely.

Data management is central to this shift. El Palacio de Hierro has consolidated multiple disparate databases into a single platform in Mexico, integrating everything from checkout transactions to travel agency bookings and restaurant receipts. Meanwhile, at Magasin du Nord in Denmark, consumer segmentation modeling has been implemented, creating multiple sub-profiles and leading to a loyalty program that leverages sophisticated customer profiling, combining internal data with publicly available information.

Another example is Tsum in Kyiv, which uses a real-time database to track changes in customer behavior and product interests. This allows it to implement retention measures and send personalized messages. Communication strategies are becoming increasingly tailored.

Loyalty programs are also evolving to engage better and satisfy consumers. Bloomingdale’s in the U.S. focuses on gathering customer feedback to improve the shopping experience, while Breuninger in Germany prioritizes its most premium clientele. Swiss retailer Manor has partnered with Mastercard to facilitate credit payments, noting that cardholders spend significantly more than other customers. Meanwhile, the Chalhoub Group in the Middle East has adopted WhatsApp as a new communication channel, achieving higher conversion rates than traditional email and SMS campaigns.

Retailers are seamlessly blending their online and in-store experiences to engage customers across both channels. According to IADS, Boyner found that omnichannel shoppers buy more frequently and generate higher revenue than single-channel customers. In response, the department store introduced a 90-minute delivery service from its physical locations. In the UK, Selfridges has taken an unconventional approach by rewarding customers simply for the time spent in-store, regardless of whether they make a purchase.

In conclusion, the federation stresses that “retailers must remain agile and innovative in their approach to customer engagement, to stay ahead in a competitive market, by continually improving the online and in-store experience.”

*IADS represents department stores including Beijing Hualian Group (China), Bloomingdale’s (U.S.), Boyner (Turkey), Breuninger (Germany), Centro Beco (Venezuela), Chalhoub (UAE), El Corte Inglés (Spain), El Palacio de Hierro (Mexico), Falabella (Chile, Colombia, Peru), Galeries Lafayette (France), Lifestyle International Holding (Hong Kong), Magasin du Nord (Denmark), Manor (Switzerland), The Mall Group (Thailand), and Tsum Kyiv (Ukraine).