The last time the department store business was challenged so much was when big malls opened, said Michael Koppel, Nordstrom's chief financial officer.
Now, with the tremendous growth of e-commerce and digital technology, the department store business is at an inflection point, Koppel told analysts at an investment conference last month.
"Before that, everybody was in some big downtown department store and they had these giant, 500,000-square-foot, 600,000-square-foot, 700,000-square-foot stores, and they only grew to that box," Koppel said.
The digital growth, he said, is "super exciting, and customers are responding, and we're investing."
The experimentation is evident in things like Nordstrom's launch of TextStyle in May, a new take on the personalized shopper in which a purchase just requires sending the word "buy" along with a code. The retailer also has made it easy to buy items featured on Instagram.
The industry's bright ideas aren't limited to technology. Nordstrom, Macy's, Kohl's and J.C. Penney all have been chasing the high profit margins that cosmetics traditionally bring — buying specialty companies and setting up partnerships.
Marvin R. Ellison, president and CEO-designee of J.C. Penney, said an omnichannel customer — the industry term for a shopper who may connect with the retailer at the mall, but also via smartphone app or other digital avenue — shops 2.5 times more than a typical customer.
The company is rolling out new apps and plans to partner with Apple Pay, but it's got to get moving.
"Candidly, we are behind," he said. "We're one of the few brick-and-mortar retailers today where you can't buy online, and pick up in-store same day."