According to Business Insider, the U.S. dollar has been increasing in value over the past year and has risen about 25% in value against other major currencies. The appreciation of the American dollar is good news for Americans who are traveling abroad, but it doesn’t work so well the other way around.
Because international tourists haven’t been cashing in as much money to convert into American dollars, businesses in major tourism-driven cities (like the Big Apple) have encountered lower sales numbers from international consumers.
Retailers stated that tourism activity during the holiday season, especially at hotels and Broadway theaters in NYC, was lower than usual as well. The city as a whole has seen fewer international visitors in 2015; although there were around 56.4 million visitors going to New York City in 2014, it’s expected that this number will be lower for 2015.
The decrease in tourism may be surprising for New York City during the holidays but it’s not entirely unexpected; considering that nearly 75% of consumers in the U.S. have purchased something online in the past year, brick-and-mortar stores simply don’t attract the same amount of business that they did before.
Some businesses have begun targeting more domestic consumers to make up for the decrease in international sales.
Department stores, for example, seem to be making a major comeback. Stores such as Macy’s, Saks Fifth Avenue, Neiman Marcus, and Nordstorm have all begun opening huge “old-fashioned department stores,” as the Wall Street Journal put it.
Overall national revenue at department stores fell by about 2% during November and many stores even closed locations in other cities, but New York City has actually seen an increased demand for more high-end luxury department stores. Former industrial neighborhoods have been turning into popular neighborhoods for young, wealthy Americans, and as the WSJ stated, “New Yorkers love their department stores. Retail palaces are deeply woven into the culture and image of the city.”
These department stores are also beginning to adapt to the changing mobile payment industry by incorporating iPads at checkout stations and by accepting Apple Pay.
Instead of being just another tourist destination, these stores are hoping to lure in the wealthier residents by tapping into a better customer service experience — and considering how easy it is to depersonalize the shopping experience today, this “retro” take on consumer engagement might actually work.