Despite the continued popularity of department stores such Bloomingdale's and Neiman Marcus among luxury consumers, the sector as a whole lost significant market share in recent years, according to a new study by Unity Marketing.

The study finds that retail sales in traditional department stores have dropped 13 percent in the past five years, from $96.3 billion in 2000 to $84.1 billion in 2005. Wal-Mart and other discount stores have drawn lower-income customers away from department stores, while the luxury shoppers that used to be the most loyal patrons of department stores, are turning to other shopping destinations, according to the Luxury Report 2006 from Unity Marketing.

The trend is particularly prominent when luxury consumers are shopping for home luxuries, the report notes.

Bloomingdale's and Neiman Marcus ranked best among luxury shoppers' preferred department stores, according to the study, which factors in both shopping destination and the number of stores. Bloomingdales and Neiman Marcus were 49 percent more popular than the average department store for luxury shoppers.

Nordstrom ranked third, appearing 40 percent more popular than the average department store. Lord & Taylor and Saks Fifth Avenue rank fourth and fifth respectively, the survey found.

Macy's ranked as the chief department store shopping destination (chosen by 23 percent of luxury shoppers), but Macy's has the highest number of retail stores. On a store-by-store basis, Unity Marketing finds Macy's ranks sixth in popularity and Dillard's ranks seventh.

The report notes that Bloomingdale's and Neiman Marcus are finding new business on the Internet.

“Admittedly, retailing over the Internet still leaves much to be desired from the shoppers' point of view, but the simple fact is luxury consumers are using the Internet more as a vital resource for luxury shopping, be it purchasing products, comparing prices or researching purchases,” Pam Danzinger, president of Unity Marketing. In the first quarter 2006 the Internet ranked among the second or third most popular shopping source in 13 out of 16 luxury product categories tracked, she added.

Unity Marketing's Luxury Report 2006 studies luxury consumers' buying and spending preferences.Source : nationaljeweler.com

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