I think there’s still a need for in-person retail, but I think part of the issue with Macy’s was just oversaturation. I live in a medium sized American city and there are somehow FIVE Macy’s locations within a half hour drive time of where I live- four full sized stores and one of the new small format stores. That’s just too much physical retail. Two of the large format stores are closing- one is in a dead mall that has few other tenants, and one was the sole remaining tenant after a former dead mall got redeveloped. So in neither case was the closure a surprise. I hope the remaining locations stay open though, they always seem much busier.
As Whateve mentioned above though, department stores in general are struggling. They used to be one stop shops where convenience met fashion and they still are, but I think that their target audience has split off. More convenience-minded customers now just get their basics at Target or Walmart. More fashion-minded customers will go directly to the brands they’re interested in, which now have their own online stores and small in-person stores, whereas you used to only be able to find those brands in a department store. This leaves department stores kind of in an awkward place where they don’t have a clear customer base.