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Written by Kelly Burke

David Jones has become the latest scalp in the retail wars, announcing on Friday it will shed 120 jobs from its head office and from its suburban store network.

The announcement comes just one day after another retail chain at the opposing end of the market - discount retailer Big W - announced a further string of store closures in Sydney's west.

Be they purveyors of upmarket designer brands or bargain-basement basics, our department stores appear to be in a whole lot of trouble. Why?

It's all due to the rise of the Millennials, retail analyst Steve Kulmar told 7NEWS.com.au.

The age when Baby Boomers roamed the earth as the dominant species is rapidly coming to an end and they may very well take the bricks and mortar department-store-as-we-know-it with them.

Kulmar, an analyst with Retail Oasis, says David Jones' announcement on Friday, that the job cuts were part of the retailer's plans to refocus on digital and online retail, had probably come too late.

Challenging time

A DJs spokesman said the job cuts were being made "to achieve greater alignment between our team and the strategic priorities and initiatives of the business (and) reflect our strong focus on cost at a challenging time for retail".

The changes would not impact "customer experience" in any way, he said.

But that's more the pity says Kulmar, because the customer experience David Jones is offering is at the heart of its problem.

Baby Boomers

"David Jones has been living off the wealth of the Baby Boomers for the last 30 years, and they're just not the dominant demographic anymore," he says.

The fact the retailer has just spent $200 million upgrading its flagship Elizabeth Street store in Sydney proves David Jones is still catering for its old customers, at the expense of attracting new ones.

"It shows that DJs has completely ignored the massive generational shift that's been happening for the past 10 years and has now come to the fore," Kulmar says.

Inferior product

Baby Boomers are dropping dead and those who remain are wielding significantly less purchasing power in retirement.

The demographic has been overtaken by people in their 20s and 30s well educated in e-commerce, who are not necessarily eschewing the department store experience altogether.

"They're shopping, but at international department stores in the online space," says Kulmar.

"In comparison to Amazon and E-bay, stores like Myer and DJs, what they are offering is just so inferior."

Kulmar says David Jones needs to start "investing seriously" in digital commerce, deepen its product offering, and close its unprofitable stores, if it expects to survive in the age of the Millennial.

Big W closures

On Thursday, Big W announced it would close a further three stores, in Fairfield, Chullora and Auburn, all in Sydney's west, after previously announcing in April its intention to close about 30 underperforming stores and two distribution centres over the next three years.

The "replacement product" sector - the industry term for discount retailers that sell everyday products - has been particularly hard hit by the younger generation's seismic shift towards online shopping.

"Big W is consolidating its footprint, closing stores all quite close to each other and investing more in a few larger ones," Kular said.

"K-mart, Target, Best and Less, they'll all be thinking the same thing. It's just that Big W is probably being more public about it."

Relief on the way

According to the latest Deloitte Access Economics report into retail forecasts, the federal government's tax cut sweetener set to benefit several million Australians in the second half of 2019 may provide some limited pain relief to the retail sector towards the end of the year.

"Our outlook for 2019 is a tale of two halves, and there is some good news ahead," said the report's principal author, David Rumbens.

"Monetary easing by the Reserve Bank of Australia for the first time in nearly three years (resulting in) lower rates will leave some much-needed cash in the pockets of Australia’s highly indebted households.

“In addition, the post-election sugar hit of tax offsets for low and middle earners are likely to boost household incomes in the second half of 2019.

"Usually tax cuts result in a marginally higher take-home pay packet, supporting a gradual and ongoing increase in consumption.

"The difference this time around is that the tax policy changes will be putting cold hard cash in the hands of consumers once they have lodged their returns.”