Macy’s is a household name across the country and has been an American icon for over 160 years. One of the world’s largest retailers, it has always been a trendsetter in the industry. Macy’s was the first to feature Santa Claus during the holiday season, pioneered window displays to attract customers, and of course founded the enduringly popular Macy’s Thanksgiving Day Parade.
Still, the retail department store model feels increasingly outdated, no matter the brand. Can Macy’s, and other large scale retailers, make the pivot and grow alongside their customers? Let’s dive into Macy’s current plan—and see what we can learn from their strategies.
Macy’s already supports retail stores and an e-commerce platform. But one of the biggest takeaways from their recent investor meeting was that they will be closing 125 brick-and-mortar locations. Though these closures are a big announcement, they in no way signal the end of in-person shopping. Instead, what we should take away is that Macy’s knows omni-channel shoppers are their biggest money makers, bringing in more money per year than those who shop their brand solely online or in-store. Downsizing stores but improving customer experience, upgrading their website, introducing curbside pickup, and working to make online returns easier all work to serve this blended online/in-person shopping experience.
Huge brands, like Target and Walmart, have already successfully made curbside a must-use feature. The surge of the gig economy has made convenience top of mind for shoppers. As these practices become more common, it’s important to consider your future tenants’ ability to provide convenience for customers.
Private label goods have long been a way retailers can use their most valuable shelf and online space to maximum benefit. For example, Costco’s in-house Kirkland brand brings in billions of dollars for the big box retailer every year, and Amazon has poured their strength into private labels supporting everything from phone chargers to knitwear.
Macy’s plans to bolster their own private labels, laying groundwork to build out not one but four $1 billion brands over the next 3 years. Creating a demand for its own product will boost Macy’s profit margins and allow for quicker fulfillment. When considering tenants for your own spaces, study the uniqueness of their product, the clout behind private label brands, and whether it turns your retail establishment into a destination shopping experience.
Optimizing Retail Space
While Macy’s will be closing some large scale stores in underperforming markets, as well as reconfiguring their headquarters, brick-and-mortar remains a key business opportunity. The brand has upgraded some existing stores to match their shoppers tastes, and also plans to open smaller footprint discount stores and a totally new storefront with a local focus. This new storefront, Market by Macy’s, plans to capture a local boutique feel, partnering curated Macy’s goods with local brands and in-store events. The brand’s Backstage stores will offer off-price deals to consumers looking for a bargain.
Smaller stores with a more curated selection, as well as free community based events, open the doors to a less overwhelming shopping experience and build brand loyalty. West Elm, which regularly hosts pop-up events with local makers from the community and also provides skill based workshops, has proven that a major brand can build intense loyalty by offering these services. Make sure you’re in on this trend by asking yourself whether your retail tenants will use out-of-the-box strategies to make their businesses centers for community development.
A Work In Progress
Only time will tell if Macy’s strategy to remove bloat, enhance the customer experience, and build new product lines will succeed in buoying their brand for another 100+ years. Each strategy has proven effective for other large-scale brands and can be woven into a successful strategy for even the smallest businesses.
As business owners work to adapt old brands to new ways of shopping and experiencing retail, keep these strategies in mind for selecting successful tenants. Need some help? Retailsphere can help you find the businesses who are bringing new ideas and fresh perspectives to your retail centers. Reach out today today to schedule a demo and see how simple your tenant search could be.