Macy’s incoming CEO Jeff Gennette revealed at the Bank of America Merrill Lynch Consumer & Retail Technology Conference last week that the department store plans on making significant changes to its struggling brick-and-mortar presence.
The changes include dedicated clearance racks, fewer coupons, more third-party stores-within-stores, the expansion of its Bluemercury cosmetics brand and a decreased emphasis on store associates, indicating that the brand is turning itself more into a discount-focused department store.
Despite the iconic brand’s recent struggles, Gennette said that 10% of the 43 million people that shop at Macy’s every year generate half of its $26 billion in annual sales. With that in mind, Macy’s still has a large contingent of loyal shoppers that will be affected by the changes.
The RTP team discusses whether becoming more of a discount retailer is a good move for Macy’s, and whether the department store accomplish this without sacrificing the elements that its loyal customers value in the shopping experience there.
Debbie Hauss, Editor-in-Chief: Well, JCPenney’s move in the opposite direction did not work. If Macy’s abandons its core customers then this type of initiative is likely to fail. It sound a bit like a desperation move. I personally have visited a store transformed from Macy’s to Macy’s Backstage and I was severely disappointed and unimpressed. It did not feel like Macy’s in any way. It was a mess. I don’t think Macy’s should go so far as to associate its name with that kind of retail environment. If discount for Macy’s is the way to go – and we’ve seen much success with other discount chains recently – then I would suggest Macy’s completely rebrand those stores.
Adam Blair, Executive Editor: We may not like the idea of the venerable Macy’s becoming a discount retailer, but I’m wondering if the company has any realistic alternatives. When a retailer with as distinctive a “personality” as Neiman Marcus is struggling with poor financial results, what are the prospects for a middle-of-the-road brand like Macy’s? And don’t forget that Macy’s must factor in enormous fixed costs in terms of real estate, inventory and personnel as it deals with declining mall traffic and fierce competition from online competitors. Closing underperforming stores is a short-term solution that will only diminish the retailer’s brand presence further. I agree with Debbie that if Macy’s does go the discount route, it will need to rebrand in a way that fosters a positive perception of its new identity.
Alicia Esposito, Content Strategist: Growing up, the Macy’s at my local mall was my favorite store. It always had the best products and the best Christmas decorations. I also loved roaming from the clothes and shoes to the perfume and makeup, to the home goods and cookware. I could get lost in it. Recently, this same store was slashed in half. One half remained…