Can a legacy brick-and-mortar retail brand truly reinvent itself? For the century-and-a-half old Macy’s, the past couple of years have been strewn with challenges: In 2017, the department store leader closed 68 stores and laid off thousands of workers as it battled slowing sales and growing online competition from Amazon and other retailers.
In 2018, it announced the closing of 11 more stores and more layoffs. But this year, Macy’s showed strong signs of a serious comeback, with bold steps that it hopes will position it for long-term profits in an omnichannel landscape. A host of future-forward, tech-savvy innovations helped sales climb a welcome 4.2% at the beginning of the year, though that number slowed in the second quarter, unsettling investors.
Despite those unclear results, their efforts have been applauded by retail experts and many are watching to see which of their innovative strategies takes hold.Here are some of the varied ways Macy’s is shape-shifting for success:
Macy’s recently acquired New York City concept store Story, which built an uber-cool reputation by working with brands, local retailers, and artists to curate rotating shopping experiences with different themes every few months, such as “Made in America” and “well-being.”
Macy’s can take advantage of under-used square footage and differentiate its merchandise mix. It also hired Story founder and CEO Rachel Shechtman as the company’s new brand experience officer. In a note to clients, Cohen & Co. analyst Oliver Chen said: "Story represents the future of retail — curation, editorial storytelling, interactive events and displays ... and will help amplify Macy's Instagrammable moments and help connect with Millennial shoppers.”
With an eye towards blurring the divide between e-commerce and brick-and-mortar, Macy’s recently announced it acquired a minority stake in b8ta, a technology presentation startup that offers retail-as-a-service, serving as a store-within-a-store to help boost Macy’s new pop-up, experiential-based retail concept, The Market @ Macy’s.
Macy’s also recently announced a partnership with Facebook in The Market, which will curate 150 e-commerce brands on a two-week rotation at nine Macy's stores this holiday season. It will include assortments in apparel, accessories, beauty, home decor, technology and more.
Macy's has expanded its use of virtual and augmented reality to help grow its furniture business, hoping to increase transaction size and reduce returns, with a pilot that has scaled from three to 60 stores.
For example, in the furniture department of Macy's Herald Square in New York City, customers can wear Oculus headsets to picture a sofa or a dining table in their home, swapping pieces to see how everything fits. Similarly, an augmented reality feature is currently in testing on Macy's mobile app, which will allow shoppers to use their smartphone camera to judge how Macy’s furniture would look in their space.
At the Shoptalk Conference in March, Macy’s chairman and CEO Jeff Gennette tantalized the retail world with news of a planned nationwide rollout of Mobile Checkout, powered by the Macy’s mobile app, by the end of 2018.
Designed to speed up checkout in-store, Macy’s claims Mobile Checkout will be as simple as scan, pay and go — which sounds similar to the concept of Amazon Go, the grab-and-go grocery “store of the future” that has begun to slowly roll out.
The idea is that customers can download the free Macy's app and join Macy's free Wi-Fi network, then scan items using their phone’s camera and the app’s built-in scanner. Relevant offers and rewards will be applied, and customers can pay on the app with their pre-registered credit card to complete the transaction.According to Gennette at Recode’s Code Commerce, all of Macy’s changes are part of an entire recipe for success. “Our customer wants a great experience anytime and anywhere she shops with us,” he says. "We're going back to the way department stores used to be — the services they used to provide,"