In February, Macy’s then-newly appointed CEO, Tony Spring, said the strategy, aptly named ‘A Bold New Chapter’, served as a strong call to action. “It challenges the status quo to create a more modern Macy’s, Inc,” Spring explained. “We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value. Our teams are energized by the work ahead as we accelerate our path to market share gai
re gains, sustainable, profitable growth and value creation for our shareholders.”
Of course, this isn’t the first time Macy’s has attempted a turnaround.
In February 2020, the previous CEO and chairman Jeff Gennette announced the launch of a three-year turnaround strategy dubbed ‘Polaris’. Gennette stated that the corporation would “focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams.”
However, the strategy was seemingly more focused on significantly reducing the
physical store count, rather than taking effective, long-term measures to ensure the legacy retailer’s revival.
Prior to that, in 2017, it announced a ‘North Star’ strategy centered on
customer loyalty. Whether this latest effort proves to be a success
remains to be seen. But for Jeff Warren – Macy’s vice president of selling and customer experience, and one of the key people involved in reinvigorating the department store’s relationship with its customers – sticking with the status quo is not an option.
“If you aren’t creating a wonderful customer experience and you don’t
have a developed brand love, eventually the customer is not going to continue to stay
with [you],” he told Inside Retail.
“So for us, we’ve got an awesome brand and we have a very loyal customer base. How can we continue to give them reasons to come back to us?”
Bringing science into the art of selling
Enter Macy’s Bold New Chapter, a multi- layered plan that involves refreshing its product assortment with a slew of new brands, such as the recently launched menswear brand Mode of One, and reshaping the company’s entire brick-and-mortar presence.
For Warren, it will affect his team’s work in two key ways.
“First and foremost, it places a major emphasis on customer experience for my team to step up and deliver across the nameplates we support,” he said.
“Second, it places a major focus on growing Macy’s organization that lights up how we best position our stores to grow in the future.”
To further streamline operations, Warren and his team have been working to democratize access to customer data for the retailer and its contact centers.
“In a relatively short period of time, we’ve moved to a place where any piece of data that you need to run in a store or contact center is readily available in the business intelligence tool that we utilize,” Warren explained.
“Now the operators have a single source of truth and I think that’s empowered them in so many different ways. It’s taken a lot of the confusion out of running the business and modernized our selling operations…It’s enabled us to put a little bit more science into
the art of selling in our stores because we’re able to get pretty close to real-time reads on a team’s performance.”
A scenario in which this democratized data comes in handy for a store associate is when a customer makes repeated visits to a store and can’t always access the same sales associate.
“You come in to see your stylist, they know exactly what happened on your last visit. Or even if your stylist is not in the store that day, the next person who interacts with you can pick up exactly where you left off before,” Warren remarked.
It is also useful when a customer is engaging with various points of sale, from shopping online to connecting with a customer service associate to interacting with in-store associates.
Whether a customer is speaking with a customer service associate in a store or over the phone, or is shopping via a mobile device,
Macy’s new setup better ensures a universally informative and engaging shopping experience, Warren affirmed.
From wrong to right
The last 10 years have been challenging for department stores
around the world, and Macy’s is no exception.
The company was at the top of its game in 2014, with revenue peaking at $28.1 billion and stores numbering 868 globally.
However, rising real estate costs, increasing competition from e-commerce players, and a general lack of innovation in the product offering and customer experience meant the company was already on shaky ground when the Covid-19 pandemic arrived,
and physical retailers took a massive hit across the board.
By last year, Macy’s global net sales amounted to $23.1 billion, down from $24.4 billion recorded a year earlier, marking a dismal downturn in profit from just a few years prior.
As part of its restructuring under the Bold New Chapter, Spring announced the plan to cut the fat and close down 150 of Macy’s underperforming stores by the end of
2024. The CEO explained that despite the fact that these shops took up about 25 percent of the company’s square footage, they represented less than 10 percent of sales.
More recently, the company has been focusing on a retail concept known as First 50, a pilot program of 50 smaller, strategically placed retail locations with carefully tailored product curation.
“Having 30,000 square feet instead of 300,000 square feet, we have to be much more disciplined with the exact product we think the customer in that area is going to be interested in,” Warren pointed out.
The initiative has shown success so far, with 3.4 percent growth in comparable sales in the first quarter and 1 percent growth in the second quarter of financial year 2024.
Based upon the improvement in its net promoter score, a metric that measures customer loyalty and satisfaction, Warren said Macy’s believes the First 50 template is highly scalable, and that the company is going to continue on its path toward opening more stores of this type in the future.
Moving forward with Macy’s existing stores and First 50 locations, the executive explained that the team is focused on working smarter, rather than harder.
“We’re really investing in the places where the customer has told us we failed in the past.
That’s not always just putting more people in our stores, but it’s putting the right tools and processes in place to help our colleagues stay focused on the customer over everything
else,” he said.
‘Theater of retail’
Any retailer worth its salt knows that how a customer feels when they’re inside a store is just as important, if not more so, than providing them with the type of product they’re seeking.
From in-store activations, such as the retailer’s annual Flower Show, to nationally recognized events such as the iconic Macy’s Thanksgiving Day Parade in New York City, Macy’s has always invested in experiences that provide enjoyment and long-lasting memories for the Macy’s shopper.
“We’re always thinking about how we can really lean into what the theater of retail is and how we can create better experiences within our four walls that will drive newness and traffic, and create wonderful experiences for our customers. Anything that allows us to play off that theatrical concept in our stores is definitely something that we are pursuing now and well into the future,” Warren concluded.
This story first appeared in the December 2024 issue of Inside Retail US magazine.