VOL. MMXIII..No. 210

Retail By Design | The Brand Experience

Does Macy’s Matter? A Brand Stumbles Towards Obsolescence




Admit it: Macy’s is a slow sinking behemoth, a Titanic in the world of retail which we all watch sink with a certain reverence, nostalgia, but also a degree of relief.


The truth is Macy’s ship has long since sailed and it probably should have packed it in a long, long time ago. Yet they continue to rearrange the proverbial deck chairs.


{ Macy’s is a museum to the dawn of the Millenium when a sea change took place and retail changed forever. }


That they have continued to try and be relevant is astonishing, giving clear insight into the denial of its board of directors. Terry Lundgren, the now former CEO rarely admitted the obstacles, instead touting that Macy’s would become the model for omnichannel retail.



Let’s go bowling: on a weekday afternoon, the cosmetics department at the San Francisco Macy’s is desolate.

After Christmas 2017 he touted it’s 1% increase in holiday sales. Lundgren’s big moment was when he announced that the brand would be come omnichannel.


The fact is, Macy’s aging demographic is far from being omnichannel so what makes you think it matters if you are?


When they installed those self-service bar code machines is when they basically told customers to not bother asking for help.


The truth is, Macy’s still feels like it’s lost in time, 1999 to be exact: the massive scale of floors full of vanilla products and brands that are so boring and all-American, staffed by aging and stubborn union employees who know little if anything about the product they sell.



At top, an optimistic window display; below, signage illustrates Macy’s ubiquitous year-round discounting strategy.

Macy’s is a museum to the dawn of the Millenium when a sea change took place and retail changed forever.


{ “We don’t have our head in the sand as to the significant challenges we face in getting the business growing again,” he says Macy’s CEO Jeff Gennette. }


Jeff Gennette, who earlier this year replaced Lundgren as CEO, seems to know what the brand is up against.


“We don’t have our head in the sand as to the significant challenges we face in getting the business growing again,” he says, in an interview with the Washington Post. “We certainly don’t have all the answers yet, but we are working on them with a sense of urgency.”


I’m not sure which is more alarming: his use of “yet” or “sense of urgency.”


From the company’s 2016 annual report came this optimistic message to shareholders:


“The Company seeks to attract customers by offering most wanted selections, obvious value, and distinctive marketing in stores that are located in premier locations, and by providing an exciting shopping environment and superior service through an omnichannel experience. Other retailers may compete for customers on some or all of these bases, or on other bases, and may be perceived by some potential customers as being better aligned with their particular preferences.”


It’s an oddly knowing statement: starting with an attempt at a positive and ending with a very ominous negative.


The company continues to retail hard-to-move goods like furniture. This department, located on an upper floor, rarely gets footfall.

Macy’s challenges are formidable and in our view, insurmountable – unless the brand takes a giant step in a different direction.


Here are our reasons why Macy’s needs an aggressive transformation:


1) Amazon is tracking to be the largest clothing retailer of 2017 and 2018, with its growing roster of private label offerings. Keep in mind that the largest profit center for Macy’s is women’s clothing.


2) Every month, two-thirds of Macy’s most loyal customers and 70% of Millennials shop at off-price retailers.


3) Macy’s is so addicted to never-ending promotions and massive discounting that they simply cannot survive otherwise. Customer’s are been trained to expect the discounts.


4) The company is saddled with too much real estate, which alone is worth billions of dollars. Last year’s closing of 100 stores is simply not enough.


Which is why it came as no surprise when following another dismal Christmas season, the company announced the closure of dozens more stores.



At top, Macy’s has always hung its hat on bedding sales, discounting major name brands as much as 75% off; below, the company has given up large amounts of ground floor real estate to Michael Kors.

So what is the future of Macy’s?


The biggest problem with the Macy’s experience is its vastness, an unattractive warehouse of bright lights and stacks of stuff.


Macy’s could offer a bolder alternative to Amazon as an online retailer coupled with tightly edited dynamic showrooms offering broader buy-online-pick-up-in-store concepts. Imagine Macy’s with an Amazon Locker offer where shoppers could pick up their merchandise in their own neighborhood.


Of course what Macy’s should have done is just merge with Amazon. Late last year that rumor swirled but  instead Amazon partnered with Target.


Now, a store like Macy’s is this strange anachronism for a kind of retail that is so irrelevant that it feels almost quaint walking into one of its stores.


But nostalgia is no longer profitable in the age of the Internet and more than likely 2018 will mark a pivotable year for the aging giant. We’re watching.

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