…. by overhauling its website and retraining employees to grow business – with current Customers and attract new customers interested in fashion trends.
The retailer’s goal is to offer a more customized shopping experience, with one-on-one attention from staff in stores and easy to use online tools. This is important for Macy’s to better compete against retail rivals — from department store competitors, boutique clothing shops, online-only fashion players that specialize in offering style advice. In addition, Macy’s is moving forward on initiatives to build on the significant investment in its digital presence and social media strategy to better articulate how Macy’s is distinct from other retailers.
In conjunction with this there is a branding rollout, under a new motto, “ Own Your Style ” in the stores and online. “ What we were looking for was sort of a unifying customer truth” said Rich Lennox, Macy’s chief brand officer “ because we want to acquire younger customers as well as look after our older and high-value customers.” With this, there is a personalized website landing page for online shoppers based on their buying history as well as an upgraded dashboard showing loyalty members how many rewards points they’ve accumulated plus upcoming orders and unique style recommendations. Further, there is an elevated digital experience with simplified global navigation, a refreshed modern search bar, and a personalized customer dashboard.
In addition, Macy’s is training their associates to assist people one-on-one with style choices – with selected employees being enlisted into the “ Macy’s Style Crew ” group. To incentivize people and make innovation more rewarding, Macy’s associates will be paid a commission on their sales as well as their participation in the program and their social media posts that generates new business.
Further, the store employees dress code is being loosened so that staff can incorporate their own personal style choices into what they wear every day. This is in contrast to Macy’s historic dress code of business casual. Now, under the new branding initiative, clothing choices will vary based on an employee’s responsibilities. For example, an Associate in the general selling area can choose a more casual look, with their favorite jeans and sneakers, while a staff member in jewelry might wear a blazer with flashy accessories.
Extending on this, Macy’s is introducing digital screens in stores that display rotating style tips and outfit inspiration for shoppers – who can then find those same clothing items and accessories for purchase nearby.
The changes fold into a broader three-year plan for Macy’s, announced in February 2020 named Polaris, to accelerate digital growth, close underperforming locations, and investing in its best stores – to increase brand appeal and value as well as to relevance, revenue, profit, etc. Though some progress was stalled due to the Covid pandemic, Chief Executive Jeff Gennette said that Macy’s is a more digitally led business now than in the past. An example of this is the launching of a digital marketplace where third-parties can market their goods so Macy’s is better positioned to compete against Amazon or Etsy.
For comparison purposes, Macy’s digital sales represented 35% of net sales for the year ended Jan. 30, 2021 compared to Nordstrom’s 42 % of net sales and Kohl’s 32 % of total revenue. Given the competition, changing business landscape, and rising User expectations, the need is to meaningfully innovate to improve outcomes by delivering new value, providing more personalized services to Customers, expand digital capabilities, etc. – and build on Macy’s net sales of $24.5 B in fiscal 2021.
As noted by industry analysts with the push into personal styling, Macy’s is better positioning itself as a bigger rival to a company like Stitch Fix, which curates boxes of clothing based on a customer’s taste and brand preferences. And with Nordstrom known for the extra attention to customer service and one-on-one fashion advice, it’s a differentiator that increases Customer stickiness and something that other high-end chains such as Saks Fifth Avenue and Bloomingdale’s (which Macy’s owns) go the extra mile for.
Like many organizations facing challenges associated with the changing business landscape, rising Customer expectations, supply chain disruptions, etc. this is an example of corporate innovation to enable Macy’s to be a destination for people who are looking for new looks as we socialize more, head back to the office, travel more, etc.
This is summarized by Lennox who indicated – “ Our business model is built on having a great selection of brands where we can position ourselves within this style-help territory. That’s what Macy’s has always done very well, and we’re going to get much better at doing it.”
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March 23, 2022 CAIL Innovation commentary 905-940-9000 info@cail.com www.cail.com/BI