Macy's on Herald Square in ManhattanMacy's on Herald Square in Manhattan, New York, America - 07 Jan 2016After a disappointing 2015, Macy's plans to restructure its business and eliminate more than 4,500 positions. The retailer announced the locations of 36 stores closing across the U.S.

NEW YORK — Macy’s may be able to trace its roots to 1858, but it’s working diligently to continue to be relevant in today’s ever-changing retail environment.

Whether that translates into installing pop-up concepts within its stores, creating a separate off-price option or bolstering its supply chain to enhance efficiency, the department store retailer is making bold moves to ensure its future viability.

In a presentation at inaugural Lead Assembly, a business created by Timo Weiland and technology entrepreneur Noah Gellman that bridges the gap between Silicon Valley venture-capital-based start-ups and fashion industry firms, Macy’s Marc Mastronardi outlined the steps the retailer is taking to break out of the traditional retail box.

As executive vice president of new business development and innovation at Macy’s, Mastronardi oversees a division that is intended to innovate and disrupt the retail space. It was established 18 months ago.

“The general outlook for retail is not overly rosy,” he said during the keynote address at the event at Cadillac House. But there are a number of retailers who are having a lot of success and Macy’s hopes to emulate that success.

The competition for the consumer dollar continues to escalate, he said, which is actually a good thing because it is sparking new ideas and forcing everyone to “raise their game.”

And while bricks-and-mortar continues to be challenged, there is “outsize growth on the digital front.”

As a result, today’s traditional department store experience needs to change because it is “not aligned to consumer expectations.”

So with the full support of new chief executive officer Jeff Gennette and his team, the innovation team set out to explore where others are finding success and carve out a distinct path for Macy’s.

Mastronardi said that among the brightest spots in retail have been the off-price space, which Macy’s answered by developing its Backstage concept; e-commerce, which it embraces through its successful web site; fast-fashion, which it addresses by enhancing the speed within its supply chain, and strong brands, which he said have long been a hallmark of the retailer.

Even so, consumers are clamoring for change and the role of the innovation team at Macy’s is to unearth what they’re looking for today and deliver it.

Mastronardi said the team found that direct-to-consumer brands were popular with shoppers and that led to the creation of The Market @ Macy’s. In February, the department store opened a group of pop-up shops in 10 locations where vendors paid a fee to participate and then kept all the proceeds from their sales. Among the brands that have participated are Lovepop, Sutra Beauty and Universal Studio, and Mastronardi said the concept was embraced by consumers who were seeking something innovative within a traditional department store space.

And just last week, the company acquired a minority equity stake in B8ta, a start-up that helps brands build out physical stores, that will provide back-end support for the Market @ Macy’s concept. “It allows us to build scale,” Mastronardi said.

This follows the acquisition last month of Story, a New York-based experiential retailer founded by Rachel Shechtman, who joined the company as brand experience officer.

Mastronardi also pointed out other opportunities for Macy’s, including furniture. With consumers more likely to be staying home, their living environments are gaining in importance and “furniture is an important part of the conversation” as well as “a differentiator for Macy’s.”

So it teamed up with Marxent, a leader in virtual reality for furniture retailers, where consumers can “drag and drop” their choices into their virtual homes, put on goggles and experience the company’s 3-D design and visualization planning tool. That test will be expanded to over 60 stores by early fall, he said.

Additionally, food continues to be a driver of consumer behavior and Macy’s will to expand its offerings in that arena as part of its Growth 50 initiative. That entails taking successful test concepts it has conducted at its Woodbridge, N.J., store and rolling them out to other units. The expanded food presentation will be added to 20 stores this year, Mastronardi said.

He said that Macy’s — and any other company seeking to remain relevant — needs to be willing to dedicate resources to discovering “what’s new, what’s next.” He said it requires thinking like a start-up and a certain comfort level with rapidly shifting priorities and change.

In addition to Mastronardi, the Lead Assembly also presented a panel discussion on digitally native, or direct-to-consumer brands, including Eloquii, Untuckit and Baublebar.

As start-ups — or in the case of Eloquii, a restart of a business that had been shuttered — the entrepreneurs experienced a lot of growing pains.

Aaron Sanandres, cofounder and chief executive officer of Untuckit, said the first four years of the company were “a mess,” until a retail veteran was hired to make sure the brand had the right product at the right time. “If you miss, you miss big,” he said.

Mariah Chase, chief executive officer of Eloquii, a plus-size women’s brand, said that in her former jobs in fashion, the designers and executives made the decision for the customers. But now, “the customers rule the roost.”

Daniella Yacobovsky, cofounder of Baublebar, a women’s jewelry brand, agreed. To be successful today, a brand needs to build community with its customers and offer an experience that proves you share the same values.

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