NEW YORK — In 2012, Macy’s set an ambitious goal: to attract a younger Millennial customer. This group, which is estimated to have spending power of $65 billion annually for product at Macy’s level, has traditionally eschewed department stores in favor of specialty retailers.
Over the past three years, the retailer has added brands and revamped its in-store merchandising to specifically target that customer.
Its most dramatic statement came last week when the lower level on the Broadway side of the Herald Square flagship was unveiled as One Below, Macy’s Millennial floor for juniors. Formerly home to the Cellar, whose housewares have moved to the eighth floor, the space is about 53,000 square feet. In the past, juniors was housed on the fourth floor of the Broadway building.
This move is part of Macy’s four-year, $400 million renovation of the New York City flagship, a project that is finally slated to be completed in November.
“This huge Millennial destination was years in the making,” said Tim Baxter, the retailer’s chief merchandising officer. “We are attracting a younger customer and that’s our mission. We have gained market share every year since 2012 and are expecting that to continue to grow by creating a destination like One Below.”
Baxter called the new Millennial floor “an entirely new experience that blends technology with fashion and food. The Millennial customer loves and seeks out experiences.”
This initiative will be felt chainwide. Baxter said the company looks at Herald Square as “an incubator,” and the lessons learned here will be “applied to as many destinations as we can” outside of New York.
One Below brings together some of the store’s most popular juniors brands in apparel, accessories and beauty and mixes them with some department store firsts, such as a wearable tech shop and a 3-D printing area.
“We want the whole floor to be young and Millennial with our handbags and accessories,” said Marc Mastronardi, executive vice president and general merchandise manager of center core at Macy’s. “But the other piece that is relevant is technology.”
A centerpiece is the first department store shop to sell Samsung wearable technology. It currently offers its Gear Fit watch and the Gear S2 version is set to hit floors next month. The Samsung merchandise is complemented by a build-your-own-watch area from Fossil where customers can choose their faces and straps and have the watch engraved in minutes.
“Personalization and customization are a touchpoint for Millennials,” Mastronardi said. “And this is the home for connected tech watches.”
Nearby is another first — a 3-D printing lifestyle shop. Macy’s has partnered with 3D Systems/Cubify to sell jewelry and accessories such as shoes and iPhone cases that have been created using that method. “The level of intricacy can only be achieved with a 3-D printer,” Mastronardi said.
Coming soon will be an interactive photo booth where customers can have their picture taken and then printed onto a figurine of their choice within two weeks. The shop also sells the printer for $1,000.
The rest of the accessories area includes “brands and products that are important to this customer,” he said, pointing to the Kipling backpacks, Calvin Klein and Tommy Hilfiger activewear, Hue and INC International Concepts leggings, Betsey Johnson bags, and “a lot of trend merchandise,” such as fur, fringe, ponchos and blanket wraps.
Mastronardi said that in many cases, the brands here are carried elsewhere in the store, but labels including LeSportsac, Vera Bradley and the Calvin Klein activewear are only offered on One Below. Even if the brands are the same, the assortment is different and targeted specifically to the younger shopper.
“She can come down here and be in her own environment,” said Louis Mastrogiacomo, executive vice president and general merchandise manager of ready-to-wear/millennial. “They love to shop, but it has to be an easy experience. We know there’s a lot of competition, but we want to be the fashion headquarters for this age group.”
Macy’s defines Millennials as customers between the ages of 13 and 22, which it targets with its Mstylelab initiative. Historically, these young people don’t choose department stores, but Mastrogiacomo said as Macy’s “becomes more credible, they realize that we’re the place to shop. We take this very seriously and we know that it has to be cool or she’s not going to shop here.”
Product is the centerpiece of this strategy.
In apparel, the anchor of the floor is the American Rag boutique, which spans about 3,700 square feet. “That’s our biggest brand in this world,” he said of the exclusive label.
American Rag is positioned next to Material Girl, another Macy’s exclusive that resulted from its tie-up with Madonna. This assortment is “faster” than American Rag, Mastrogiacomo said, and an activewear component was recently added, which he said is performing well.
There is a Jessica Simpson shop, as well as an area devoted to BCBGeneration.
Denim, which is “very important,” has a large presence and includes a Levi’s shop — the second in the store — selling the brand’s upgraded Seven Series.
Other vendors include Roxy and Volcom, West Coast surf brands, which also offer some exclusive New York-centric pieces. There are areas with more “polished sportswear” from BCX and XOXO and a classification area with key items such as plaid shirts, dusters and the latest “Star Wars” merchandise. This is adjacent to a Marilyn Monroe shop — “Millennials are intrigued by her,” he said.
There is a separate dress department as well. “They’re really into Valentine’s Day, prom, homecoming,” he said, “so we created a world of dresses.”
A sitting area provides free Wi-Fi and electrical outlets where customers can relax and browse on their mobile devices while in the store. There is an interactive screen on the back of that area as well, with a touchscreen so they can see what other girls are saying on social media.
“It’s all about getting and keeping them here,” Mastrogiacomo said.
That’s also a goal of the dedicated beauty area, which is anchored by MAC, Benefit and Clinique. A blow-dry bar will be added shortly.
“We’ve customized the presentation for the younger shopper,” said Muriel Gonzalez, executive vice president and general merchandise manager of cosmetics, fragrances and shoes. “Our cosmetics floor is beautiful, luxurious and serious, but we wanted to create playfulness.”
These brands were chosen because they’re popular with young girls and do enough volume with Macy’s to “warrant a second or third location in the building,” Gonzalez said.
The shops not only sell cosmetics, but also provide makeup lessons, brow shaping and other beauty services.
Capping off the floor is the footwear selection, which sells a variety of brands offering styles such as sneakers, booties, pointed flats and other on-trend items.
“What we’ve created allows the younger client to stay on this floor and find everything she wants,” Gonzalez said.