Macy’s Inc.’s emerging but still small fleet of off-mall, specialized brick-and-mortar formats is set for growth and will contribute “a material level of volume over time.”
Additional Bloomie’s stores are in the works, though Macy’s Inc. executives have not specified how many. Bloomie’s, which launched last year with one unit in Alexandria, Va., offers contemporary and luxury brands, services, tech-enabled stylists, new store design concepts and a restaurant.
Market by Macy’s, with three units in Texas and two in Atlanta, will expand to additional markets. The specialty format has branded and private-label fashion, products from local designers and direct-to-consumer brands, food, an apothecary, plants, home items and a café.
“I will say very clearly that repositioning and optimizing the physical footprint is a must-win initiative for Macy’s to be relevant over the next 10 years,” Mitchell said.
One hundred sixty Macy department stores have “curated” assortments focused on customers under 40 and a diverse audience, and weighted toward certain brands such as Michael Kors, Steve Madden, Cotton On and private brands such as And Now This. Adjacencies have changed for better flow and navigation, and there’s cross-merchandising of brands.
In January, Macy’s closed six Macy’s mall stores and one Bloomingdale’s Outlet. In late 2019, Macy’s determined it would close 125 closures from 2020 to 2022. So far, about half of those have been closed. But as Macy’s chairman and chief executive officer Jeff Gennette said recently, “We have delayed most of the remaining closures we earmarked in 2019, in order to maintain a physical presence in many markets while we scale up our off-mall format stores. In addition to being a place for discovery and shopping, our stores are now also fulfillment hubs supporting our digital operations through buy online, pick up in store, curbside pickup and same-day delivery. Keeping these cash-positive stores open also helps to fund the investments we are making to reposition our fleet over the next several years.”
On the digital side, Macy’s and Bloomingdales’s are developing marketplaces this year, to offer consumers more products, more brands, more categories and greater depth in categories already carried.
Mitchell also said the company is scaling personalization, and that omnichannel shoppers spend 2.5 to 3.5 times more than single-channel customers, and shop 3 to 3.5 times more often.
“Digital sales per capita in markets where we have stores, even mall-based stores are three times more productive than markets that don’t have it,” Mitchell said. “So the notion of winning in omnichannel is also recognizing the critical importance of stores….We feel that we have to place our stores in more convenient locations.