Jeff Gennette is looking to Story founder Rachel Shechtman to bring a whole new energy to the retail experience at Macy’s.
On Wednesday, Macy’s Inc. revealed that it had purchased Story, the New York-based concept store founded by Shechtman, who will join the department store in the newly created position of brand experience officer. She will report to Hal Lawton, president of Macy’s. Terms were not disclosed.
In this new position, Shechtman will focus on ways to enhance the in-store customer experience at Macy’s and work to integrate Story into the company “in a new format,” Macy’s said.
Story offers a storytelling retail model similar to that of a magazine and the design and merchandise mix is reinvented every six to eight weeks.
In an interview, Gennette, Macy’s chairman and chief executive officer, said that exactly how Story will be incorporated into the company is still in the planning stages, but he expects Shechtman to have an impact in a number of areas — from e-commerce and online activations to in-store experiences. He also didn’t rule out opening other Story stores around the country. “We haven’t ruled anything out,” he said. “Everything is up for conversation. We believe in this concept and believe it can be exported.”
Gennette said his decision to purchase Story “really started with understanding the state of retail right now.” To be a healthy omnichannel retailer today requires a combination of sophisticated and engaging e-commerce and mobile platforms in addition to a strong brick-and-mortar presence, “and it’s no surprise that brick-and-mortar has been challenging for Macy’s,” he said.
After struggling for several quarters, the company reported in February that net profit in the fourth quarter rose to $1.33 billion, versus $475 million in the year-ago period, on a sales gain of 1.8 percent to $8.7 billion. For the first time in three years, comparable store sales rose in the period, increasing 1.4 percent.
Gennette said that, in the end, success in retail today boils down to enhancing the customer experience by providing a sense of discovery and “an opportunity to educate and entertain. That’s the reality we’ve been grappling with.”
After meeting Shechtman at a Macy’s-sponsored event for women-owned businesses a few years ago, Gennette was impressed.
“She has amazing ideas, a tremendous imagination and fresh, amazing product,” he said. “And she knows a lot of highly creative people.” He hopes to replicate the “alchemy” that she has created at her 2,000-square-foot Tenth Avenue and 19th Street location within Macy’s. “We thought, what could that mean if we helped her scale,” he said. “And if she came into our company, how could she help us do other things. This is the right thing for our customer.”
He said that while he doesn’t expect Story to be installed in all of Macy’s nearly 700 stores, there will undoubtedly be some sort of “in-store component” at a number of top locations. “We have gigantic stores,” he said, and space can easily be carved out to devote to a Story concept.
Nordstrom has found success in recent years with its rotating assortments of “pop-in shops,” spearheaded by Olivia Kim, vice president of creative projects, who joined the retailer in 2015.
At Macy’s, Gennette said there “may also be an application online” for the Story concept.
A second “bucket” that Shechtman with be tackling, he said, involves integrating marketing and merchandising initiatives across all channels. “You can see what she’s done with Target and Neiman Marcus, and Macy’s is the place for occasions such as Mother’s Day, Father’s Day. She’ll have her fingerprints in that.”
Shechtman collaborated with Target on a holiday promotion in 2014 and with Neiman Marcus on a retro experience in 2016.
Gennette said the “last bucket” that Shechtman will oversee will be “the opportunity for education.” He said she will work with the company’s merchants on curation and will train a whole new fleet of buyers on how to select an assortment that addresses the needs of today’s shoppers.
Shechtman said that over the past 6.5 years Story has provided a “living lab” that has looked “under the hood” of some enormous companies to see how they work and how that could be improved. “And it’s that interest that led me down this path. Imagine the impact we could have at scale by looking at and identifying opportunities and developing new business models from both a revenue and customer standpoint.”
She said taking her learnings and applying them to Macy’s is like Story “on steroids.”
Shechtman said that by joining forces with Macy’s, Story will now have “have a national stage” to leverage its “learnings and relationships to create impact at scale. I’m energized by the opportunity to further build new customer experiences across the Macy’s portfolio, while also continuing to pursue new business models and brand partnerships.”
Story’s operating model is different from Macy’s, however, and involves having the brands she works with sponsor the content within the store.
Gennette said Macy’s works with sponsors on a larger, more national level, such as during its annual flower show or for its Fourth of July and Thanksgiving Day parades. And he said he was open to exploring other and all ideas and experiences on this front.
“We didn’t buy this to keep it as just one store on Tenth Avenue,” he said. “We see a broader concept.”
Under the terms of the deal, the Story retail store in Chelsea will continue to operate in its original location. In addition, the company’s chief operating officer, Jenny Shechtman, will assume the role of vice president, operations at Story under Macy’s, Inc.’s umbrella.
Rachel Shechtman has more than 10 years of entrepreneurial and brand consulting experience and in 2003, founded Cube Ventures, a retail and marketing consultancy whose clients included Toms, Kraft Foods, the Council of Fashion Designers of America, Gilt, Gap and others. She opened Story in 2011.