Macy’s is in the process of rethinking its entire store business.
Recent moves emphasize this shift: at its most recent earnings, the company said it was focusing on opening more off-mall locations, a distinct shift from its place as a mall stalwart. According to Marc Mastronardi, Macy’s chief stores officer, this shift is a long-time coming and indicative of a longstanding strategy to rethink its stores and the way they operate.
The company’s strategy now, Mastronardi said, is “us defining it more explicitly for ourselves to now say: what does it take for us to be great at discovery, to be great at convenience, to be great at service and engagement?”
Mastronardi joined the Modern Retail Podcast this week and spoke about how he approaches his role. He spoke onstage at Shoptalk, held in Las Vegas, and afterward sat down to speak with Modern Retail. While this episode was recorded a day before Macy’s announced its CEO was stepping down, the theme of change was palpable throughout the conversation.
One of the big focuses for Mastronardi has been rethinking how store associates interface with the entire brand. The Macy’s of old was focused on specialization — an associate for menswear, another for bedding, etc. Now, Macy’s has shifted this to make most store associates generalists in all areas of the business (with the exception of very specialized departments like makeup, jewelry and furniture).
“We created a front-of-the-house team and a back-of-the-house team,” Mastronardi said. “And that front-of-the-house team now works the entire store on the front of the house. And you could work in many different areas on any given day, any given week.”
Meanwhile, Macy’s has been putting more focus in new store concepts. It currently has eight Market by Macy’s off-mall stores, which are located in what Mastronardi described as “power centers.” These are smaller stores with more curated assortment. And then idea is to target a different type of shopper — one who isn’t leisurely perusing a mall, but has more intent. “The customer shops at a different level of frequency in a power center,” he said.
Putting it all together, the focus is on rebuilding Macy’s by paying attention to where customers are and rethinking the role of the store associate. What’s more, Macy’s no longer thinks of e-commerce and in-store as separate entities — a strategy very different from competitors like Saks.
“There is not a store customer and a Macy’s dot com customer in this market,” he said. There’s a Macy’s customer. And sometimes they use their store and sometimes they’re online.”
Here are a few highlights from the conversation, which have been lightly edited for clarity.
Making store associates generalists
“If you were with us a year and a half ago and you came into a store — both mall-based but appropriate for off-mall — you would have had a lot of colleagues with a high level of specialization. They were discipline experts of their category, their area. That’s what they knew, and that’s where we staffed them. We made a change a year ago to say, we need to be more available for when the customer needs us. And we recognize that the operating side of the business, it changes — it’s very different every day. We do enormous amounts of fulfillment out of our stores for our digital business, things like that. And so some of that is less predictable. And so we need flexibility to be able to meet the customer where they need us. And so we created a front-of-the-house team and a back-of-the-house team. And that front-of-the-house team now works the entire store on the front of the house. And you could work in many different areas on any given day, any given week. And that is a meaningfully different experience for a colleague from what you were a year ago.”
The off-mall focus
“I do think of [off-mall locations as] wholly different [from mall locations]. Two-thirds of retail in America in the categories in which we sell happens off-mall. So, that is not to diminish the mall importance. But the customer shops at a different level of frequency in a power center. You know, they are in a grocery store and a much more regular level. So it was important for us to figure out how we could… if you’re not always coming to the mall, how am I bringing the product to you? And that’s sort of the impetus of what got us into our Market by Macy’s initiative.”
A combined in-store and e-commerce focus
“Coming through the pandemic, one of the major changes we made from a mindshare perspective was: there is not a store customer and a Macy’s dot com customer. In this market, there’s a Macy’s customer. And sometimes they use their store and sometimes they’re online. And it’s very situational. So we made a big change to the store population and said: You are in charge of customer experience for all the customers that are in your market. And that means that you have accountability to the store business and the digital business. And we’re able to segment the digital business by market and say you’re responsible for it, you are on the hook for taking care of the customer in your market. That’s what’s going to build market share. That’s what’s going to build repeat client base.”