Macy's and b8ta partner to grow new concept shops
Macy's on Tuesday announced a partnership and minority stake (for an undisclosed amount) in b8ta, a retail concept firm that leverages store design and data to rethink the retail experience, according to a company press release.
Macy's will employ the company's software platform to scale its new pop-up concept, The Market @ Macy's, which launched in February. Over the next year, The Market @ Macy's will test new size format spaces powered by b8ta's technology and will expand the size of some of the existing pilot locations, the company also said.
That pop-up effort already resembles the approach of New York City's Story, which the department store acquired last month for an undisclosed amount. As part of that deal, Story founder and CEO Rachel Shechtman joined Macy's as "brand experience officer."
Macy's has long kept on top of technologies to drive its e-commerce and fulfillment operations, but these two investments mark a new chapter in its retail playbook.
B8ta, which opened its first store two years ago and has opened more than 80 since, should help Macy's scale The Market @ Macy's concept faster by customizing its platform for Macy's and making it easier for brands to participate, along with furthering the company's goal of bringing more excitement and fresh experiences into stores, Macy's President Hal Lawton said in a statement.
B8ta's particular prowess in the home and consumer electronics space could also provide an opportunity to bring new product categories to select Macy's stores, which in recent decades has ceded market share of beauty, electronics and home goods to specialty players.
The department store is at the tail-end of a colossal wind-down of its once massive brick-and-mortar footprint and may be ready to embark on the kind of approach to retail that Doug Stephens, retail futurist and author, advocated to Macy's executives in recent months.
"The argument I made in my book and later in a presentation to Macy's leadership was that if one were to apply the models for revenue that both Story and b8ta were using to drive their respective success, the chain could not only create decidedly more interesting and memorable experiences for consumers but also enjoy a potentially exponential increase in revenues — and without the need for additional inventory!" he said in an email to Retail Dive on Tuesday. "Once Macy's began to free itself from the tyranny of sales and profit per square foot of floor space and instead began to create and measure 'experiences per square foot,' their stores could become the most powerful media channel they have at their disposal, driving sales and customer advocacy across channels."
That investment in experience is all-important to any retailer that wants to avoid driving sales and traffic through discounts alone, according to Maya Mikhailov, co-founder and CMO of GPShopper. "What you're seeing is a proliferation of technology around physical in-store experience analytics and point-of-sales that are all converging with the customer's mobile device," she said in an interview. "Macy's is becoming more sophisticated with digital technology. They were always sophisticated, and this is a smart evolution."
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