Dive Brief:

• In the midst of store closings, Macy’s is also right-sizing merchandising, offering fewer discounts and more turnover in key apparel categories, according to research from fashion data-analytics firm Edited. The average price of an apparel item is $79.20, and the rate of discounts fell 9.8% from the fourth quarter 2016 to Q4 2017, Edited found.

• Macy’s also replenished apparel at a higher rate than its peers, indicating a better turnaround of stock, according to the report. In Q4 2017, Macy’s replenished 7.4% of new arrivals compared to Saks Fifth Avenue (6.1%), Lord & Taylor (5.3%), Nordstrom (4.8%) and Neiman Marcus (2.2%).

• Macy’s activewear offerings are up 15% and Nike specifically grew 44.9%, which Edited Retail Analysis & Insights Director Katie Smith said shows "Macy’s acute awareness of top brand performers within the persistent activewear trend." Macy’s also increased plus-size apparel lines by 20.4% while discounting them 7.4% less than competitors.

Dive Insight:

There is no way for Macy’s to prevent the loss of some market share as it continues to add to the list of 124 stores that have shuttered since 2015. Last month, the iconic department store announced the closure of another 11 locations, (only four of which had been previously disclosed). 

Only struggling Sears has seen a comparable decline in sector share, according to data from Euromonitor International cited by think tank Coresight Research, which recently found that not just Amazon, but also off-price retailers and mass merchants like Target and Walmart are taking a piece of the pie. It's been "death by a thousand cuts," Lee Peterson, EVP of brand strategy & design at design firm WD Partners, told Retail Dive on Wednesday, noting that Macy's has struggled to attract younger customers and is losing older ones. "Macy’s hasn’t done a good job determining what people want — that doesn’t help," he also said.

Edited has uncovered evidence that Macy's has begun to reverse that, at least in some key apparel categories. "Thanks to Macy’s insightful apparel strategy, it has been able to keep prices consistent and rely less on discounting to appeal to a broad range of consumers," Smith said in an email to Retail Dive. "Overall, a winning approach.”  

The company is doing best in women's categories, which appear to be benefiting from moves like its inclusive clothing line and new pop-up concept The Market, according to Edited's report. Compared to a year ago, Macy's online womenswear inventory was less than its menswear (which was up 18%) and kidswear (up 42%), according to Smith. "That runs counter to Amazon’s strategy, which is to cover a ever-broader range of customers and categories with little overhauled in the shopping experience," she also said.

Which is the wiser approach? "It’ll be interesting to see how the two play out," she added.

The department store is beating rivals to the punch in sub-categories like maternity and plus size, Edited also found. The plus-size market in particular is a key category, accounting for 17% of the U.S. women’s apparel market in 2015, according to market research company NPD Group’s Consumer Tracking Service. U.S. sales of women’s plus-size apparel, which includes plus-size/full-figure, petite plus and junior plus sizes, rose 5% in the 12 months ending February 2015 to $19.8 billion, and 3% in the 12 months ending February 2016 to $20.4 billion, NPD found.

Edited found Macy's meeting that need, with plus sizes constituting 9.5% of their entire womenswear range. And maternity at Macy's now constitutes 3.7% of their entire womenswear range, up by 34.6% over the last year. Edited calls that increase "a smart move," in light of Macy's ability to hold the line on margins; just 6.9% of its maternity merchandise was discounted below 50%, Edited found.

"Our data around the retailer's activewear and plus size assortments suggests that Macy’s is being more analytical about their next moves," Smith said. "The strategy hasn’t yet fully kicked into action, but the focus is on tightening up assortment relevant to the consumer and improving the experience in store."