Macy's on Friday will open its second Market by Macy's location, a smaller format (about 20,000 square feet) in an off-mall strip center that is part of a real estate strategy unveiled last February.
The store in the WestBend lifestyle shopping center is in the Dallas-Fort Worth area, as is the first, in Southlake, Texas. The company said it "maximized learnings" from that one, which opened almost a year ago, "to create a scalable store format."
These stores are merchandised with "an edit of brands and items available at full-line Macy's stores" tagged with "a range of accessible prices," according to an emailed press release.
Macy's is joining department stores Dillard's, J.C. Penney, Kohl's and Belk in shifting its attention away from sprawling stores in the traditional mall and toward smaller ones in strip-style centers that offer more convenient parking.
Stepped up convenience shows up elsewhere as well. The new store will have full and self-service checkouts as well as BOPIS services and same-day delivery with DoorDash, Macy's said. With most U.S. consumers pressed for both time and money, all these retailers are following their customers. The smaller size, off-mall location and reduced assortment make it a rational move, but execution is critical, according to GlobalData Managing Director Neil Saunders.
"The new format is sensible in that it creates a store that is suited to off-mall locations and has a much smaller footprint," Saunders said by email. "This is essentially where Macy's needs to pivot over the next few years. However, that alone is not enough to ensure the format works. The product assortment and range of services and how well these are differentiated from competitors is at the core of success."
That's where Macy's could be vulnerable. This a major departure, the efficacy of which remains unproven, and it's an open question whether the company is capable of the change needed to ensure it's successful, according to Saunders. "On this front, I have my doubts that Macy's is in the vanguard of innovation and it has some further work to do if it wants to succeed," Saunders said. "Like a lot of things with Macy's, the strategy is too little too late and is somewhat underwhelming."
Plus, while Kohl's seemed to escape many retailers' pre-pandemic woes, which many analysts attributed to its superior location, that company is also faltering these days. That makes Kohl's a dubious example to emulate, Saunders warned. "Moreover, Macy's has moved very slowly on this initiative and needs to be much bolder in its ambitions," Saunders also said.