NEW YORK — Macy's is kicking its transformation up a notch with yet more curated partnerships and technology investments aimed at offering more categories, consolidating space and driving store traffic.
"We're going back to the way department stores used to be — the services they used to provide," Macy's CEO Jeff Gennette told an audience of retail executives at Recode's Code Commerce on Monday.
Ahead of the critical holiday season, the department store retailer is rolling out a number of new experiential concepts. For one, it's partnering with Facebook to launch The Market @ Macy's — a "retail as a service" model that will curate 150 e-commerce brands on a two-week rotation at nine Macy's stores this holiday season. The assortment will range from apparel, accessories and beauty to home decor, technology and more.
For Macy's, the idea is a way to fill excess storage space while earning a little rent money. For small digital brands, it's an opportunity to learn how customers interact with their products in a brick-and-mortar setting.
"We're using it as a laboratory," Gennette said. "Brands are using it as a laboratory and customers interact with those brands and that's good for them, but it could also lead to a much longer relationship based on how well it's doing."
The company is also making a big bet on virtual reality to boost its furniture sales. Macy's is working with Marxent to scale a VR experience from its pilot of two stores to 69 by the end of November. "We've been constrained by not having enough square footage," Gennette said regarding its furniture spaces, adding that VR is allowing the company in just 5,000 square feet to do what it would normally have needed 20,000 square feet to showcase. So far, the technology is helping boost basket sizes by 60% and the return rate of goods is "virtually nothing," Gennette said.
He's also eager to reclaim Macy's reputation as a beauty mainstay, although it has a long way to go. He acknowledged that the department store retailer is still in the "early stages of being a relevant beauty house." Technology may help it get there. In 50 stores nationwide, customers can now digitally try on over 250 beauty products through in-store kiosks powered by virtual mirror technology, the company also announced Monday.
While all different, all of these services together show that retailers can no longer take a monolithic approach to brick and mortar, Gennette said, adding that today's stores need to be hyperlocal, easy and efficient. Next year, customers can also expect Rachel Shechtman's much-hyped Story concept — which Macy's acquired earlier this year — to roll out to Macy's stores.
"Market or Story or fill in the blank are going into great spots, so there are major arteries in any department store and on that main level we do have a lot of traffic," Gennette said.
It's been a year of transformation for Macy's, and the strategies that have drawn in more customers have in other ways helped boost morale and reduce turnover, he said, adding that he has focused on reducing barriers in departments, creating flexibility and executing better.