Whether it’s a platform for the next act in retail operations or a slide into the discount store format, Macy’s strategy to turn its shoe departments into self-service areas might be a signal that the department store concept is losing its soul.
The chain, following tests of self-serve shoe departments in California and southwestern U.S., announced it is expanding the concept to all of its roughly 670 Macy’s locations by August. In doing so, it takes a big step toward changing its identity.
Some retail observers describe that new identity as one of a discount chain like T.J. Maxx, which is a help-yourself retailer. But based on another of Macy’s key strategies — to continue bulking up its exclusive merchandise mix — the storied department store chain may be moving more toward a Target store model.
Either way, it is uncertain if Macy’s efforts will distinguish it from these rivals, or blend it in with them. What is certain is the self-service tests performed well, producing “a nearly double-digit shoe sales increase in the first quarter, well above the shoe sales trend for the rest of the stores,” Chief Financial Officer Karen Hoguet told analysts during a recent conference call.
‘Leave Me Alone’
The help-yourself strategy, which Macy’s has said will make shoe shopping “less of a hassle,” is designed so shoppers can skip sales associates and try on their sandals, loafers and lace-ups on their own. According to Macy’s, shoppers prefer this option.
“Lots (of shoppers) just say, ‘Leave me alone, let me get the shoe I want and move on,’” Hoguet said in an earlier conference with investors, according to the Chicago Tribune.
This may be true, but if shoppers prefer to fetch their own shoes and beauty products (another self-service area in test), they could feasibly expect the same in the few departments where a sales associate is still required.
And if they do, the only feature separating Macy’s from other retailers will be its expanding mix of exclusive brands. Macy’s has been a leader in this strategy for decades, with private labels such as INC and third-party special agreements, including a new partnership with DKNY, for which Macy’s will become the exclusive U.S. retailer.
Making a Hybrid Store
An exclusive brand portfolio does not necessarily prevent Macy’s from acting like a discounter, however. Some believe the self-service model, combined with competitive prices, are enough to indicate Macy’s is heading straight toward value-chain territory.
“Macy’s is realizing that the traditional department store model is crumbling, and it needs to become more like a discount store to stay competitive,” reports Business Insider.
But is it that simple? Discount stores cover broad territory, after all. If Macy’s chooses to adopt the T.J. Maxx or outlet store model, it may only have to cut prices and employee service to appeal to shoppers. However, with consumers increasingly combining trips, this might not be enough. Enter the Target model.
Envision a Macy’s that displays Tide detergent alongside its (exclusive) wash-and-wear apparel, or Palmolive with the dishware. Perhaps there would be a pharmacy or wellness center in the back, not far from the carryout healthy snacks. (Already, Macy’s operates mammogram clinics at some locations.)
The lines between retail segments will blur further, but perhaps this is what shoppers want — today. Perhaps Hoguet is correct in her characterization of retail as embodied by shoppers who do not want the hassle of employee interference.
There are other shoppers, though.
Left out of this discussion are the preferences of those who prefer to be waited on. Shoppers like a friend who recently visited the REI flagship store in Denver, Colorado, seeking hiking boots.
“An associate literally spent hours with the two of us making sure we each found the perfect shoes,” she said. “And they’re returnable for a full year regardless of how much they are used. Guess where I’d prefer to shop in the future?”
Asked what she thought of Macy’s self-service shoe departments, she said, “I read about (them) this morning and my first thought was that I would never buy shoes at Macy’s again.”
That’s just one person, but the challenge is clear. At a time when selling soles may mean selling its soul, the department store industry’s success depends on some very fancy footing.