What We Can Learn From Macy's

Macy's is struggling. The giant retailer that owns Macy's and Bloomingdales plans to shutter 100 underperforming stores, its 2016 sales fell by 4.8% and revenue predictions for 2017 call for more of the same.  On the upside for Macy's is its online sales experienced double digit growth last year, but that's not where Macy's is focusing all of its attention.  In its fourth quarter earnings call, company CEO Terry Lundgren pointed out that 90% of Macy's sales still take place in a brick and mortar store.  The company's future, according to the CEO, is tied to improving in-store customer experience.  Here are several of the changes that Macy's outlined to improve customer experiences.

 

• Macy's will expand its private label and exclusive brand offerings from fashion houses that include Tommy Hilfiger, Rachel Roy, Hugo Boss and Kipling and which currently represent 20% of apparel sales.
• Macy's private label brands such as Bar III represent another 20% of sales.
• The company will separate sale items from full priced items.  Sale priced items will be displayed in a separate clearance section to avoid compromising the margins of regularly priced merchandise. 
• The company wants to move away from excessive discounting that has caused Coach and Michael Kors to pull their handbags out of Macy's.
• Macy's plans to reinvest in higher-quality, more expensive products and reduce its footprint in product categories that are underperforming.
• Macy's plans to reformat stores in high net-worth demographics and partner with top-tier shopping center owners that could result in a hybrid department store that includes entertainment, dining and shopping experiences all within the store.

 

What are the lessons for decorative plumbing and hardware showrooms?  Customers expect more.  They want to feel good about their in-store experience.  If you have sale merchandise, create a separate space in your showroom so it does not compromise full-price offerings.  Less could be more.  Evaluate the performance of each of your lines and product categories.  Determine which ones are most profitable and emphasize those while reducing your footprint with products and categories that are underperforming. 

 

Walk your showroom through your customer's lens.  What do you see?  What changes can you make to the physical environment that would improve the customer experience?