Source: Bloomingdale’s
Bloomingdale’s looks to make more with less
Bloomingdale’s is going small in Seattle.
The department store retailer yesterday said it will open a new Bloomie’s, its small off-mall store concept, this year in University Village in the Ravenna neighborhood, north of the city’s downtown.
“We are thrilled to enter the Seattle market with the opening of our third Bloomie’s location,” Charles Anderson, Bloomingdale’s director of stores, said in a statement. “The new flexible store experience has been well-received in other cities as it remains authentic to the Bloomingdale’s brand yet brings a new and exciting energy to our shoppers. We can’t wait to be a part of the community and for the people of Seattle to be a part of the Bloomie’s story.”
Bloomingdale’s debuted its first Bloomie’s, which brings together top established designer labels from its full-line stores as well as emerging labels in beauty, fashion and accessories, in Fairfax, VA, in 2021. The Fairfax Bloomie’s measures 22,000 square feet.
It opened its second right before Thanksgiving in the Chicagoland market. Macy’s, Inc. CEO Jeff Gennette said on the company’s third quarter earnings call that the 50,000 square-foot Bloomies replaced a full-line Bloomingdale’s that measured 206,000 square feet.
The Bloomie’s locations receive multiple deliveries on a weekly basis to allow them to constantly refresh their selection and offer customers something new every time they walk into the store. The retailer is focused on combining its technological and human resources to deliver the superior service that its customers expect.
Stylists deployed in departments across the store are equipped with digital selling tools to help them find the right items for their customers in-store and elsewhere as needed. Bloomie’s fitting rooms have been set up to enable customers to request the assistance of stylists by pushing a button.
The small stores offer the same services as full-line Bloomingdale’s, including buy online for in-store or curbside pickup and easy returns via a dropbox. The stores provide alteration, customization and personalization services.
Mr. Gennette sees a significant upside for Bloomingdale’s, likely through its small store concept, as the chain currently operates locations in only 13 of the top 50 consumer markets in the U.S. Macy’s, by comparison, is in 49.
Bloomingdale’s posted a 4.1 percent year-over-year gain in same-store sales during the quarter and saw its active customer base grow by nine percent.
Discussion Questions
DISCUSSION QUESTIONS: Do you see the Bloomie’s concept as a smart way for Bloomingdale’s to scale its operations to new markets around the U.S.? What will be the keys to the concept’s success as it opens more stores?
Poll
Loading …BrainTrust
Jenn McMillen
Chief Accelerant at Incendio & Forbes Contributing Writer
Melissa Minkow
Director, Retail Strategy, CI&T
The Bloomie’s format should travel well, allowing the brand to expand into markets which can’t support a full-sized mall anchor. if Old Orchard (outside Chicago) found its full-sized Bloomingdale’s store unsustainable after many years, it tells you how many “A” malls around the country can handle the new concept.
That being said, there is a big difference between 20,000 and 50,000 square feet in terms of the need to curate. (And localization is just as critical.) A footprint that is too small simply won’t provide enough breadth of offering to be true to the Bloomingdale’s brand.
I’d start by looking at a competitor and take a page out of their playbook. How’s Nordstrom Local doing?
Bloomie’s is giving us the opportunity to watch the evolution of the retail model in real time. Smaller footprints plus digital attributes are surely the way of the future. Giant malls with 200,000 square foot anchors are truly relics of a bygone era. Some will survive but many will be re-rationalized. Bloomie’s is just the tip of the iceberg, along with Market by Macy’s. New real estate strategies are a bigger part of retail than they have been in a long time.
I love a small format store — sometimes less is more, and provides less risk of analysis paralysis for the consumer. The challenge will be curation and merchandising — needing to have the right balance of products when consumers expect “more is more” from department stores overall.
Bloomie’s should scale this concept — smaller and hyper-localized stores with stellar service. The challenge that I repeatedly have with Bloomingdale’s or it’s Bloomie’s stores is the merchandising strategy. There needs to be significant improvement in the product assortment across the board in order for the retailer to survive. The time is now.
Scaling Bloomie’s before streamlining private label and branded assortments as well as go-to-market strategies tells us the retailer is grasping at straws. And a new store format is not going to help Bloomingdale’s or Bloomie’s become profitable or trustworthy to the customer. Getting people into the store is one thing. Getting them shopping and coming back for more is another.
It seems that hyper-localized store assortment and presentation, media buying, event planning, and influencer relations is going to best be done by local ownership. Economies of scale don’t apply when you are producing short runs of “I Heart Wisconsin” wool sweaters and ironic cheddar cheese hats for a handful of stores — and out-of-state management is not going to make each store a vital part of its community to keep customers coming back.
(Subtext: like many Minnesotans, I want my Dayton’s back.)
Not all shopping can be virtualized. But there is a cost – financial and operational cost – to the big department store model. Despite many retailers cutting costs, reducing staff and service, until the shopping experience feels like a Big Box store, many shoppers still want a great shopping experience. Pampering customers is a competitive dimension where Bloomie’s has historically excelled. So adapting that to the current drivers and limitations of the industry makes complete sense. Rock on, Bloomingdale’s!
There are a couple standout benefits to the smaller format. Firstly, much lower rent or real estate expense. Second, they can actually afford to properly staff the store. Many department stores were too large and didn’t have enough employees across the floor to help customers. This will allow for a better customer to associate ratio.
A full line department store is extremely costly to run. It’s also complicated to locate and manage. There are some places where this works, but there are many where it doesn’t. As such, a smaller format gives Bloomingdale’s much more flexibility. It also accords with modern ways of shopping where an increasing number of consumers are looking for edited and curated choice. However editing — knowing what to leave in and take out — is a real skill that requires knowledge of customers and local preferences. That is often where retailers fall down.
The key to Bloomie’s is regular change in assortment, and emerging labels — not a subset of the larger Bloomingdale’s. This small format store if positioned properly can compete with the likes of TJX instead. They’ll have to focus on a different sort of customer and stay true to fast in-store turnover plus add in some exciting items and deals. The stylist services can support the model further. Though it is nothing like its small store counterparts in the industry nor based on mall-drive, this is still luxury. Convenience and high-end branding with a pinch of excitement from newness will drive it. I’d keep my eye on it to see if the model is working.
I shopped at the new Bloomie’s in Old Orchard, outside of Chicago last month. The assortment was very upscale in accessories, which were prominently displayed in the front (most handbags over $1,000, gloves starting at $80) with very youth oriented apparel brands towards the back. I didn’t get the feeling that I could shop for a wardrobe there (And I’m a Bloomingdale’s “Top of the list” customer.) I expected more digital connection to the full-line of apparel available in their larger formats, but there was none. A couple of personal shoppers from the old store said hello but did not ask what I might be looking for. They were standing around as if they were part of the displays. There was minimal service and long lines at the one cash wrap desk that was open. In fact it took about an hour to get some gift transactions right as the receipts were mangled from the POS system. I’ve heard from affluent teenagers who frequent the mall that it’s cool.
The new Bloomingdale’s in Chicago is 51,000 square feet, that’s not exactly small. Small is the New Black was the big trend the last couple of years, yet we don’t hear much about the new smaller stores that have opened.
I’m with Jenn: how is Nordstrom Local doing? And what about The Market by Macy’s? We haven’t heard much about that store since Rachel Shechtman left. What really makes these smaller footprints special?
You bring up — obliquely — a topic I love to harp on: what benefit, if any does Bloomingdales get by being owned by Macy’s? Size, perhaps — even if only it prevents them being pursued by “activist investors” — but one can’t help but wonder about the smothering effect of essentially being someone’s little brother.
Good point. There aren’t many Bloomingdale’s stores that are convenient to visit near me. I wonder if they have kept their uniqueness or if they have adopted more of a Macy’s look. I’ll be in New York for NRF and I am planning a day to visit stores. Bloomingdale’s is on my list.
Downsizing to achieve a higher profit on a per square foot basis, reducing overhead expense and taking advantage of available retail space are all brilliant moves. Just do more with less — that is the mantra as it relates to retail space optimization.
Bloomnigdale’s already operates in the top 50 markets: it’s called online shopping.
As for the actual stores, we’ve been down this road before and I’m no more enthusiastic in ’23 than I was in ’22 (or ’21 ’01 or…). The cold, hard truth is, it just doesn’t do that well outside its home market (maybe Florida, which I see as a suburb of NYC, so really the same thing). The small stores aren’t so much a solution to this problem as a result of it: the demand just isn’t there.
I believe there is a great opportunity as retailers and brands move off-mall and shift towards community centers. Since more people are moving to cities, establishing stores in these areas will help brands build long-term relationships with customers. Bloomingdale’s new concept “Bloomie’s,” in my opinion, will be a success. Additionally, stocking new styles every week will let customers stay up to date on the latest trends. As a result, I’m optimistic about Bloomingdale’s smaller off-mall locations.