BrainTrust Query: Note to Macy's - You Are the Company You Keep
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.
Retail is in a state of historic upheaval and nowhere is this more evident than in the department store channel. Virtually every major department store chain is experimenting with initiatives, strategies and tactics to find some light in what has become the very dark tunnel of the current retail market.
In late May, for example, Macy's announced that it will be opening a new store outside Chicago. What makes this particular store newsworthy, however, is that it will be located in a discount/outlet mall -- something that has been out of the question for Macy's. While they are no strangers to sales and promotions, Macy's has until now steadfastly resisted the lure of the discount mall.
But here's what I found particularly interesting; Macy's says that while the location is indeed in a discount mall, the store will not be a discount store. They intend to sell the full-line of regularly priced goods that you'd find in any other Macy's location. In fact, according to Macy's spokespeople, the company views this opening merely as an opportunity to close a gap in their store coverage. No big deal.
Someone once said, "Companies are not the owners of their brands, only the custodians." In the end, it's the customer who determines what the brand stands for and represents. In other words, the customer owns your brand.
Customers really don't care about your comparable store growth, profit percentages, store coverage or anything else that often drives strategic brand planning. They care about the essence of the brand itself. They care about the promise the brand makes to them and whether or not that promise is kept.
Whether Macy's cares to admit it or not, the decision to proximate with discount retailers makes them (at least in the consumer's mind) a discount brand. It shifts, ever so slightly the axis of the business and potentially sets it off into a new orbit.
So, if this is a one-off move, one really has to question the logic. Why put the brand at risk for the revenue potential of one store?
My guess is that what we're really witnessing is the thin edge of the wedge on a new and decidedly different Macy's brand strategy -- one that could prove treacherous, to say the least.