DISCUSSION

Will department stores regret their off-price push?

March 13, 2018Written by Bob Phibbs

Photo: Macy's

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Doctor’s blog. As more retailers follow the Macy’s Backstage, Nordstrom Rack and Kohl’s off-price model, expect more stores to become lands of misfit clothes. The momentum seems to be building. Last week, Macy’s indicated that it plans to expand Backstage to another hundred locations, many in premium malls. Macy’s claims consumers have grown accustomed to off-price buying. The expansion follows Macy’s reported success last year with “open-selling” or self-service environments in women’s shoes and fine jewelry. The retailer has been testing it in beauty as well. Karen Hoguet, Macy’s CFO, told Fortune last year about Macy’s shoppers. “Lots just say, 'Leave me alone — let me get the shoe I want and move on.’” Yet the Backstage departments I've seen are devoid of merchandising, proper lighting or much care. Sweaters designed to be lovingly folded are hung forlorn on hangers that stretch the shoulders wide enough to fit the Hulk. Row after row of non-descript t-shirts, dress shirts and casual shirts are jammed on rack after rack, the brand tags nothing more than an afterthought. It is all about the discounted price. Shopping in a place like that is work. It is a shopping trip most would skip. What will it take for retailers to understand discounting more and more merchandise won’t save them? They need to know their customer, carry quality products that are displayed impeccably, and have employees who focus on customer service and can sell those products. That is the way forward. Why don’t they do that? Because it’s hard. Training employees, engaging strangers, moving sequentially through a selling process, upselling, etc. — all hard work. Department stores wonder why brands like Michael Kors and Coach are going direct-to-consumer. They don't want all the hard work they put into creating a superior brand to be watered down, discounted and drowned in a sea of sameness. That’s what a focus on the customer and customer service does — it keeps your brand unique and worthy of the price charged. When you can’t do that, you’re happily selling discount goods.

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