Will Macy’s experiment solve its Millennials problem?
When it comes to trying to court the much sought-after Millennials shopper, Macy’s appears to be sparing no expense. The retailer recently redesigned its flagship location at Herald Square in New York City, and as part of the $400 million renovation turned its basement into a location called One Below. The new shop is designed specifically to feature what Millennials want, or at least Macy’s interpretation of what Millennials want.
According to Bloomberg, One Below features a laundry list of products all targeted towards 13- to 22-year-old shoppers (who, depending on where one draws the line, may fall into the latter era of the broadly-defined Millennial category or into Generation Z). The offerings described go far outside the traditional apparel found at Macy’s: wearable tech and tech accessories; a machine that does customized embroidery on Levi’s jeans; a 3-D printer that makes jewelry and iPod cases; and a so-called "selfie wall," which projects pictures of New York City landmarks in front of which people can take selfies.
The store booms with house music, reminiscent of an Abercrombie & Fitch or Express for Men in their heydays. Photos indicate a glittery but modern appearance that looks part Limited Too, part Apple Store.
Photo: Macy’s
Macy’s also intends to bring in a machine that will allow people to have their selfies 3-D printed into figurines — perhaps a 21st century take on the plastic Mold-a-Rama machines that once drew lines in museums and zoos.
Whether the high-tech bells and whistles and non-traditional product selection will pull in the desired shoppers is something Macy’s itself may be trying to determine. The company plans to roll out some features of the One Below store in its mall locations throughout the country, presumably using its flagship store to field test the success of different features and products.
Given its unique location, the specific kind of Millennial that may visit the store — typically either a tourist or a NYC resident — could have markedly different interests, not to mention disposable income, than Macy’s shoppers in other parts of the country.
Regardless, Macy’s definitely sees attracting young shoppers and cultivating brand loyalty as central to the retailer’s future. In 2013 the retailer began launching more Millennial-oriented apparel brands, and began experimenting with store layout and increasing social media campaigns specifically to attract younger shoppers.
Discussion Questions
Will Millennials and younger shoppers be attracted to the offerings at the Macy’s One Below location? Is Macy’s investing its resources wisely in trying to court Millennials in this way?
Poll
BrainTrust
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Dick Seesel
Principal, Retailing In Focus LLC
The real challenge for Macy’s is not to build a location for Millennials. The real challenge is to get Millennials to walk into Macy’s. After all, it is Macy’s.
You can’t look at your customers like they are are stuck in time nor a stereotype. These Millennials are the future core of your business. The store has to be appealing, not the floor.
Hey oldies of retail. Macy’s is on the money for the non-maturing Millennials and the Generation Z target. And Generation Z fits that “born and live for electronics” group well — seems like the social networks keep them in “hordes” similar to how zombies (somewhat mindless beings) travel.
The One Below floor at Macy’s will fit the Generation Zs fine. Lots of charging stations and good selfie photo locations are a must — and of course free internet and a strong cell signal.
Macy’s just has to make sure that the One Below space can be reconfigured fast and cheap. Why? Generation Z is has more moods than we have ever seen, so if they have a “socially agreed” mood change their retail demands/needs/wants will change and thus One Below may have to go Four Below. Typical horde retailing!
Millennials are often considered to be born between 1980 and 1995 (I have three of them), which puts their ages at 20 to 35. It’s arguable that One Below is actually targeted at “Generation Z” shoppers under the age of 20, or in reality aimed at the huge influx of tourists of all ages walking through Macy’s Herald Square.
Bottom line: The concept as described sounds like it is mis-targeted if Macy’s is trying to draw more Generation Y shoppers into its stores. Yes, these shoppers are more tech-savvy and interested in customization than their parents but are not necessarily driven by gimmicks or club music. You can argue that Apple is the antithesis of a gimmick-driven store.
It’s important that Macy’s capture the biggest segment of the population (in terms of numbers today, in terms of buying power soon), but this may not be the answer. I think the test results are going to be misleading — again, based on the sheer amount of traffic funneling through the flagship store.
Macy’s may do a brisk selfie business among tourists, but so do the desnudas in Times Square. Oh, and those Millennials or Gen Zers or whatever marketers want to call them next … they’ll figure out One Below is still Macy’s.
Nothing screams un-hip more than faux authenticity and nothing doesn’t sell more than generational patronization.
I’m not blaming Macy’s for trying to reach out to younger shoppers, but I am afraid they may have missed the mark here.
That said, there are a lot of tourists in New York.
Good luck!
This sounds like an interesting trial. Something unusual is likely to draw tourists and some local consumers. Will it draw Millennials who live in the area? We will have to wait to see the results of the test. How does putting all the new ideas into one location in one iconic city reveal what will attract Millennials across the U.S.? Probably not very well. This is only the beginning of a lot more testing that needs to be done. Testing some new ideas is great. However, the tests need to be carefully designed and generalizations from the results carefully applied.
Nope.
The future of the department store was sealed about 10 years ago when Amazon really started to make its mark. Maybe even before that, when specialty retailers hit their stride in the ’80s. It’s going to be a slow death spiral and some cool shops here and there aren’t going to stop that (check number of closings for Macy’s this year).
The idea of creating a much more compelling store experience to attract young people is a good one, but very tardy and very difficult to do in scale unless you’ve been doing it for a while (like Victoria’s Secret or the aforementioned A&F) and with reams of insights into that customer. Neither of which Macy’s has.
I’m sure we’ll hear about how well the flagship store is doing when it gets rolling, but the key is this: how will it roll out? And even if “elements” of it are successful on a broader scale, IMO, it’s still not enough to save the model.
Ugh. Just what the world does not need is more obvious pandering to this already largely overexposed, shallow, yet sadly self important generation which has no jobs or money. What they need is help to grow up, not more additional catering to their immaturity.
First, Macy’s is actually not investing much in this experiment. Macy’s is a $30 billion in sales retailer with 800 stores. This project is not even a blip on the ROI screen. And I am sure that they will not get this 100% right. But the customer will tell them what is wrong, and the management at Macy’s will listen and adjust the offering. I am not worried about Macy’s “wasting” resources on this, but I would be worried if they were not investing resources in understanding and serving their “newest” customer group.
They have the world’s largest store—2+M gsf…a third of that selling space (presumably) filled with merchandise, famous for decades for its parade, fireworks and appearances in movies—well, all right, A movie—and this is what they come up with: a playpen for what Todd harshly, but accurately describes as “non-maturing Millennials”….uhm, no.
I don’t see it generating the incremental sales necessary to offset the expense. Maybe there’s sufficient intangible benefit that makes it worthwhile on a very limited basis. I wouldn’t roll it out until I had more data from the flagship.
Macy’s has a huge presence in newspaper advertising which just isn’t compatible with its professed desire to excel with Millennials, who don’t read newspapers….
Not certain that I’m clear on the target audience. If you tell me it is Generation Z, I’d say roll the dice in the basement location. If it is Millennial or Gen X, this is going to be an interesting OooHHH and AaaHHH period for about six months. It reminds me of a concept mall adjacent to Navy Pier in Chicago.
Trying to spend time with a 12 year old daughter and three of her friends on a Saturday some 20 years ago, we took them to this mall to dance, make music videos, and eat pizza, while my wife shopped Michigan Avenue. Fun concept, but little to bring any of us back except when cousins came into town from Iowa.
The Millennial, while not world-wise at this particular stage, is a savvy, sophisticated shopper. They are between the ages of 18-34, not 11-21. Go about this move cautiously.
There might be an attraction to Macy’s One Below location, but Macy’s needs to focus more on delivering some of the same standards that originally made it successful…including improving their offerings, enhanced customer service, and making the customer feel that they are the most important thing once they are in the store.