Choose the driver of Macy’s Transformation Strategy

Yesterday’s keynote presentation at the Shoptalk conference was given by Jeff Gennette, CEO, Macy’s. Gennette described the company’s transformation strategy in order to recover from some tough years. The core of Macy’s transformation is giving customers choice.

Gennette began his presentation by sharing some amazing statistics about Macy’s place in the retail landscape. Macy’s is a popular destination for American shoppers. Half of Americans visit Macy’s at most once a year. 60 percent of Americans live within 10 miles of Macy’s stores. Macy’s was not able to rest on its laurels due to the disruptions in the retail sector over the past few years.

Gennette noted that “Macy’s legacy isn’t enough to guarantee success.” Macy’s was very difficult in 2015 and 2016. We were losing customers, and our market share was declining. We had to start over.”

Forensic mapping of the Customer Journey

Four tenets are at the core of Macy’s transformation: value, inspiration, fashion and great experiences. Macy’s has launched the North Star strategy to help it navigate the company’s way back to growth.

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Gennette stated that the customer was the key character of our turnaround and described brand customers as optimists. “We have the potential for stronger relationships with them and to be more than just transactional. She values the human touch and the convenience of technology. We are not in the commodity industry; we are in the experiences business.

Macy’s took several steps to inspire customers. Gennette described the mobile channel as the gateway to the brand and said it’s being treated like a flagship store. There has been better social engagement via its #MacysBeauty tag (beauty is one of Macy’s most popular categories) and a revamped loyalty programme.

Gennette said, “They’re looking to inspire.” “Inspire and celebrate Macy’s customers moving forward.”


Macy’s has implemented a new, additive merchandising strategy throughout all its channels. It includes private brands, which accounted for 29 per cent of company’s 2017 sales and Gennette predicts that it will reach 40 per cent in the near future), capsule collection with in-demand designers and exclusive deals with national brands that can only be found at Macy’s.

Gennette stated that she will double her online inventory in 2018. She used data to guide her search for what she was looking for and what our competitors were offering.


Macy’s is committed to simplifying its pricing and promotions approach. Gennette joked about how calculating the price of an item in a Macy’s shop after taking into account all the discounts and promotions is like an Olympic sport.

Macy’s will be focusing on mobile and its app to make it easier for customers to apply for discounts and keep track of loyalty rewards and pay for their purchases using their smartphones. Macy’s will also launch a tender-neutral payment method in May.

Macy’s also expanded Backstage, their off-price concept. This is another piece of the value equation. Gennette stated that Backstage stores averaged seven more points than full-line stores. In 2018, the plan is to expand the number of Backstage shops to 100, including the first West Coast outposts.

Amazing Experiences

Many brick-and-mortar stores, including Macy’s, have difficulty speeding up checkout. Macy’s has developed a mobile checkout solution to address this problem. The Macy’s app allows customers to scan the barcodes for the items they wish to buy, then pay with a credit card in the app. They can then go to a designated section of the store to have the items bagged. This service will be available in all Macy’s stores by the end of this year.

Macy’s will make it easier for customers to order items and make it easier for them to pick them up. Macy’s is increasing fulfillment options for customers. Customers can now buy online, pick-up in-store or ship from the store.

Macy’s will be offering virtual reality technology in select Macy’s stores to assist with furniture shopping. To experience a fully furnished room, customers can purchase VR headsets in-store. Gennette said that VR headset users are more likely to convert and spend more than customers who have not used them. This summer, the VR technology will be available in 60 Macy’s stores.

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Macy’s has also invested significant resources and time in getting its brick-and mortar stores back to profitability. Macy’s is calling this its Growth 50 initiative. It has chosen 50 stores to receive additional funding for pilot technologies, new store fixtures and higher wages. These 50 stores will be used as a test ground for future projects.

Gennette stated, “What we learn in these 50 stores is what will we roll out in 2019.”

Gennette stated that 2018 is a year of momentum and growth. Gennette noted that Macy’s reported positive comps for the fourth quarter, reverseing a negative nine-quarter trend. We will see a 60% increase in store capital in 2018, year-over-year. We are investing in technology, stores, and people.”