Test kitchen: Can Macy's Inc. (M) find the recipe for new growth in Columbus?

Easton Town Center store is a prototype
Test kitchen: Can Macy's Inc. (M) find the recipe for new growth in Columbus?
Posted at 10:56 AM, Sep 08, 2016
and last updated 2016-09-08 21:59:55-04

COLUMBUS - Famished after your free yoga class, you stop for a fresh smoothie. That’s when you notice the new fitness line from Nike. No time to shop. You’re late for an eye appointment. So, you ask your personal stylist to find the right look for you. She’ll have some options waiting after your appointment at Lenscrafters.

Such is the life Macy’s Inc. aims to inspire for shoppers at a prototype store at Easton Town Center near Columbus.

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It’s part of Macy’s new “shrink to grow” strategy, which calls for closing about 100 lower-performing stores and devoting new resources to 150 stores with the greatest growth potential.

“Our work with our top 150 doors gives us confidence that we can accelerate our growth in these strategically critical locations,” Macy’s Chief Financial Officer Karen Hoguet told analysts in August. “This will come from a combination of improved assortments, more technology, more and better customer service, and more special events.”

The company has yet to announce which stores will close, but Macy’s spokeswoman Andrea Schwartz said the Kenwood Towne Centre store is on the company’s top 150 list. So is the Easton store, unique because many of the ideas brewing there are new to the company. If the new ideas work, they will eventually flow to Kenwood and beyond.

So, WCPO arranged a tour of the Easton store to gauge how likely its new products and services are to help Macy’s end a sales slump that has now lasted six straight quarters.

Our tour guide was Kathi Newton, vice president and manager of the of the Easton store.

The first stop is Macy’s first and only health and wellness section. It combines several fitness apparel brands for men and women, along with exercise equipment, health foods, a Berry Blends smoothie bar and free yoga classes that drew about 35 people a week to an outdoor courtyard this summer.

Sales of fitness apparel have increased since the Easton store created the 7,000-square-foot section, but Newton declined to say how much.

“It’s probably one of the areas we get the strongest compliments about,” she said.



A fine jewelry section sells loose diamonds and custom engagement rings, shown in a private viewing room. The glass-enclosed room is an Easton-only refinement of a jewelry-selling strategy Macy’s developed on the West Coast. And yes, it is boosting revenue. Newton said the store recently sold a $12,000 piece of jewelry, something that never happened with the old jewelry-sales approach.



Easton also added its own refinement to Macy’s new bridal-salon approach, which offers one-stop shopping for Men's Wearhouse tuxedos and an expanded selection of dresses for brides, mothers and members of the bridal party. The Easton twist is a wedding stylist who dramatically improved customer satisfaction and revenue.

“It’s been incredible, the increase here,” Newton said, again refusing to quantify the sales gain. “There is no time in a person’s life that is probably the scariest and yet the most important. To have somebody who can help you through that is a real big win.”



In the cosmetics department, Macy’s opened an event space in July that draws about 100 shoppers a month to demonstrations on how to apply different makeup brands. The three-mirror demonstration space is prominently located in the middle of the store, next to a new personal stylist space that is testing whether locating the service in a prominent place will boost revenue.

“I don’t have specific numbers for you, but I would say that you’re never buying one item when you’re working with a personal stylist,” she said.



Macy’s Easton store is among the first in the country to install a concierge desk called Connect@Macy’s, where customers who order online can pick up merchandise without trudging through the store. 

Also at the front door, Easton shoppers are exposed to a “visual moment” of 15 to 20 mannequins, dressed in the ways that showcase the latest fashion trends, along with signage to let them know where in the store to find these looks.

“It’s amazing how many times customers will walk up to an area and say, ‘I’m looking for the gray dress that I saw right at the entrance to the store.’ And now we say, ‘Oh, that’s Bar III. Let me take you over to Impulse.’ So, now not only are we selling them that gray dress, but pieces that go with it.”



Macy’s Easton store was among the first in the country to get a Lenscrafters store within a store as part of a licensing agreement with the eyewear chain. Newton said it’s a traffic generator, but declined to offer additional details.



The company has estimated it will lose $1 billion in net revenue from its 100 store closings. That, combined with the growth of online retailers like Amazon, leaves some analysts skeptical that Macy’s can reverse its sales slump. 

“Macy’ s lacks a moat and is in a sector experiencing secular decline,” wrote Morningstar analyst Bridget Weishaar in August. “In our opinion, department stores will continue to be forced to compete on price with newer e-commerce entrants and an oversaturated competitive environment. As such, we continue to think that long-term top-line growth will trail that of the overall retail sector.”

Macy’s could squeeze $1 billion in additional revenue from its top 150 stores if it continues to innovate on merchandising, digital strategies and customer service, said Stan Eichelbaum, president and founder of Marketing Developments/Planning Developments Inc. in Ft Lauderdale, Fla.

“They’re at the starting point, not the finish line,” said Eichelbaum, who is well known in Cincinnati for his retail consulting work. “Macy’s efforts are admirable, but the customer is evolving at the fastest pace in history.”

Eichelbaum described as “impressive” Macy’s use of life events like weddings as a fulcrum for new sales strategies in its jewelry and bridal departments. He likes the row of mannequins at Easton’s front door, saying it could energize shoppers.

“Great stores are buying agents for the customer,” he said. “The question is, can they follow it up with the right buying” on an ongoing basis.

“Is it achievable? Yes,” he said, “but it’s going to be an every day battle forever.”