Macy’s Tuesday announced a three-year growth strategy. It includes plans to close 125 stores that are least productive and reduce 2,000 corporate jobs, reports CNBC. The retailer will close its San Francisco, Lorain, OH, and downtown Cincinnati offices. It will consolidate its headquarters to New York City. The Polaris strategy is the company’s turnaround plan. It aims to make cost savings that will be reflected in the company’s bottom line. Macy’s stated in a press release that its main focus would be on five pillars: strengthening customer relationships, curating quality fashion, accelerating digital growth, optimizing store portfolios, and resetting cost base.
In a press release , the company also announced plans to upgrade 100 stores with new technology. This is after existing stores that have been treated with this model continue outperforming dated ones. Macy’s will double its investments in digital, including its apps and its Off-price Backstage, as well as its merchandising strategies.
Total Retail’s View:Macy’s, like other traditional retailers, is realizing that its huge brick-and-mortar presence must shift, scale down and become more digitally connected to attract customers. Market by Macy’s is a store format that allows for smaller stores to be placed outside the mall. It offers features such as curated merchandise, local products, food and beverages, and community events. This pilot program, if executed well could help Macy’s regain its footing within local communities and reshape its image as a traditional department store.
Jeff Gennette, Chairman and CEO of Macy’s, Inc., stated, “We’re making significant structural changes to lower costs, bring together teams and reduce duplication of work… I’m confident that we’ll emerge stronger, more agile, and better equipped to compete in today’s retail market.” The plan’s inclusion of store closings, job cuts, and consolidation efforts makes it difficult to believe. Although the Polaris strategy may offer some hope for the struggling company in terms cost savings, it will have to show itself in other areas, such as accelerating digital growth.
How retail is changing and where it’s headed in 2020
Brick-and-mortar retail is a strong and long-lasting business model. Despite common misconceptions about drone deliveries and online shopping, real stores are still essential to people’s lives. This will continue for many decades.
Escalent research found that in-store sales still outstrip online sales ($152.7 Billion vs. $62.5 Billion). Online retailers only outsell physical stores in a few categories. The retail demographics are older. However, those with lower household incomes than $80,000 shop more in stores that their wealthier counterparts.
The State and Consumer Behavior Report confirms that 53 percent of consumers prefer to shop in physical stores. Many shoppers prefer brick-and-mortar because they can touch and feel the objects in person.
Retailers shouldn’t be afraid to take a step back, even though the future of retail looks promising. Retail will continue to evolve at an accelerated pace due to changing customer expectations and the pressures of e-commerce. Payless and Sears were retail icons that couldn’t keep pace with the times. The retail brands of tomorrow need to be able to compete in an increasingly competitive marketplace. This starts with the experience in-store.
Retail’s Evolution Revealed through Experiences
In the next decade, forward-thinking retailers are likely to prosper. Others who rely on outdated tactics will lose ground and stagnate.
Because shoppers value in-store experiences, it will be the difference between winners and losers. Our survey found that 68.9% of respondents said that an excellent in-store experience was very or very important to their shopping experience. Retailers must offer better customer experiences to maintain customers’ loyalty, given the changing ways people shop and interact with brands. You can find similar products online at a fair price. While retailers can’t charge 50 percent more for human interaction, it is possible to stand out from the crowd and not be compelled to offer the lowest price.
Happy customers spend more money. Take into account that 22.8 percent said they would shop more if the store owners offered unique experiences.
Retailers must learn as much as possible about their customers and how they want to provide relevant experiences. This goal can be achieved by technology, which can assist companies in acquiring, analyzing and leveraging data. The future success retailers will combine business intelligence with in-store activations to keep customers coming back, no matter how advanced ecommerce gets.
It is hard to overstate the difference between immersion and impression. In-store experiences are a great way to communicate brand values, vision and culture to customers. Websites can’t compare. Only in-store interaction can create the complex mental connections that make consumers want to become part of a brand. Only retailers who prioritize great experiences will reap the rewards.
Complete Commerce Ecosystem
Retailers must understand the way consumers think about information in order to provide better customer experiences. The ability to touch and feel products is the primary reason people prefer to shop in physical stores (40.3%), closely followed by a pleasant shopping experience (38.5%). Visual cues are what people rely on to make decisions. In-store visuals should be filled with relevant information and behavioral triggers. Customers and companies will benefit from visual triggers that are more effective.
Consumers today expect brands to create immersive, interactive experiences. Consumers don’t want boring ads or flashing lights. They want content that is relevant to their needs and gives them the information they need. These are the top priorities for retailers when creating in-store experiences.
1. The complete journey of commerce is what you should be focusing on.
People rarely shop entirely online. They use their smartphones to find out more information about products and compare prices when they are in stores. Survey respondents indicated that more than 68 per cent had used their smartphones to compare prices online before purchasing a product in a physical shop. To meet customer expectations, smart retailers will create seamless, omnichannel experiences from awareness to purchase to delivery.
2. Give them something that they won’t find anywhere else.
Young people are drawn to experiences so make sure you give them something they won’t find anywhere else. Smart technologies, fun partnerships, and brand activations in-store can all help drive traffic to your store.
3. Keep up-to-date on new services and products.
Retailers who are savvy know how to convert a single transaction into multiple larger purchases. How can you capture the needs of your customers in-store and use that information to improve your customer experience?
4. Digital in-store promotions
Online banner ads are often ignored, but people pay more attention in-store to promotions. Digital technologies can be used to engage and interest physical visitors in products and offers they might otherwise have missed.
5. To inspire visitors, expand the physical into digital.
Custom content and social proof are powerful partners. Encourage customers to participate in store experiences. Then, share the evidence on social media. Encourage customers to share their experiences with their friends and followers. To increase foot traffic and sales, create FOMO among the audience.
We can see that people aged 17-34 prefer online shopping to physical shops at 55.1 percent. People over 35 prefer physical shopping to online shopping at 57.5 per cent.
While the retail revolution has made it easier to shop online, physical retailers still have many opportunities. Do not let online competition get you down or become complacent. You must first focus on your customers and the in-store experience. Then, give them everything they need to keep coming back.