Macy’s new private label comes in a Pinot Noir

With the sustained success and popularity of private-label wine such as Trader Joe’s Charles Shaw line (known as "Two-Buck Chuck" and celebrated as much for its price point as its relative quality), it’s no surprise to see another major retailer rolling out its own wine brand. What may be surprising, however, is that the latest offering is not coming from a grocery retailer or a foodservice operator. Macy’s has announced that it will begin selling its own private label wine brand, which will be available at some Macy’s-owned restaurants, as well as in select Macy’s stores.

According to a press release, the department store chain has partnered with KDM Global Partners, a private-label wine company, to create three wine varietals; a Pinot Noir, a Chardonnay and a Cabernet Sauvignon.

"This flagship wine brand will create additional exposure for and loyalty to the Macy’s wine category among its customers — enhancing the overall Macy’s experience," said Jonathan Gelula, KDM’s President in the press release.

Charles Shaw wines=

Photo: Trader Joe’s

Other retailers not primarily known for beer and wine have recently tinkered with their formats to facilitate moving into adult beverages. Starbucks’ Evening format now offers coffee drinkers the option of a wine and craft beer menu after a certain hour at some locations. The in-store bar at some Whole Foods enables customers to drink before, or while, they shop (perhaps easing the sticker shock some customers experience when finally reaching the register).

The press release does not indicate whether the private label wine will remain restricted to the higher end restaurants in its flagship stores such as the Walnut Room in Chicago’s Loop location on State Street (which added a wine bar in 2007) or if the retailer aspires to fit wine purchasing and drinking into the broader Macy’s experience.

Macy’s does, however, appear to envision wine as playing a role in the way customers understand the brand. In addition to Macy’s in-store offerings such as the Walnut Room wine bar, there are also wine shops attached to some flagships and the retailer’s online store features a range of tools for bartending and wine-related accessories.

BrainTrust

"You’d have to have a tossed back a few, in my opinion, if you think this has legs. Imagine a dinner party where the host pulls out a bottle of Macy’s Pinot Noir ... "Oh, you pulled out the good stuff just for us," or "Oh, did you get that free with purchase?""

Bob Phibbs

President/CEO, The Retail Doctor


"One word: Margin! There are a number of reasons that private label is attractive, and it certainly starts with the potential for greater margin and profit."

Chris Petersen, PhD.

President, Integrated Marketing Solutions


"Smart move by Macy’s. They want to become a lifestyle brand, not just a clothing and accessories retailer. El Corte Ingles in Spain has done this successfully by setting aside space to offer a curated selection of wine, gourmet food and the accessories to go with both."

Max Goldberg

President, Max Goldberg & Associates


Discussion Questions

Will Macy’s move into private label wines benefit its brand image and awareness among consumers? What should Macy’s pursue or avoid as it moves more into the wine and related accessories business?

Poll

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Frank Riso
Frank Riso
8 years ago

The ability to have a glass of wine before, during and/or after shopping at Macy’s is a brilliant move. The only downside is the retraining of cashiers to check the age of the consumer.

Having only private-label wines may be the real challenge for Macy’s customers as many of them have a preference in wine. It may be a better idea to franchise out its wine department as many retailers do today. In that way it would have both variety as well as sales. Macy’s is no place for a two-buck Chuck nor any amount that low!

Bob Phibbs
Bob Phibbs
8 years ago

Was there a spirits workshop at the last NRF? Lululemon has announced a limited edition run of a beer with their logo on it. Terrible idea supposedly trying to drum up support from male shoppers as I noted here.

Macy’s is many things, but aspirational wine merchant to enhance the coupon-driven brand experience? You’d have to have a tossed back a few, in my opinion, if you think this has legs.

Imagine a dinner party where the host pulls out a bottle of Macy’s Pinot Noir … “Oh, you pulled out the good stuff just for us,” or “Oh, did you get that free with purchase?”

Chris Petersen, PhD
Chris Petersen, PhD
8 years ago

One word: Margin!

There are a number of reasons that private label is attractive, and it certainly starts with the potential for greater margin and profit.

Assuming a quality product, promoting their own private-label wines is a logical brand extension for the Macy’s brand itself. Having their own private label enables Macy’s to craft their image in the category, as well as extend lines of business in the profitable accessories categories.

A primary rule of survival in the new retail normal is differentiation. This is a good move for Macy’s to differentiate product lines, and their brand.

Max Goldberg
Max Goldberg
8 years ago

Smart move by Macy’s. They want to become a lifestyle brand, not just a clothing and accessories retailer. El Corte Ingles in Spain has done this successfully by setting aside space to offer a curated selection of wine, gourmet food and the accessories to go with both.

Dick Seesel
Dick Seesel
8 years ago

I see from the linked article and photos that the wine is indeed labeled “Macy’s,” complete with the red star logo. I was hoping that Macy’s might have developed a private label with the ability to expand some brand equity to other offerings in its “food halls.” But no such luck.

Macy’s wine may make sense in its restaurants, but is there a business here for self-purchase and especially for gift-giving? Can you picture yourself taking a bottle of Macy’s Cabernet as a “thank you” gift to a holiday party? I can’t.

Joan Treistman
Joan Treistman
8 years ago

If the strategy is to associate Macy’s own wine with food and other wine drinking contexts I think they’ve got a chance. First build up the credibility and then it’s possible to expand the distribution. Most importantly the wine’s taste must appeal to the customer when the customer is drinking the wine. I can envision Macy’s having special wine tasting events for “VIP” customers to help promote their product.

Wine is still considered a classy accompaniment to dinner, celebrations and what the elite do. Macy’s image can benefit from the association. In addition to the product itself (taste, price and quality) the bottle and label design should be a factor in Macy’s marketing strategy to insure brand equity enhancement.

Gordon Arnold
Gordon Arnold
8 years ago

Macy’s is now focused on keeping up with the retail beleaguered. Turning away from store merchandising solutions to finding brands and product categories that sell. While many of us in retail agree with the expansion theories as a solution to the shrinking demands of the depression we are in there are many obvious and not-so-obvious missteps. While this is perhaps not so much of a stretch as things like designer lawn mowers or camouflage makeup it is still a radical departure from their expertise. They may have a limited amount of success but there is no reason to believe this will return the company to the growth improvements investors want.

Ian Percy
Ian Percy
8 years ago

Frank mentioned that “two-buck Chuck” (now usually “three-buck Chuck”) has no place in Macy’s. He may be right about Macy’s but I think there’s another angle here that someone needs to pursue.

There was a point recently where one out of four bottles of wine sold for $3 or less! AC Nielsen notes that by far the majority of wine sales are those priced under $6. In other words there is a HUGE “Frugal Wine Drinkers” community out there (I’m a charter member) that someone needs to brand and flaunt. Be perfect for a Trader Joe’s or World Market/Cost Plus. BTW, this is true of spirits too.

Google “frugal wine” and you’ll see what I mean. So for goodness sakes if anyone likes this idea … call me!

Li McClelland
Li McClelland
8 years ago

Twenty five years ago a bottle or case of wine with the upscale Marshall Field’s logo and label from their wine shop automatically signified quality and meant something special when you served it, or brought it as a hostess gift, or gave it as a wedding gift. Twenty-first century Macy’s label wine? Not so much.

Shep Hyken
Shep Hyken
8 years ago

This is a bold move. I struggle with the idea of Macy’s getting into the wine business. This is quite different than bringing on a new line of designer clothing to bolster their image. This is changing lanes. The first thought that came to mind was if I would bring a bottle of Macy’s private branded wine to a friend’s house who invited me to dinner.

What does Macy’s want to be known for? Does wine play a part of that? Can it enhance their brand? Does it give clarity to what they stand for? I will be interested to see how it works. (And, I hope it does!)

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
8 years ago

If Macy’s had a gourmet wine section or even a well established food section, the introduction of private label wines could make sense. I do not see it adding value to an existing restaurant or as an effective way to promote a wine bar in some stores. This is a tangential item, not a core item that is closely associated with the brand. This is a real stretch.

Craig Sundstrom
Craig Sundstrom
8 years ago

And what exactly is Macy’s “brand image”? At this point—outlets, flagships, worn-out former May Co. locations, trendy spas—it seems like Harrods’ “Omnia Omnibus Ubique”…or more particularly a confused effort to actually DO that (since Harrods is really aimed at a rather narrow group of people). As for the offering it in their restaurants part, they have 800+ stores, and how many of them—five or six?—have restaurants? If that’s image building, then it’s like building a pyramid one pebble at a time.

Laura Davis-Taylor
Laura Davis-Taylor
8 years ago

I’m 100% with Camille…this is a classic example of a brand stretching far beyond its guardrails. I think it’s going to land right where Frito Lay’s lemonade did.

Lee Peterson
Lee Peterson
8 years ago

Man, that’s grasping at straws. My first reaction was, “huh?” as I’m sure will be same for many customers. I frankly don’t see it as a solid revenue stream at all.