Photos: Rebecca Fitts, Instagram @thewildwestofretail
Macy’s expands in-store pop-up concept with Facebook’s help
There were high hopes for “The Market @ Macy’s” when the retailer launched its turnkey in-store pop-up concept earlier this year. Now, the department store retailer is adding the concept to new stores and looking to take the buzz surrounding The Market to a new social level via a partnership with Facebook.
Yesterday, Macy’s announced that it was expanding the Market to two more of its locations, one at the Lenox Mall in Atlanta and the other at Century City in Los Angeles, to bring its total to 12 across the country. The chain has added the concept to its most heavily trafficked stores, including its Herald Square flagship in New York. The new pop-up areas will also be larger — nearly double the size of the first Market spaces, CNBC reports.
In nine of the Market shops, Macy’s is partnering with Facebook, which will place nearly 150 e-commerce brands in the path of the department store’s customers.
“Macy’s shoppers will have the chance to meet businesses such as Love Your Melon that sells hats and apparel to help in the fight against pediatric cancer or Charleston Gourmet Burger Company that started from a backyard barbecue and has expanded to reach customers in all 50 states,” said Michelle Klein, director of North America marketing, Facebook, in a statement.
Macy’s has pitched its Market concept as a turnkey operational solution, enabling companies to gain additional exposure to the department store’s customers without a long-term commitment. Those opening pop-ups pay for the space, but do not share revenue with Macy’s. Space is rented with a one-month minimum requirement and rates are based on location.
In addition to the Market/Facebook news, Macy’s highlighted its use of virtual and augmented reality tech in stores.
By early November, Macy’s expects to have completed the launch of VR for Furniture in 69 Macy’s stores across the country. The chain has seen the overall furniture basket sizes in stores with the virtual reality tech climb 60 percent higher than those without it. Customers using the technology are also less likely to return purchases, with the percentage of returns in VR stores falling to below two percent of all transactions. Another benefit of the technology is it allows Macy’s to feature more of its furniture selection without taking up space on the sales floor.
Macy’s is also using AR in furniture. The retailers launched the “Visualize Your Space” app to enable customers using iOS devices to see how various pieces of furniture would work in their actual living spaces. The chain plans to add an Android version of the app in 2019.
Beauty is another area where Macy’s is using technology to improve the customer experience. The chain is using in-store virtual mirror technology to expose customers to more than 250 beauty items and use a kiosk to see how they would look using the products. The technology is currently available at 250 of the chain’s stores and Macy’s testing a similar feature on its mobile app.
Discussion Questions
DISCUSSION QUESTIONS: What is your reaction to Macy’s Market partnership with Facebook? Do Macy’s pop-up, VR and AR efforts give you hope that the chain is finding ways to make the needed customer experience enhancements to keep its stores vibrant?
Poll
BrainTrust
Georganne Bender
Principal, KIZER & BENDER Speaking
Sunny Kumar
Head of Experience Design, Tribal Worldwide London
From what I gather about the partnership, Facebook is using its data to identify brands that are popular on its platform, and then bringing those brands to Macy’s to be included in the physical Market space. Facebook’s data, Macy’s physical infrastructure.
If two data points makes a trend, then this is a trend, because Kohl’s has also announced a partnership with POPSUGAR, to do basically the same thing: take fashion trends identified by POPSUGAR (a media brand) on its digital properties, and use that data to inform the assortment made available in Kohl’s physical infrastructure.
I see this as “one of these things is not like the others” when put in comparison with the other tech investments that Macy’s is making. In the Facebook case, they are effectively outsourcing the data and the analysis, and when it comes to understanding customers and what they want, for a retailer to outsource that is never a good thing.
Macy’s is moving in the right direction and it is pleasing to see management try and test new things as well as advance existing ideas. However, the issue I always have with Macy’s is that while this all sounds good, the reality on the ground – especially in more remote stores – is still lackluster and down-at-heel. Macy’s talks a good game, but it needs to pull these initiatives together into a coherent strategy to defend its department store business.
Not at all. This is just window dressing, no pun intended, that signifies a desperate brand. My real question: Why don’t retailers face the real problem? What does its brand mean that’s different from the competition? How do they fulfill that brand promise?
Instead, retailers like Macy’s think the keys exist in tactics that do little to create preference. Think about this. To use these pop-ups, customers have to go into the store. But the problem is that few are going into the store. They think this will draw them in?
Yes…
The face of retail is changing at an accelerated rate, having multiple test-and-learn activities in play makes total sense and it seems that Macy’s is doing well in learning from the concepts that are working and then actively scaling those that gain traction or increasing spend to other locations.
They have realized that being innovative with the physical space they have as well ask as the technology they use will be key in ensuring that they don’t turn into a retail wasteland.
Though, with the The Market @ Macy’s they will need to ensure customers get the same level of Macy’s experience they expect and be careful about who they affiliate themselves with.
Macy’s has made significant strides in socializing their shifts to a more innovative and experimental-focused pop-up side of retail. Through these sorts of partnerships, as well as their well-publicized acquisition of STORY, there certainly is some momentum showing that Macy’s is willing to experiment, test and make the necessary shifts to remain relevant.
Perhaps through a partnership with Facebook, Macy’s will drive some additional traffic to their stores. Considering how omnipresent the Instagram platform has become in the fashion, lifestyle, and beauty segments, there could be something.
At the end of the day, its all about operationalizing all these insights into the actual in-store experience. Buzzwords and public relations announcements will only get you so far. The rubber hits the road with the in-store and cross digital channel experiences.
I have to give Macy’s more and more credit for testing and implementing this kind of project. I see it as a perfect vehicle to regionalize and localize the business. It leverages Facebook’s data and Macy’s space, and then leverages Facebook’s outreach. Macy’s is tapping a vein they could never tap on their own. Facebook gets even more data. Customers get more focused assortments. Win/win/win. Explore + Experiment = Experience.
For all the talk about technology on the sales floor, here’s a retailer that’s actually bringing it. And in time for Holiday 2018.
The Market @ Macy’s tie-in with Facebook makes perfect sense; we see an e-commerce company on our timeline that’s intriguing and now we can physically shop it in-store. With this move Macy’s has broken the fourth wall of retailing.
Well stated and I agree with Georganne. I am very interested to see how this all plays out.
Thanks Brandon! I am, too.
Yep…I have been very down on their Last Act and Backstage in-store initiatives. This is a big step in a positive direction!
Great point bringing up Last Act and Backstage. Both of those initiatives still feel like they are cannibalizing their own apparel sales and training customers to expect lower prices before they buy. Those initiatives distract, while these new initiatives like The Market are all about giving non-price related reasons to come to the store.
Last week I was in side by side Macy’s and Lord & Taylor stores. Both are a dichotomy. One side of the aisle wants to be Nordstrom and the other side of the aisle wants to be TJMaxx. Nothing easy about being in the middle these days. Lots more zigging and zagging before a healthy new model emerges. But Macy’s is doing what they have to do to EVOLVE. Painful process….
I think Macy’s gets beat up more than it deserves. All of these examples showcase that they are certainly working not just to evolve with the space, but to lead in it. The part of the story that really jumps out to me is the VR furniture numbers. A 60 percent increase in basket sizes and fewer returns, and that tech is only being implemented in 10 percent of its stores. It should be an interesting holiday season for them!
I see nothing but good news here. They are leveraging sound analytics and pilot store successes to drive further investments in technology-driven experiences and customer-driven assortments … two of the pillars of modern retailing success. Well done, Macy’s!
Yes, I agree! Plus, this has Rachel Shechtman’s fingerprints all over it Remember when Macy’s acquired STORY? This is part of the reason why, I’d bet.
Great point re: Rachel Shechtman, Joanna — I hadn’t thought of it, but I am sure you are correct. This move definitely sounds like her….
This is all tactics. I don’t see a strategy. Macy’s must say, “we are no longer the old department store, we must become something different.”
I don’t know what the “different” is. I do know the department store model has outlived itself.
Yes, they’re all tactics — at some level, Macy’s is being like Walmart and experimenting in multiple dimensions to see what works. I think they deserve credit for that, but like most department stores today, they still haven’t addressed the core problem — who is Macy’s in the eyes of their shopper!
Excellent comment. We will give them credit for trying. And, you are so right…”they still haven’t addressed the core problem — who is Macy’s in the eyes of their shopper!”
Isn’t this idea that department stores were actually founded on? Such a no-brainer. But it’s interesting to see how far they strayed and now to see them reel the idea back in and call it new. Almost denying their past when actually, they should never have stopped. What’s next? Super creative display windows as new?
I’ve always liked the idea of the Market at Macy’s (and its acquisition of the excellent STORY) so it’s nice to hear it’s being rolled out further. The Facebook tie-up is an interesting one but may mean Macy’s is getting some insights that it wouldn’t have otherwise. It’s still early days for VR and AR in retail but I think Macy’s has pitched this well by using the tech for furniture and home purchases. These are sectors where the tech genuinely has decent application and benefit at the moment – it’s a good call.
The partnership with Facebook should help Macy’s identify more product opportunities that are a good fit for their Market Shops. The Market Shop concept is a great way for Macy’s to keep customers interested by introducing new products on a frequent basis.
The other innovative technology experiences (AR, VR, and virtual mirror) also create buzz for the stores and will attract customers that are interested in trying out these new experiences. I applaud Macy’s for testing a lot of new ideas to keep their stores relevant and vibrant.
Twelve? In a chain of what size are they today? ~700 stores? I’m unclear on how this is going to be, as the saying goes, a “game changer.” I realize they want to test the idea first, which is fine, but this seems remarkably timid; and publicizing it on Facebook, when it’s available … well, practically, nowhere, seems more likely to lead to disappointment than build “buzz.”
It’s pleasing to see Macy’s experimenting and taking chances with multiple tactics to see what works and what doesn’t. In some cases, they are taking a department by department approach — VR in the furniture department for example. This makes sense if we look at it through the lens of technology — they’re applying VR where it makes economic sense and has proven itself rather than trying to force an entire VR shopping experience on their customers. With AR, it’s the same story — use it where it will have a positive impact on the bottom line while also delivering real value to the customer.
The Market partnership with Facebook is slightly different — here they’re leveraging data from another source to fill a gap and help them narrow the scope and focus of the offerings in The Market to appeal to a local audience. I think this is a smart approach, but there it’s always risky when retailers outsource too much information and knowledge to third parties.
The open question is what is the strategy when you look at all of these initiatives combined? Seems to me it’s based on getting increased foot traffic to the store in the hopes that will translate into more purchases. Unfortunately, hope is not a strategy so I’d expect there is more to this than meets the eye that we are not hearing from Macy’s. At least I hope so!
Lastly, how does all of this fit in with Last Act and Backstage? Both of those initiatives still feel like they are cannibalizing Macy’s apparel sales and training customers to expect lower prices before they buy. Those initiatives distract, while these new initiatives like The Market are all about giving non-price related reasons to come to the store.