Macy’s latest acquisition is all about STORYtelling

Discussion
Photo: STORY
May 03, 2018
George Anderson

Macy’s, Inc. announced that it has acquired STORY, an experiential concept store in New York. STORY’s founder and CEO, Rachel Shechtman, will join Macy’s as the company’s brand experience officer focused on the retailer’s in-store experience.

STORY completely changes its store layout and merchandise every four to eight weeks, focusing on a new theme with each changeover. The concept, which was founded in 2011 by Ms. Shechtman, a former brand consultant for Kraft and TOMS shoes, emphasizes brand collaboration as it builds unique retail experiences for consumers.

“It’s exciting to have a national stage to leverage STORY’s learnings and relationships to create impact at scale,” said Ms. Shechtman. “I’m energized by the opportunity to further build new customer experiences across the Macy’s portfolio, while also continuing to pursue new business models and brand partnerships.”

“Rachel is a unique and innovative voice in retail, and we are thrilled to have the STORY team join the Macy’s family,” said Macy’s, Inc. CEO Jeff Gennette, in a statement. “Bringing Rachel’s perspective to the table will help create more enriched and engaging in-store experiences and brand activations.”

Mr. Gennette said the STORY acquisition is an “important step” in Macy’s growth plans for 2018.

Photo: STORY

“I’m highly interested in trying to bottle what I see at STORY into many stores that have thousands of people walking through them every single day and are just ready to be turned on,” he told Business of Fashion.

STORY will continue to operate its business as usual in the Chelsea section of New York City. The company’s chief operating officer, Jenny Shechtman, will become vice president, operations at STORY under Macy’s

DISCUSSION QUESTIONS: What are the most valuable lessons Macy’s can learn from STORY? Will Rachel Shechtman be able to scale something akin to the STORY experience and apply it at Macy’s?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I believe the STORY acquisition is the first step towards merchandise presentation by lifestyle rather than by department."
"I fear Macy’s will do to STORY what they did to Marshall Field’s."
"Rachel will be fighting 159 years of “We’ve always done it this way” tradition. She is a brilliant woman and I wish her the best."

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27 Comments on "Macy’s latest acquisition is all about STORYtelling"


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Mark Ryski
BrainTrust

The work that Rachel Shechtman did building STORY is laudable, but whether her ideas can scale at Macy’s is a big question. Retailers are rightly focused on creating meaningful store experiences, but there is no magic formula for how this actually happens. I think it’s an interesting move for Macy’s to bring Rachel in to help create something new, but I see plenty of challenges with executing this at scale at Macy’s.

Jeff Sward
BrainTrust

This scenario can evolve several different ways. But in the short term all Macy’s needs to do is open STORY pop-up shops and there is suddenly a new, interesting reason for customers to walk in the mall entrance. This is testable on so many levels.

Neil Saunders
BrainTrust

There are many things Macy’s can learn from STORY. The need to keep the customer engaged by regularly changing the assortment. Curating collections that are cohesive and inspire beyond the products themselves. The concept of “less is more” through careful editing. Adding more theater to the retail experience. And so the list goes on.

As good as STORY is, my fear is that Macy’s will not be willing or able to roll out these ideas to all of its stores, even in diluted form. Macy’s has a habit of having good ideas but not executing them properly. I hope this proves the exception rather than the rule.

Art Suriano
BrainTrust
I think STORY has a great concept and no doubt they have a niche audience. How that will impact Macy’s is hard to say. I can’t imagine Macy’s attempting to remerchandise their stores every eight weeks with a new design and layout. However, they might take a section and create a STORY store within Macy’s. That could work and allow STORY to maintain their same concept. What I find interesting is that retailers are making all these investments today in an attempt to create a better in-store experience, and yet the one thing most of them lack is having enough in-store staff that are well trained and know how to put the customer first. The need to do a better job of staffing stores is very apparent. Too many retailers ignore it. So STORY is another idea and if done will could lead to some enthusiastic customers but if Macy’s would remember who they are as a department store and invest in staff, they’d be surprised on how much business they would do.
Lyle Bunn (Ph.D. Hon)
Guest

This points to one of the newest and most exciting initiatives in retail and branding we’ve seen in a long time. Experiential retailing that provides information, context and develops the consumer aspiration with the promise that their dreams can be fulfilled is the essence of shopper value. For too long retailers have been eating around the edge of the experiential cookie with merchandising and promotional display, all the while with a focus on selling versus satisfying. STORY is a huge leap forward and this warrants watching carefully as analytics drive optimization.

Paula Rosenblum
BrainTrust

I really like this idea. I have said many times that department stores have become a very dated shopping experience. I believe the STORY acquisition is the first step towards merchandise presentation by lifestyle rather than by “department.” Nobody buys by department very often. They want curated assortments that match their tastes.

As for the notion of scale, well … it had better scale because otherwise, in my opinion, department stores are dinosaurs that will eventually become extinct.

Lee Kent
BrainTrust

Yes, Paula, it says that Macy’s is taking experience seriously and to the next step. Having cut my teeth on Federated, I have always had a soft spot for them and the department store. So I am a cheerleader and this appears to me to be a smart move. Kudos Macy’s and my 2 cents.

Ricardo Belmar
BrainTrust

Conceptually, this is a brilliant move by Macy’s that commits them to experiential retail at scale. The challenge is, as always, in the execution which historically is quite a difficult challenge for Macy’s to overcome. In recent years they’ve not been lacking for great ideas, but have suffered when it comes to executing at scale across all stores. I think the key here is what influence Rachel will have internally at Macy’s given her experience executing experiential retail and, equally important, working with other brands to collaborate in building and curating the experiences and products. This could even include securing outside funding sources when necessary. It will be very interesting to watch this develop! I’d also be interested to know the financial terms of the deal to see how much of a premium investment this is for Macy’s.

David Weinand
BrainTrust

I know most of the coverage STORY gets is about the experience it creates. What I actually find more impressive is that STORY has been able to get large brands like GE and Blue Cross/Blue Shield to pony up money to actually pay for the curated experiences. As Macy’s continues to roll out its Market concept, I think Rachel can essentially turn that into a rolling story (since the vendors are only there three to six months at a time) that a big brand will pay to be a part of. Lot’s of opportunity here.

Bob Phibbs
BrainTrust

I fear Macy’s will do to STORY what they did to Marshall Field’s. Everything STORY was about was new, ever-changing and with a deliberate point of view — Macy’s is mostly beige. Fingers crossed.

Jeff Sward
BrainTrust

What Macy’s did to Marshall Field’s they also did to Bullock’s, Burdines, Filene’s, Hecht’s, Wannemaker’s, etc. That was the whole point. Poof — we are now a national chain. Whoops, too cookie cutter. STORY is now a (tiny) platform to regionalize, localize, differentiate. “My Macy’s” didn’t make it happen. Hopefully lesson learned.

Craig Sundstrom
Guest

FTR:, Wannamaker’s was out of business — both as a company and a nameplate — long before Macy’s acquired it (or rather what was left of it).

Georganne Bender
BrainTrust

Chicago is still mourning Marshall Field’s.

Shawn Harris
BrainTrust

The opportunity here is to scale STORY’s presence, not attempt to create a new attraction within the existing box. However, I fear it will be the latter. We’ll see, and congrats to Rachel!

Georganne Bender
BrainTrust

The first thing that comes to mind is how very different STORY is from Macy’s. I like that Rachel Shechtman is going to Macy’s as its brand experience officer, but I wonder if her reach extends past STORY-like departments on Macy’s sales floors. Will she truly be given the freedom to shake up the Macy’s experience?

Rachel will be fighting 159 years of “We’ve always done it this way” tradition. She is a brilliant woman and I wish her the best. Watching Macy’s embrace the STORY perspective will be fun to watch.

Rich Kizer
BrainTrust

Excellent move! Creating innovative experiences in-store creates customer emotions. And emotions create purchases. Rachel has proven she gets it big time! Wonderful move, now give Rachel the freedom and authority she needs and sit back and enjoy the show!

Dick Seesel
BrainTrust

A good opportunity for Macy’s to reinvent the store experience, although I share other panelists’ doubts about the company’s ability to scale it up. This requires a cultural change brought in from the outside (instead of being developed internally), and also requires the buy-in of field management to execute it properly. But at least Macy’s recognizes that the Backstage rollout isn’t the only solution to their problems!

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
1 year 3 months ago

This is a masterful stroke by Macy’s CEO Jeff Gennette to inject a live experiential lab into their stores. Operational challenges aside, the opportunity to have dedicated space that changes the entire theme every four to eight weeks can emphasize the brand’s leadership and heightened relevance with their customers.

STORY will help Macy’s refine how it creates its overall brand experience and introduce much needed flexibility in engaging shoppers. There’s a lot to learn and it is much more than skin deep with potential to improve cross-departmental coordination, store resets, overall visual merchandising and inventory management. But the real upside is the infusion of fresh DNA — business thinking and doing — to the Macy’s brand.

Lee Peterson
BrainTrust

For the life of me I don’t get this one from Macy’s point of view — I get it from Rachel’s though, she just got paid! What STORY does and has always done is what department stores should’ve been doing all along! They got away from it because Lundgren thought they could be mass merchants but, in fact, it was department stores that used to tell stories about brands and ideas and they were the best at it in their heyday. So in essence, Macy’s bought STORY (Rachel, really) to help them do something that they invented. How far down the long black road are you to do something like that? But good for you, Rachel, I can’t wait to see your next idea when you’re done beating your head against the wall.

Rebecca Fitts
Guest

This is big for Macy’s and there have been many other large institutions who have looked at the model and thought about how to re-create it. I have no doubt that Rachel can scale STORY and perhaps give each STORY a sense of place. I think the question will be, is the Macy’s customer interested in this? And if they aren’t, how do you make it interesting to them? Perhaps it’s just what Rachel can bring to the team at Macy’s in the realm of store experience that is most valuable.

Brian Kelly
Guest
1 year 3 months ago
What Macy’s, Inc did to regional department chains was to make them fit the Macy’s, Inc store portfolio — as Macy’s the mid-tier store. Regionally, those stores were much more than mid-tier; they were both Bloomies and Macy’s. Take away Bloomies, and Macy’s selling model is meh. Macy’s, Inc was buying doors for the perceived efficiencies of a national Macy’s selling model. It’s just not relevant nationally. The acquisition of Story is different. In this case, Macy’s wants the selling model of Story to influence Macy’s. It’s cultural versus real estate. And therefore it is much more difficult. Which might make one wonder, “Where did another stale brand acquire a “hot” specialty brand for equity transfer and succeed?” Sears bought Lands’ End. Charming Shoppes bought Lane Bryant. What are your examples? In most cases, this doesn’t work because the owner of the master brand does not really understand its customer, therefore the equity is never relevantly transferred to the selling model. Why we like to say, “retail ain’t for sissies!”
James Tenser
BrainTrust
This is an exciting development. STORY founder and CEO Rachel Shechtman is a remarkable talent. She gave an impressive presentation at the Global Retailing Conference in Tucson a couple of weeks back. Senior Macy’s execs were in attendance (but not Mr. Gennette). She’s an exceptional creative force, but translating the STORY concept into something that can be reproduced across a large chain will not be a trivial undertaking. As she explained, STORY is not a “pop-up” concept, despite headlines that have appeared elsewhere. It’s a fixed retail location that presents a completely original merchandising concept every few months, each sponsored by a brand or a group of brands. It makes money on the sponsorship, not on product sales. Will be interesting to see how this gets translated at Macy’s. I think it might be helpful to think of STORY as an in-store media channel, rather than a merchandising concept. It’s possible that repurposing excess space for this “experiential” concept may bring in more sponsor revenue than the same square footage could generate from conventional merchandise… Read more »
Craig Sundstrom
Guest

“[C]hanges its store layout and merchandise every four to eight weeks” sounds like the LAST thing one would want in a store that increasingly offers self-service (or as some would argue, “no service”).

I’m not going to criticize this move beyond what I’ve done already, but this sounds like someone had to use up the acquisitions budget before it ran out. Most of Macy’s moves, while not fully complementary with the current operation(s), nevertheless offer a learning experience … I struggle to find one here.

Tom Dougherty
BrainTrust

Finally. Macy’s looks to the future.

Kudos to that. But, most of the iceberg is underwater and they need to reinvent the retail model. If they don’t, this might just be lipstick on a pig.

Shelley E. Kohan
BrainTrust

Rachel’s concept of STORY is brilliant and she is the quintessential marketer who has always pioneered the branding experience. She stays ahead of technology and in front of trend so it is not a wonder that her concept is a success. Macy’s is lucky to have such extreme talent. The challenge for Macy’s is scale and execution (as noted already) but also the legacy management structure which prevents the company from being nimble. Jeff Gennette should be applauded for this brilliant move, but Macy’s needs to be able to give the autonomy to Rachel’s team to continue to act in ways that foster nimble, innovative thinking.

Brandon Rael
BrainTrust

Experiences are everything!

This is a big step, at least perception-wise, by Macy’s as they look to capitalize on the experience first, and shared economy model. While I do believe that the STORY concept will resonate very well within the cosmopolitan areas, it may not be as relevant in the traditional shopping malls. Innovation is the key to retail

Macy’s would be wise to position their iconic store locations as the “product,” with even more curated assortments, to become inspirational community gathering spaces.

Let’s see how this plays out! I will be checking things out once things are rolling.

Mike Osorio
BrainTrust

This is a brilliant acquisition and testament to Jeff’s commitment to recreate the department store experience at Macy’s, particularly to attract Millenials and Gen X. The key is to think about “scale” differently here vs. the traditional idea of putting a hot concept into every store in the portfolio. With Macy’s modern ability to use customer data analytics they will be able to help Rachel curate “Stories” appropriate to the customer mix in each store in which one is opened. This will likely mean developing a number of concepts that can be mutliplied across dozens of locations, but not the entire chain. A store in San Francisco should (and must) have a different “Story” than a store in Miami or Chicago or a smaller suburban location. I am excited to see this idea move forward.

wpDiscuz
Braintrust
"I believe the STORY acquisition is the first step towards merchandise presentation by lifestyle rather than by department."
"I fear Macy’s will do to STORY what they did to Marshall Field’s."
"Rachel will be fighting 159 years of “We’ve always done it this way” tradition. She is a brilliant woman and I wish her the best."

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