Macy's Big Gamble on Contemporary Apparel May Make It a Serious Contender
When the going gets tough, the tough get competitive. Just look at the once-flagging Macy's (M). The department store chain is using serious management muscle to claim a space in the hearts -- and wallets --of young fashionistas with a penchant for of-the-moment style and not much cash in hand. But can Macy's really win the game against the likes of established recessionista retail darlings such as H&M and hauter hives of style like Barney's? Macy's chief merchandising officer Jeff Gennette is betting it will.
Gennette told WWD: "In 2011, we are going to layer on quite a bit of volume and we have a three-year strategy to make it a very meaningful business." Indeed, the plan is not only to push designer collaborations a la Target (TGT) but to reinvent the contemporary sportswear shopping experience with in-store "Impulse" departments anchored by a private brand venture called Bar III. The Bar III concept will also have its own pop-up shop in Manhattan's hip Flatiron district.
The Impulse spaces will be replete with sleek, minimalist fixtures and feature both men's and women's clothing and accessories. Price points will range between $20 and $400, directly hitting the market segment (think 18- to 30-year olds) who buys above fast fashion, yet below high-end designer brands.
The threads will include capsule collections for coveted designers. You'll remember back in October, I reported on Macy's first such collaboration with Kinder Aggugini. The London-based Italian designer's apparel is set to hit those Impulse racks in a couple of weeks. Much has been made of Aggugini's relatively obscure status in the States, but Macy's murmuring about adding other, higher profile designers to the portfolio including Karl Lagerfeld (the Kaiser's collection for H&M was a sell-out smash success).
If Macy's can pull off the marketing, these collaborations may be the key to future success converting this market segment into loyal customers. Aggugini's debut will be heralded with a gust of social media but Macy's needs to be just as adept at creating and reacting to a viral buzz the way Target (TGT) does in the weeks leading up to the launch of its new collections.
This is just as important to the overall strategy as sourcing, manufacturing and shipping. Macy's buyers have been tasked with keeping on top of trends and what better way to do that than via Twitter and Facebook? Macy's is smart to use more domestic production and calculated inventory holds, but the team must stay in step with social networks to see how consumers are reacting, not to mention help push them into the stores for a live looksee.
As Macy's sales and comps continue to gain momentum, management would do well to keep their eye on e-commerce as well. Online sales were up over 28 percent in 2010 and the retailer's latest investment in an omnichannel approach to encourage customers to shop seamlessly in stores, online and via mobile, can only further expand the buying base for its new offerings.
Macy's cautious approach to the Impulse concept which will only be launched in approximately 200 out of 850 of its stores is fine on the street, but let's not forget that fashionable people live everywhere. And they'll be just as eager, if not more than their urban counterparts, to get their hot little hands on cool threads they can't buy at the local mall.
Image via Macy's courtesy photo
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