A bright red lipstick-shaped phone charger, a pizza cutter in the form of a bicycle, and a headphone stand that looks like a heavy metal fan’s devil horn sign are hardly the kind of fare you’d expect to find at Macy’s. (M)
And that’s precisely the point for the department store chain.
Macy’s is selling those quirky products among the 400 items showcased at its brand new Story At Macy’s themed shops, which launch at 36 of its stores on Wednesday. The Story at Macy’s spaces will change themes, looks, and product lineup every six to eight weeks. That’s a radically different approach from how Macy’s—and pretty much all larger retailers—typically operate, with long lead times and predictable merchandise.
“When you think about department stores in general, they’re very much about intent, a consumer going to the store for a specific thing,” Macy’s brand experience officer Rachel Shechtman told Fortune on an exclusive preview last week at the 1,200 square-foot Story At Macy’s in its Short Hills, N.J. store. “This is where you find what you weren’t looking for but what you wanted.”
The first theme, through late June, is color, and coming down the escalator from the second floor in Short Hills to the Story space, the shop popped with brightness next to the humdrum presentation in other parts of the store. Shechtman wants Story At Macy’s to be an “evergreen gifting destination” as she puts its. Other products on offer in the inaugural Story installation include a bicycle repair kit in a bright red metallic box, a sneaker cleaning kit, Levi’s denim jackets kids can personalize, Crayola socks and reusable straws, and individual palettes by cosmetics maker MAC, something it has previously only sold to professionals.
The idea is for shoppers to want to pop into Macy’s to go see what’s new at Story and be surprised by new items, and buy something knowing it might be not there on their next visit, as opposed to the same stacks of sweaters and socks they’ve seen for years. Upscale chains are doing this too: Nordstrom (JWN) has operated small “pop-in” shops, and more recently Macy’s Inc’s Bloomingdale’s has adopted the practice, too.
“Bricks and mortar retail can no longer just be transactional,” says Macy’s CEO Jeff Gennette. “We need to increase ‘experience’ and with that, frequency of shopper visit.”
Go Faster
The launch comes at a time Macy’s is struggling to keep its sales growth going—comparable sales rose a modest 0.7% during the recent holiday season quarter—and the company told investors not to expect much better this fiscal year.
It’s clear that 36 boutiques averaging 1,500 square feet (the Story at Macy’s Manhattan flagship will be 7,500 square feet in size) will not move the needle sales-wise for a retailer with 600 stores that are typically 100,000 square feet. But sales directly linked to Story are not even the goal. (The company has not said how many stores will eventually have a Story shop.)
For Gennette, who became CEO two years ago and quickly moved to cut some of Macy’s notorious bureaucracy, the idea is to speed up the metabolism across the company. Gennette says not long ago it would have been unthinkable for Macy’s to get such a concept off the ground this quickly to this many stores. “We’re operating at much faster speeds than we’ve operated before,” he says.
At Story at Macy’s, which has 270 dedicated staff, employees have been trained under the “Know + Tell” approach which teaches staff to do everything from building fixtures to putting on events, something that will be an anchor to all Story iterations. And that will be key to minimize the time when Story at Macy’s goes dark between installations, a period that could run five to seven days for the first few changeovers.
And while Story is managed separately (for instance, Macy’s chief merchant has no role in choosing the merchandise), all staff can apply to take part in Story initiatives and training, the idea being for Macy’s at large to learn new processes from Story’s faster operations.
The inaugural Story at Macy’s comes a year to the week that Macy’s bought Story, a 2,000 square-foot retail store in New York’s Chelsea district that has garnered a cult following, and hired Shechtman to be its Brand Experience Officer, a role it created for her. That location has now closed, a decision taken by Shechtman herself.
Shechtman, who appeared on Fortune’s 2013 40 Under 40 list, was better known as a branding expert than a retail guru when she founded Story in 2011, borrowing money from two friends. Eight years earlier she had founded Cube Ventures, a consultancy that had A-list clients like Gap and J.C. Penney and she has served on the boards of the National Retail Federation and of e-commerce stars like Birchbox.
Part of what made Story so successful was that it allowed big brands to harness information on what works and what doesn’t on a small scale. Target for one used a Story collaboration in 2014 to show its merchants different ways to mix product categories. Other sponsors have included American Express, and health insurer Cigna for a wellness installation.
“It presents us an opportunity to present MAC in a different way to the consumer,” says Chris Good, group president for North America at Estée Lauder Cos’, MAC’s parent company. In particular, Good said, MAC will paying close attention to shopper reactions to efforts to personalize its products, as it is doing with the customized palettes.
The Story at Macy’s will help brands test something at 36 Macy’s before rolling it out to rest of the fleet. The Levi’s kids assortment for instance, will serve as a foretaste to a larger assortment coming in summer for the back-to-school selling season. As for Crayola, which has never before sold products at Macy’s, the Story At Macy’s is “a way for them to flirt with us before dating us” as Shechtman puts it jokingly.
Shechtman, 42, is also now in charge of The Market at Macy’s, small areas at 12 Macy’s stores aiming to showcase what the retailer deems to be more special products, an initiative launched two years ago to shore up its “fashion authority” but that Gennette feels needs work before expanding.
Though the original Story location is slated for closing, with 43 “Stories” under her belt, Shechtman says she has a lot of insights to tap into as she prepares the next Story At Macy’s iterations. “It’s become a destination,” she says. “It offers versatility, but having a point of view is key,” Shechtman adds.
And that is at the core of Macy’s efforts to stand out more in this cluttered retail environment.
