A high level overview of the retailer's new strategy.
Strategy Summary
In February 2020, Macy’s unveiled a 5-part business strategy called Polaris in the hopes of turning the tide against slumping sales as traditional retailers continue to struggle. From a high level perspective, their goals are to “strengthen consumer relationships, curate quality fashion, accelerate digital growth, optimize store portfolio, reset cost base,” with more detailed actions within these categories below. (Source 1) (Source 2)
Macy's updated its rewards program, Macy's Star Rewards Loyalty to increase the engagement of occasional Macy's customers and to bring new customers into the brand.
To diversify its products and elevate the brand, Macy’s invested in four high-margin private brands, valued at $1 billion.
Macy’s plans to capitalize on digital growth by investing in websites and mobile apps.
After conducting a "rigorous evaluation" and audit of the Macy's store portfolio, the company decided to close 125 of its underperforming stores over the next three years. Moving forward, Macy's plans to expand off-price stores including Macy's Backstage and Bloomingdale's The Outlet, both of which have been bright spots in the company's earnings reports in recent years.
In addition to store closures, Macy’s consolidated its corporate offices in New York and closed locations in San Francisco, Cincinnati and Lorain, Ohio.
In a horrible year for Macy's, during which the pandemic decimated its already struggling business, one big source of relief for the department store operator came from its e-commerce operations. (Source) Already a top 10 digital retailer, Macy's now says it can get to $10 billion in digital sales within three years, up from about $7.6 billion in 2020. It lags behind only Amazon in online U.S. shoe and clothing sales. The company will hit this milestone by widening its online assortment with more styles and sizes than it carries in stores, having the brands Macy’s sells ship more items directly to customers, adding more brands and product categories, and using its stores to an even greater degree to help it fill orders.
Another benefit to Macy's e-commerce push: It will reduce the chain's reliance on clothing, one of the hardest-hit parts of consumer spending during the pandemic, and allow it to expand its research in growing areas like home goods and beauty.
Finally, Macy’s plans to open small, freestanding shops in affluent suburbs. Instead of relying on malls — and their food courts — to draw customers, the new stores will draw in shoppers with upscale brands like APL and Billy Reid, beauty stores-within-a-store and a locally-sourced café. (Source) Market by Macy’s promises a curated selection tailored to local tastes, plus in-store experiences that can’t be replicated online, such as wine tastings, book signings and jewelry making classes. All of these features will be stuffed into roughly 20,000 square feet, or about 12.5 percent the size of a typical Macy’s department store.
However, these are just the stated steps and strategy. What has actually happened is a little different. Please visit the recommendations tab to learn more.
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