Starting in next year's first quarter, Macy’s will have a new CEO to take on struggling sales and address the greater challenges surrounding the way people shop. Macy's current chief executive, Terry J. Lundgren, will step down and cede the top spot to the company's current president, Jeff Gennette. Lundgren will stay on as executive chairman while Gennette looks to revive the department store’s brand. This is no easy task considering the rise of challenges created by e-commerce competitors like Amazon.com as well as discount chains such as T.J. Maxx and Marshalls.
“Now is the time to reset our business model to thrive in a future that's being driven by rapid evolution in consumer preferences and shopping habits,” said Lundgren in a recent statement.
According to a New York Times article, Macy’s will continue to offer aggressive promotions in hopes that its brand will stay on consumers’ radars. Gennette says he would also like to continue building collaborations with other brands. For example, Macy’s leases space to companies like Men’s Wearhouse, Finish Line, and Sunglass Hut. These brands all operate separate stores within Macy’s locations, giving the department store more versatility.
Another opportunity that could provide a much-needed boost to Macy's is the upcoming back-to-school (BTS) season. Market Track reviewed data from its Shopper Insight Series Survey to shed more light on consumer behavior during this key period. According to the survey, shoppers plan to spend 79 percent of their BTS budgets in-store. When broken down further, 10 percent said they would do most of their BTS shopping online, while department stores like Macy's are very close behind with 9 percent saying that's where most of their shopping will occur.
Furthermore, 52 percent said lowest prices on majority of items is the most influential factor in deciding where to shop for BTS. Macy’s will need continue to stay competitive with other discount clothing retailers to capture buyers in this segment. Meanwhile, 24 percent said the ability to buy the most items in one trip was the biggest influence on where to shop. This tell us that Macy’s brand partnerships may succeed in bringing consumers in and keep them spending in their stores.
Ryne Misso is the director of marketing at Market Track, a provider of market intelligence solutions based on comprehensive analysis of the advertising, promotional and e-commerce landscape.
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