For years, department stores like Macy’s and Marshall Field’s were what Columbia University retail scholar Mark Cohen calls “emporiums filled with endless wonderment and tremendous assortments.” They graced the downtowns of U.S. cities with grand 19th Century architecture and amenities that were then state-of-the-art, like lighting, elevators and dressing rooms.
But wonderment has been replaced with workaday one-story buildings in many places, anchoring shopping malls in a sea of parking lots. Macy’s had a large part in that, gobbling up local and regional stalwarts to fuel its own growth, all the while ceding market share to specialty retailers in electronics, home goods and, these days, beauty. The magical potential of the department store that was made indelible by the 1947 movie “Miracle on 34th Street” — the story of a cynical little girl who found joy in life thanks to a Macy’s Santa Claus — has largely been replaced by racks and racks of mostly apparel, sales of which have been driven mostly by discounts.
And then there was the problem of too many stores. Macy’s is almost done correcting its over-acquisition of locations, likely shuttering the last of the 100 slated for closure in coming months, but that hardly fixes everything. With off-price retailers drawing away customers with their own treasure hunts, top labels departing to protect their brand equity and e-commerce upending how people shop, few have envisioned anything close to a department store comeback.
Still, thanks to a new partnership with retail-experience startup b8ta and the acquisition of retail-concept Story, Macy’s may just have a chance.
“Win, lose or draw, these two deals by a large traditional incumbent like Macy’s mark a watershed moment in the history of retail and show enormous courage on the part of Jeff Gennette and the team at Macy’s,” retail futurist and author Doug Stephens told Retail Dive. Stephens discussed both companies in his recent book, “Reengineering Retail: The Future of Selling in a Post-Digital World” and, in recent months, with Macy’s executives.
The former Nest employees who started b8ta two years ago, including CEOVibhu Norby, believe companies need physical space to allow customers to engage with their products, something that is particularly true of the electronic gadgetry that has streamed into stores from various brands and startups in the past two years.
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