Macy’s Launches Small-Store Format to Appeal to New Customers

Macy’s department store has launched Market by Macy’s a new small store format designed as part of the retailer’s omnichannel platform. Macy’s is strategically rolling out these stores to appeal to a new customer base and to create a new in-store experience.

“To position our business for long-term success and best serve our existing and new Macy’s customers, we are focused on building a comprehensive omnichannel ecosystem, consisting of best malls, new off-mall locations, and robust digital properties,” Joe Hodge, senior director of real estate at Macy’s, tells GlobeSt.com about the impetus to launch the new brand of stores.

According to Hodge, the stores will paly a significant role in the retailer’s future. The stores, he says, will lay the “groundwork for a multi-year pathway to scale up the format.” The stores will have a cultivated experience throughout. “Market by Macy’s stores will feature the best of the best of Macy’s brands, constant newness and edited selection of the latest trends, key staple items and localized offerings,” says Hodge. “Market by Macy’s stores will be imbedded in the community and focused on convenience, style guidance and local events.”

In addition to driving consumer demand and evolving to meet the new retail experience, the store format also has significant real estate benefits. “Market by Macy’s provides us a format to meet multiple use cases,” says Hodge. “It is a concept that we can use to backfill a trade area when a mall closes, or gap fill an area where we have loyal customers without convenient access to one of our mall locations.”

These stores will also diverge from the standard Macy’s format in that they will not be located in malls, which has historically been the strategy to drive traffic to the retailer. “Traditional A and B malls are still very large foot traffic drivers, but we have opportunity to also serve customers in a more convenient community footprint,” says Hodge. “This off-mall Market by Macy’s concept will be placed in regional power centers in the path of our customers daily lives, providing the potential to gain additional customer interactions as they navigate to work, school and home.”

However, the firm will still target locations with strong foot traffic. “We are focused on strategic, dynamic regional power centers with high foot traffic counts and greater than 250,000 square feet. Centers in trade areas with 200,000 plus population within a 15-minute drive time and strong daytime population (office parks, hospitals and schools),” says Hodge, adding that it will seek co-tenants in a mix of retail and restaurants as well as locations within five miles of a regional mall where Macy’s already has an existing presence.