Drexel design and merchandising professor Alphonso McClendon walked through the small, colorful space at the Center City Macy’s on Wednesday, taking it all in.
There was a 500-piece puzzle of a succulent garden for $15.99 and an $18 basil growing kit. There was also a $17 “Bad Ideas” journal and $18.50 “Stay Woke” mug along with $2 bracelets and $100 headphones.
McClendon has been researching how retailers are responding to the changing shopping landscape to provide customers more of an experience. In the past, he said, stores could just display products. Now, they need to entertain and educate customers at the same time.
The section he was walking through was Story at Macy’s, a narrative approach to retailing, as the name suggests, which launched Wednesday in 36 stores across 15 states. The offerings at the Macy’s in Center City included more than 400 products from small businesses and major companies, such as MAC Cosmetics, Crayola, and Levi’s Kids.
In a brazen bid for foot traffic, Story at Macy’s also presented socks in a beer can, bath bombs, a silk pillowcase, a paint chip poetry card game, a collapsible cup, a luggage tag that doubles as a charger, a “Unicorn Snot” glitter gel, and a book on nutrition.
The store-in-store concept comes as Macy’s and other retailers are facing stagnant or falling sales in their brick-and-mortar stores as consumers increasingly migrate to online shopping.
"I don’t think physical stores are dead, but as more routinized purchases are made online, people are going to seek more reasons to go into the store,” said Barbara Kahn, a marketing professor at the University of Pennsylvania’s Wharton School.
Last year, Macy’s Inc. acquired Story, the New York City-based concept store that changed its design and products every few weeks so customers were continuously discovering new items.
The first theme at Story at Macy’s is “color,” bringing customers a rainbow assortment of products and events. Crayola will be hosting workshops, including creating custom patches with fabric markers for Levi’s Kids denim jackets and T’s, the company said in a news release.
Macy’s plans on doing five to six theme changes a year, and Story at Macy’s does not have an online shopping option at this time. This first theme is scheduled to last through June 26.
“The Story at Macy’s experience feels a lot like a real-life version of scrolling through Instagram," Rachel Shechtman, founder of Story and now Macy’s brand experience officer, said in the news release.
In Philadelphia, McClendon said more young professionals are moving in, and the city is responding with commercial and residential development. Philadelphia-based PREIT and Macerich of Santa Monica, Calif., have teamed up to redevelop the former Gallery into the Fashion District, spanning three city blocks and comprising 838,000 square feet of retail, all scheduled to launch in September. There’s also the Collins project at 11th and Chestnut Streets, with rental units and retail space, among other development.
“The new generation wants small, unique experiences that are curated,” McClendon said. This space at Macy’s will contribute to what he called “a more hip, edgy East Market.”
For Macy’s Inc., a Cincinnati-based department store company, Story is more of a way for the department store to change its image, said David Swartz, an equity analyst at Morningstar Research Services LLC., who visited the space at Macy’s State Street in Chicago, where his firm is based.
Story at Macy’s, Swartz said, seems like a way to generate interest in the department store and increase foot traffic. Even if customers don’t buy products at Story, they may continue throughout the store and find something else.
“It’s a little, tiny part of a department store,” Swartz said, describing the 1,400-square-foot Story. “The sales that they get from Story will be immaterial. The benefit to them is that it could attract people to go in more often. … The problem is people don’t go to department stores as often as they used to."
Macy’s Inc. operates Macy’s, Bloomingdale’s, Bloomingdale’s the Outlet, Macy’s Backstage, and Bluemercury. There were 649 Macy’s stores at the end of 2018, compared with 673 in 2016, according to the company’s latest annual report.
In comparison, there were 55 Bloomingdale’s and 163 Bluemercury stores in 2018, the report states, totaling 867 stores for the company.
Macy’s has launched initiatives to improve its stores, such as a virtual reality roll-out and a “Growth 50” strategy, investing in 50 stores across the country with infrastructure improvements and customer-service enhancements.
However, there are many other things Macy’s needs to get shoppers back to its stores, said Neil Saunders, managing director of retail at research firm GlobalData. The company’s stock hit a high in August of $40.54 a share but has since dropped; the share price closed Wednesday at $24.76 a share.
Total net sales growth for Macy’s year over year were negative 2.5 percent; comparable sales growth year over year, for owned stores only, eked out a 0.4 percent increase, Saunders outlined in a February note, calling the company’s pace of advancing “glacial."
During the holiday season, for example, Saunders wrote that the stores had “virtually no holiday cheer and were crammed full of boring merchandise. This unpleasant and uninspiring shopping environment meant Macy’s lost out on footfall and sales."
As far as Story at Macy’s, Saunders said, “It’s a step in the right direction, but it doesn’t win them the race.”
These Macy’s stores are getting Story: