Go Where the Consumers Are!

A proposal for retailers to move out of the desert
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Posted January 11, 2017

The post-holiday announcement by Macy’s of the planned layoff of 10,000 employees, 6200 of which are management positions, and the closure of 63 Macy’s stores this spring, seems to have made everyone sit up and listen. I think this will be interesting to watch, mainly  because Macy’s, under the leadership and guidance of Terry Lundgren, navigated the recession better than any other department store during the Great Recession, focusing on strong initiatives like the development of My Macy’s – a buying program for product localization – and retooling their operations to merge in-store and online inventory access facilitated through a comprehensive buy-online-pickup-in-store (BOPIS) service model.

It may be criminal to say this, but this feels like it will ultimately be “a good thing” for Macy’s. How? Because Macy’s, like so many other large retail organizations, is burdened by legacy systems, waylaid by a complexity of internal departments cum fiefdoms, with traditional processes that prevent it from being as nimble as “the little guys,” aka online retailers or startups. A big part of that legacy will naturally reside with the management team.

This focus on eliminating 17 percent of its management seems to indicate that Macy’s is determined to get nimble, however, or at least start nudging its way in that direction. It is a big ship to turn around, after all. And a very hard decision, I’m sure, but obviously one that is critical for the business’ survival. I say this because it is precisely the pattern of “doing business as usual” that will kill retailers. New blood is needed for the infusion of new ideas and new strategies.

As off color as it was, I still vividly remember the skit by comedian Sam Kinison about world hunger. His message was, “Don’t send them food, send them U-Hauls.” In it, he quickly rolls into his signature delivery style, screaming, “You live in a desert, and nothing grows in the desert. Move to where the food is!” Now, I don’t subscribe to the message in his skit, but the premise bears an amazing resemblance to the plight of retailers today. Retailers must develop new ways to reach their audience and find new sources to expand their consumer base. Retailers must be where their consumers are. And it must be recognized that online is not always the answer.

I was recently having a conversation with someone involved with digital storefront window displays. Obviously his focus is the integration of an interactive digital interface at the storefront exterior as an enticing element for the store interior environment. I challenged this strategy as a myopic view of the potential for the digital product. I posited that an interactive digital interface could be located strategically within aligned businesses in order to provide convenience and value to shared or complimentary consumers. Further, this could manifest in both digital and analog formats, whichever is most appropriate for the brands involved and the physical space available.

Regarding analog formats, recall the Vilebrequin swimsuit vending machines located poolside at The Standard Hotel in Miami or the partnership between the St. Regis Bal Harbour Resort and Neiman Marcus, who has a newly remodeled store in close proximity at The Shops at Bal Harbour, to offer the Neiman Marcus Closet at The St. Regis Bal Harbour Resort. The latter example could easily become a hybrid of old-fashioned visual display window with digital interface within a hotel to cater to travelers’ unexpected (or forgotten) fashion needs.

So in my mind, the path for Macy’s (as today’s example), in its most simplified form is two-pronged: internal and external. The internal retooling of its management will allow for new strategies to be formulated without compromise and acted upon undiluted for maximum impact. The external satellite manifestations – again, either digital or analog – will be critical to remain top of mind with consumers, to provide value and convenience and to truly be where the consumer is.

Kathleen Jordan, AIA, CID, LEED AP, is a principal in Gensler’s New York office, and a leader of its retail practice with over 24 years of experience across the United States and internationally. Jordan has led a broad range of retail design projects as both an outside consultant and as an in-house designer. She has led projects from merchandising and design development all the way through construction documentation and administration, and many of her projects have earned national and international design awards. Contact her at kathleen_jordan@gensler.com.