October 19, 2012
Macy’s Makes Millennials a Priority
Earlier this year, Macy’s announced a three-year plan to put itself in the position of becoming "the store of choice" for Millennials (consumers between the ages of 13 and 30). Among the planned changes were an improved fashion assortment and shopping experience.
Yesterday, Macy’s announced that it was making progress on the fashion front.
"We have identified Millennials as a priority customer for Macy’s, and we know that growing our relevance for this customer will start with product," said Jeffrey Gennette, Macy’s chief merchandising officer, in a statement. "Over this season and spring 2013, we will be introducing 13 new brands targeted to a cross-section of lifestyles, as well as growing those within our current portfolio that are already passion brands for this customer. This product investment and repositioning is the first phase of our Millennial strategy and will help strengthen Macy’s credentials and credibility with this customer by offering them newness, fashion and innovation across product categories and lifestyles."
The new brands includes an exclusive line of Marilyn Monroe clothes and shoes, Truth or Dare shoes designed by Madonna and a host of other items for both women and men.
"Macy’s recognized there was a significant area of opportunity within the Millennial generation," said Molly Langenstein, Macy’s executive vice president/group merchandise manager for Millennial. "In an effort to fill that white space, we used the results of extensive research to better understand the preferences of these customers, go out into the market and plan our assortments."
According to the Boston Consulting Group, Millennial women are drawn to fashion, spending a third more than female consumers 35 to 74. Millennial males spend twice what other men spend on clothing.
Christine Barton, a partner at Boston Consulting, told The Associated Press that department stores have an opportunity to grab share of the Millennial market, but they need to "refreshen their franchise."
Millennials, according to Boston Consulting’s research, are tech savvy, spend across a wide variety of retail outlets and are focused on speed and convenience when shopping.
BrainTrust
Recent Discussions
Discussion Questions
What will it take for Macy’s to connect in a meaningful way with Millennials? Are there other retailers to which Macy’s can look to for lessons?
Poll
It’s not going to happen. Not for Macy’s at least. It’s not to say they won’t capture some of this market’s attention, but to become the generation’s store of choice just isn’t realistic.
The problems lay on two fronts; first, Millennial women define loyalty as sticking with a retailer for 6-12 months. Unless a brand can continually fascinate and give new reasons to come back, the generation moves on to discover new things.
And that leads to problem number two. In the baby boomer generation, Macy’s and other large merchants could dictate fashion trends and we listened because we were mushrooms in the dark and didn’t know any better. How did we know what was popular in Japan or Singapore? We didn’t, but Millennials do. They’re connected (and in some cases better connected than Macy’s) to trends happening on the other side of the world.
Smaller, more nimble retailers will be able to keep up, shorten the supply chain and buy in small enough quantity to keep up with fast moving Millennials. A battle ship like Macy’s won’t. They’ll get a piece of the market every now and again, but own it? Not a chance.
Writing as the father of a 16-year-old girl, it is going to be a challenge for Macy’s to get Millennials into the store consistently. Not impossible, but certainly not easy (not that anything in retail is easy….). Girls/young ladies in this age group seem to like boutiques — they don’t want to buy what everyone else is buying or look like everyone else. Shopping at smaller stores like Forever 21 and Wet Seal helps them do just that. My advice to Macy’s (or Target, or any other big box or department store) is to have micro stores within their stores, separate and fully branded, that appeal to the apparel and, very important, accessory needs of this group. Boys/young men are a different story. They often don’t even care about size let alone style. This in itself causes some challenges, but they are more easily addressed than the ones for girls.
While I do not profess to be an expert on Millennials, I would think Macy’s is on the right track with carrying the right brands and mix that attract this demographic, but perhaps should also experiment with store design that facilitates a quicker and more ergonomic shopping experience, which is of particular importance to this group.
In addition, smaller format stores that specialize in just those brands and styles for Millennials could be a worthwhile investment, complete with digital signage, mobile payment, and other digital in-store touch points.
In my recent research focusing on Mature Millennials (older Millennials) I found the following relative to their use of technology for shopping purposes. Mature Millenials use the internet mainly to look for customer ratings and reviews, for product information, for comparison shopping, coupons and promotions, store information and to order online. More than Mature Baby Boomers, Mature Millenials use the internet as well for alerts about events and sales and easy payment options.
Likewise when it comes to Smartphone usage, the results are different from Mature Baby Boomers. Mature Millenials use more smartphones for different tasks, mainly for product price and information, store hours, directions and contact information, and for easy payment options.
Millennials load heavily on Facebook, LinkedIn and Twitter. In addition to the normal uses of these social networks, Millennials use these networks to get advice on products and services as well as to complain about faulty products or bad service.
Macy’s — and any other retailer focusing on this generation — needs to tailor their marketing and communications strategies to reflect the technology usage of this generation.
Great plan, but Macy’s needs to make purchasing discounted products easier. Kids can’t do it. They need to be with their parents because Macy’s requires all sorts of stuff to get discounts. They have Coupons, their Star Rewards program and their credit card. I always feel like I’m at the bank when I go to a Macy’s cashier. You need to show your loyalty card, pay with their Macy’s credit card (in order to get the next set of credits), and remember your coupon. And if you get a store credit, you have to carry around a receipt that shows the store credit and spend it before it expires. They just don’t make it easy to get the discounts. If you have your loyalty card, that should be enough. Macy’s needs to fix that.
It might start by hiring some Millennials to make key merchandising decisions. I mean, don’t get me wrong; nothing screams “MILLENNIAL” to me more than Madonna … but I’m just sayin’ there may be a better way to get at Millennials than through a superannuated “Pop star’s” idea of what looks hip on a young person. Instead of taking a fashion cue from Madonna — who after all is old enough to be the grandmother of a Millennial — maybe they ought to hire her daughter, Lourdes.
Fashion retailers seem particularly vulnerable to the “Declare your commitment to the largest demographic cohort and they will buy” school of marketing. Just because you can identify the largest potential feast doesn’t mean you get a seat at the table.
If Macy’s wants to understand the perils of of cross-generational merchandising, it ought to study Gap’s dark ages when some genius decided that kids wanted to wear clothes just like their parents.
I might be hanging on one word too closely, but I could not help but share this quote from Macy’s CEO Terry Lundgren from this article: “We just think we deserve to get a bigger share of that market.”
Is entitlement thinking now creeping into business? Don’t brands have to work to create and add innovation to their merchandising, product lines, promotional offers?
There is no reason that Macy’s cannot execute its strategy to capture the attention (and wallets) of Millennials, but let’s see them deliver the goods first.
It’s smart of Macy’s to connect with Millennials; as previously stated, they spend more on clothing purchases than other age groups. It could also ensure future customer loyalty if Macy’s continues to update their retail approach as this demographic ages. Macy’s should look to H&M, Joe Fresh and Forever 21 as they are targeted to Millennials and take a lesson of the social media campaigns that can take advantage of the tech savvy demographic.
As the parent of two Millennials, I’d suggest that drawing them into a department store setting is very difficult. They’re used to instant gratification and very focused venues like Hollister and Aeropostale, and the idea of having to navigate beyond the cosmetics and accessories departments seems foreign. It’s a worthy goal, though.
From experience, I can tell you that Macy’s is doing the right thing in the right way. My daughter — a millennial — married in September and it was a pure Macy’s wedding event. The groomsman, bridesmaids, and her gift registry all Macy’s. I asked my daughter about this; Why Macy’s? “Dad, they had everything we needed and my friends all love to shop there. They also found all the sizes we needed — some of the groomsman are bigger — but Macy’s found the stuff to fit them and make them look good.”
The key to her was that “they made them look good.” She, as most Millennials do, wanted style and uniqueness along with service. One person handled all the apparel planning, location and shipping.
So, Macy’s already is linking up with this crowd. Two years ago my daughter never shopped Macy’s. Now it is her main store and she is anxious to head for NYC to see the new Herald Square show department.
It is all about marketing, style, and service (the massive online/hard promo helps).
Macy’s is doing many things right these days — not only playing an impressive game of digital catch-up, but doubling down on training and staying the course on its groundbreaking My Macy’s localization effort. Macy’s biggest obstacle to becoming the “store of choice” for ANY customer is its spotty physical footprint. It simply is not an accessible brand for many communities. That’s where further developing its digital credibility will be critical, particularly when targeting Millennials.
Macy’s recent brandapalooza feels a bit too Penney’s circa 2009. If 2014 finds Macy’s paring down the brand portfolio and bringing Herald Square-ish shop-in-shops to other locations, they will be two years behind Penney’s.
Yes, other retailers can and should look at Macy’s for lessons. Macy’s is a multicultural retailer. It was one of the first, and continues to pay attention to the fast growing Hispanic, African American and Asian American consumers. These multicultural segments populate the majority of the millennial group. 2012 was the tipping point. More than 50% of all births in the US were multicultural and this trend will continue.
It’s interesting that the ages of 13-30 are cited. Then, in the comments, we are getting thoughts from parents of 16 year olds and from parents of a newly-wed (who I presume is older than 16!). And we get comments on girls/young women versus boys/young men. Anyone else think there might be BIG differences in shopping needs and patterns within this broad group?
Yes, Jonathan, I was thinking exactly the same thing: let’s slice the population up into arbitrary groups, see which ones we “deserve” to do better with, and issue a series of self-flattering press releases on how we’re going to conquer them. (And the grouping is even worse than lumping 16-year olds with 30 somethings: note the comparison to “consumers 35 to 74” … 74???)
Basically what I see here is a textbook strategy — define your customers by age, introduce new brands, promote heavily — that could have come from 1982 (or even 1882); that’s not necessarily a bad thing — and bad or good the size and format of Macy*s limits what can be done — but I just can’t get very excited about it.
Millennials are NOT ONE BIG GROUP, LIVING IN ONE LOCATION, THINKING ONE WAY. Niche baby! Niche!
The greatest challenge to Macy’s in attracting Millennials is generating and maintaining a level of personal engagement with customers consistently. Millennials want to engage with a company directly and authentically. For Macy’s, they will have to break down traditional silos to establish those lines of communication.
Don’t underestimate Macy’s ability to tackle this initiative. They have surprised many (including me) with the success of their “My Macy’s” localized content strategy over the last few years and I have found the experience in many of their locations to be significantly more engaging than in the past. This is an organization with both extraordinary talent at the senior levels, and a highly talented and engaged Millennial population of young execs helping them to make good decisions. I applaud them and predict continued success.
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It’s not going to happen. Not for Macy’s at least. It’s not to say they won’t capture some of this market’s attention, but to become the generation’s store of choice just isn’t realistic.
The problems lay on two fronts; first, Millennial women define loyalty as sticking with a retailer for 6-12 months. Unless a brand can continually fascinate and give new reasons to come back, the generation moves on to discover new things.
And that leads to problem number two. In the baby boomer generation, Macy’s and other large merchants could dictate fashion trends and we listened because we were mushrooms in the dark and didn’t know any better. How did we know what was popular in Japan or Singapore? We didn’t, but Millennials do. They’re connected (and in some cases better connected than Macy’s) to trends happening on the other side of the world.
Smaller, more nimble retailers will be able to keep up, shorten the supply chain and buy in small enough quantity to keep up with fast moving Millennials. A battle ship like Macy’s won’t. They’ll get a piece of the market every now and again, but own it? Not a chance.
Writing as the father of a 16-year-old girl, it is going to be a challenge for Macy’s to get Millennials into the store consistently. Not impossible, but certainly not easy (not that anything in retail is easy….). Girls/young ladies in this age group seem to like boutiques — they don’t want to buy what everyone else is buying or look like everyone else. Shopping at smaller stores like Forever 21 and Wet Seal helps them do just that. My advice to Macy’s (or Target, or any other big box or department store) is to have micro stores within their stores, separate and fully branded, that appeal to the apparel and, very important, accessory needs of this group. Boys/young men are a different story. They often don’t even care about size let alone style. This in itself causes some challenges, but they are more easily addressed than the ones for girls.
While I do not profess to be an expert on Millennials, I would think Macy’s is on the right track with carrying the right brands and mix that attract this demographic, but perhaps should also experiment with store design that facilitates a quicker and more ergonomic shopping experience, which is of particular importance to this group.
In addition, smaller format stores that specialize in just those brands and styles for Millennials could be a worthwhile investment, complete with digital signage, mobile payment, and other digital in-store touch points.
In my recent research focusing on Mature Millennials (older Millennials) I found the following relative to their use of technology for shopping purposes. Mature Millenials use the internet mainly to look for customer ratings and reviews, for product information, for comparison shopping, coupons and promotions, store information and to order online. More than Mature Baby Boomers, Mature Millenials use the internet as well for alerts about events and sales and easy payment options.
Likewise when it comes to Smartphone usage, the results are different from Mature Baby Boomers. Mature Millenials use more smartphones for different tasks, mainly for product price and information, store hours, directions and contact information, and for easy payment options.
Millennials load heavily on Facebook, LinkedIn and Twitter. In addition to the normal uses of these social networks, Millennials use these networks to get advice on products and services as well as to complain about faulty products or bad service.
Macy’s — and any other retailer focusing on this generation — needs to tailor their marketing and communications strategies to reflect the technology usage of this generation.
Great plan, but Macy’s needs to make purchasing discounted products easier. Kids can’t do it. They need to be with their parents because Macy’s requires all sorts of stuff to get discounts. They have Coupons, their Star Rewards program and their credit card. I always feel like I’m at the bank when I go to a Macy’s cashier. You need to show your loyalty card, pay with their Macy’s credit card (in order to get the next set of credits), and remember your coupon. And if you get a store credit, you have to carry around a receipt that shows the store credit and spend it before it expires. They just don’t make it easy to get the discounts. If you have your loyalty card, that should be enough. Macy’s needs to fix that.
It might start by hiring some Millennials to make key merchandising decisions. I mean, don’t get me wrong; nothing screams “MILLENNIAL” to me more than Madonna … but I’m just sayin’ there may be a better way to get at Millennials than through a superannuated “Pop star’s” idea of what looks hip on a young person. Instead of taking a fashion cue from Madonna — who after all is old enough to be the grandmother of a Millennial — maybe they ought to hire her daughter, Lourdes.
Fashion retailers seem particularly vulnerable to the “Declare your commitment to the largest demographic cohort and they will buy” school of marketing. Just because you can identify the largest potential feast doesn’t mean you get a seat at the table.
If Macy’s wants to understand the perils of of cross-generational merchandising, it ought to study Gap’s dark ages when some genius decided that kids wanted to wear clothes just like their parents.
I might be hanging on one word too closely, but I could not help but share this quote from Macy’s CEO Terry Lundgren from this article: “We just think we deserve to get a bigger share of that market.”
Is entitlement thinking now creeping into business? Don’t brands have to work to create and add innovation to their merchandising, product lines, promotional offers?
There is no reason that Macy’s cannot execute its strategy to capture the attention (and wallets) of Millennials, but let’s see them deliver the goods first.
It’s smart of Macy’s to connect with Millennials; as previously stated, they spend more on clothing purchases than other age groups. It could also ensure future customer loyalty if Macy’s continues to update their retail approach as this demographic ages. Macy’s should look to H&M, Joe Fresh and Forever 21 as they are targeted to Millennials and take a lesson of the social media campaigns that can take advantage of the tech savvy demographic.
As the parent of two Millennials, I’d suggest that drawing them into a department store setting is very difficult. They’re used to instant gratification and very focused venues like Hollister and Aeropostale, and the idea of having to navigate beyond the cosmetics and accessories departments seems foreign. It’s a worthy goal, though.
From experience, I can tell you that Macy’s is doing the right thing in the right way. My daughter — a millennial — married in September and it was a pure Macy’s wedding event. The groomsman, bridesmaids, and her gift registry all Macy’s. I asked my daughter about this; Why Macy’s? “Dad, they had everything we needed and my friends all love to shop there. They also found all the sizes we needed — some of the groomsman are bigger — but Macy’s found the stuff to fit them and make them look good.”
The key to her was that “they made them look good.” She, as most Millennials do, wanted style and uniqueness along with service. One person handled all the apparel planning, location and shipping.
So, Macy’s already is linking up with this crowd. Two years ago my daughter never shopped Macy’s. Now it is her main store and she is anxious to head for NYC to see the new Herald Square show department.
It is all about marketing, style, and service (the massive online/hard promo helps).
Macy’s is doing many things right these days — not only playing an impressive game of digital catch-up, but doubling down on training and staying the course on its groundbreaking My Macy’s localization effort. Macy’s biggest obstacle to becoming the “store of choice” for ANY customer is its spotty physical footprint. It simply is not an accessible brand for many communities. That’s where further developing its digital credibility will be critical, particularly when targeting Millennials.
Macy’s recent brandapalooza feels a bit too Penney’s circa 2009. If 2014 finds Macy’s paring down the brand portfolio and bringing Herald Square-ish shop-in-shops to other locations, they will be two years behind Penney’s.
Yes, other retailers can and should look at Macy’s for lessons. Macy’s is a multicultural retailer. It was one of the first, and continues to pay attention to the fast growing Hispanic, African American and Asian American consumers. These multicultural segments populate the majority of the millennial group. 2012 was the tipping point. More than 50% of all births in the US were multicultural and this trend will continue.
It’s interesting that the ages of 13-30 are cited. Then, in the comments, we are getting thoughts from parents of 16 year olds and from parents of a newly-wed (who I presume is older than 16!). And we get comments on girls/young women versus boys/young men. Anyone else think there might be BIG differences in shopping needs and patterns within this broad group?
Yes, Jonathan, I was thinking exactly the same thing: let’s slice the population up into arbitrary groups, see which ones we “deserve” to do better with, and issue a series of self-flattering press releases on how we’re going to conquer them. (And the grouping is even worse than lumping 16-year olds with 30 somethings: note the comparison to “consumers 35 to 74” … 74???)
Basically what I see here is a textbook strategy — define your customers by age, introduce new brands, promote heavily — that could have come from 1982 (or even 1882); that’s not necessarily a bad thing — and bad or good the size and format of Macy*s limits what can be done — but I just can’t get very excited about it.
Millennials are NOT ONE BIG GROUP, LIVING IN ONE LOCATION, THINKING ONE WAY. Niche baby! Niche!
The greatest challenge to Macy’s in attracting Millennials is generating and maintaining a level of personal engagement with customers consistently. Millennials want to engage with a company directly and authentically. For Macy’s, they will have to break down traditional silos to establish those lines of communication.
Don’t underestimate Macy’s ability to tackle this initiative. They have surprised many (including me) with the success of their “My Macy’s” localized content strategy over the last few years and I have found the experience in many of their locations to be significantly more engaging than in the past. This is an organization with both extraordinary talent at the senior levels, and a highly talented and engaged Millennial population of young execs helping them to make good decisions. I applaud them and predict continued success.