How is Macy’s planning a turnaround?

Macy’s CEO Jeff Gennette is making his presence felt and helping turn the struggling department store chain around through a North Star Strategy. The retailer’s North Star Strategy is focused on improving the customer journey and reducing shopper friction points both online and in-store.

The cornerstones of the strategy is investments in experience, mobility, and growing digital sales. The retailer’s investment in its mobile prowess, especially its mobile app is paying dividends with sales up more than 50% on the app in the first half of the year.

In addition to its mobility investments, Macy’s is focused on five key strategic initiatives as it looks to rebound in the struggling department store segment:

Macy’s has redesigned its Star Rewards loyalty program and opened it up to all customers, regardless of how they pay for their purchases; previously they needed to use their branded Macy’s card to receive any loyalty benefits.

The benefits of the tiered program include:

  • Bronze – All customers can enjoy star money days, perks and offers, and a birthday surprise.
  • Silver – Customers who spend up to $499 annually at Macy’s with their Macy’s credit card will receive 25% off any day they choose with Star Pass coupons.
    Gold – With $500 to $1,199 annual spend, customers receive 25% off any day they choose with Star Pass coupons and free shipping on all Macy’s purchases when they use a Macy’s card.
  • Platinum – With $1,200 or more annual spend on a Macy’s credit card, customers receive 25% off any day they choose with Star Pass coupons, free shipping on all Macy’s purchases, and 5% back in rewards on every Macy’s merchandise purchase in-store and online.

Macy’s is expanding its off-price brand Backstage. It opened 47 new Backstage stores in the second quarter for a total of 65 openings in the first half of the year. The retailer is on pace to open 120 discount locations this calendar year.

Macy’s is expanding its online assortment by partnering with vendors who will handle fulfillment. The new system is similar to the marketplace model used my many retailers across the industry. The ongoing merchandising expansion strategy is set to go live before the holiday shopping season. The assortment increase will include Macy’s well-known brands as well as some new brands and categories designed to connect with a greater customer segment.

In addition to its third party merchandising strategy, Macy’s is relying on analytics to pinpoint shopper needs and tailor its offerings to meet demand. Last year the department store chain consolidated analytics into one center of excellence that serves the entire business. The analytics center of excellence is focused on pricing, POS discounts, markdowns, and discovering and acting on customer demand.

Macy’s is expanding its in-store pickup program, both its buy online ship to store initiative and its buy online pickup in-store program. Buy online pickup in-store has been expanded to 50 stores and will be rolled out to most of the chain by the end of the third quarter.

In addition to scaling the program, Macy’s is refining the service with a focus on an improved customer experience. The retailer will be introducing At Your Service stations in every store to make pickup quick and seamless for shoppers.

The retailer’s Growth50 initiative is the implementation of in-store enhancements at 50 stores throughout the chain based on success from its Woodbridge Township, NJ test location.

Can this stop their slide? Remains to be seen.

Check out my related post: What happened to Toys R Us?

Interesting reads:


  1. Hi abm
    Thank you for another interesting, well informed and well written piece.

    Notwithstanding brave attempts to revitalise department stores, all I’m seeing is their slow drift towards extinction.

    I think there’s two main reasons.

    First, people can find goods and buy more cheaply from a massive catalogue that no one Department store could match, where sellers have comparatively small overheads.

    Second, I see no consumer confidence in the face of appallingly useless governments, stagnant economies, disastrous climate change events and the emergence of the kind of dog eat dog far right societies that precede open civil and global conflict.

    Would I like to buy furniture? No, but if you have a reliable source of fresh water, I’m interested.

    Liked by 1 person

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