Macy's Opening 30 Small Format Off Mall Stores

[storewanderer]

Exactly. I had a similar problem with seasonal goods where I put a stop to return and rebuys because they were de facto price adjustments which we only offered for a week after purchase. Customers would try to return their full price purchased items after the holiday and rebuy it at 70% OFF. I said we are not going to play this game anymore and told my employees not to restock any seasonal returns until the next day, just put them in a cart in the back. They were furious and tried complaining to corporate that we were not putting their returns back on the shelf to be repurchased... by them! Sometimes they had carefully tucked in the price tags or reattached them after using the products as their homes decor, hoping we wouldn't notice.

The best policy on seasonal merchandise returns is anything returned after the holiday/on clearance will be refunded at the current clearance price. I suppose it could be a gesture of courtesy to allow returns at whatever the purchase price was through 12/27 or something to account for "gifted" seasonal merchandise people do not want to keep but I am not even sure of that.

That still doesn't address the people who use the product then return it but it stings them a little (unless they return promptly by 12/27 under my above policy in which case they win and the store loses).

When you try the above policy some people will try a credit card dispute and actually submit as dispute evidence their original receipt then your refund receipt for that UPC number at an amount less than they paid. And the store if that policy about clearance items being refunded at lowest selling price/current clearance price if returned after the holiday is not printed directly ON the receipt (not on the back of it, not posted at customer service) 20 years ago the store would lose said dispute. I suspect today the store would win the dispute.

Largest retailer I saw try to implement that policy was Shopko. Not sure if they kept it long term but they had it in Reno before they left in the mid 00's.

[veteran+]

That is very bad. I shop markdowns for certain types of merchandise (bagged salad for one, some dairy items), won't touch them for some other things (like any bread product and generally meat), but I never expect a markdown. If I find a markdown great, if not then oh well. I recall hearing F&E customers were waiting in the store for a certain time of day when markdowns occured and followed around employees or something.

I know it's veering into the off-topic F&E discussion, but I lived walking distance to the Hermosa Beach small-format F&E and would go in every night around 8:30pm to find cartfulls on cartfulls of marked-down goods. At the time, that time of evening was when I had time to shop. I didn't go there to bargain hunt, but after a couple weeks I realized there were tons of markdowns every day, so...why pay full price for anything? I probably tried almost every prepared dish they offered, all marked down ~75%. The markdowns around Thanksgiving one year were absolutely obscene. So much food wasted even marked down to near zero.

I never EXPECTED a markdown, though. And certainly never hid items. The markdowns were just always there! In the 2 years (?) the store was there, I probably paid full price for maybe 15-20% of everything I bought there. Everything else massive markdowns.

I specifically remember the Family Spaghetti & Meatballs regular price $10.99 markdown like $1.99 or something. Regularly. And cookies down to like 25 cents. Daily. Good times. Adjusting my budget back to "normal" prices (and this was pre-pandemic) was painful. It almost felt like a subsidized government program.

Yep, there you have it! That was the scenario in almost all their stores in 3 States PLUS Self Checkout!

Over 3.5 billions dollars later in losses................bye bye F&E

[babs]

I was looking in housewares and could not find anything I wanted. Of course their website did not match the store's inventory, OF COURSE!

I spoke with a wonderful lady about it and she said "I know, I have been in charge of this department for a long time and they keep on discontinuing lines and categories every few months".

What happened to their home program? Macy's used to have a really good (and also really busy at least here) home/luggage department. Not even that long ago- maybe 7-8 years ago it was still good/BUSY. They have cut floor space (put mattresses in a lot of the space) and the merchandise mix just seems off and constantly in a flux. There are usually only 2-3 employees up there on the entire floor (including one guy sitting at a mattress desk who looks about to fall asleep due to lack of activity) and rarely more than a handfull of customers.

Macy's is barely in the home business. The store near me replaced the china department with the children's apparel department. Mattresses took over another part of the home department. They are not a serious player anymore in the home business. It's basically a a 250,000 sq ft clothing store with a bit of toys and home. They way incredibly over inventoried in clothing. Back in the 80s and 90s, Christmas goods was a really nice department, now it's a depressing back corner of the store. It's time to bring some excitement back to Macy's by adding in some new categories. It's a sad day that Costco is the most exciting retailer around with their treasure hunt atmosphere. Bring some of that juice to Macy's an d let's see what happens.

[buckguy]

No one buys china, silver, or crystal anymore and it's difficult to find buyers for the old stuff even if it is high quality. Macy's still sells things like Fiestaware, but that can be bought in many places.

I'm actually surprised they have housewares because those have been pared back everywhere, with sales going to discount stores and (when they existed) big boxes.

The furniture business has changed a lot--it used to be sold on time payments which were the profit center and rather than having a lot of local stores and regional chains at different price points, you have IKEA, a few leftover credit furniture places and then the Crate & Barrel class and the high end sellers, which also are fewer than they used to be. Department stores that did well in home furnishings really couldn't do it well in all their suburban branches and that's part of how they've lost their niche. The mattress stores probably took away business, as well.

The need to scale things for 150-200K sf stores killed off a lot that made department stores special or interesting and the upper middle range stores tended not to sell their most distinctive merchandise in the many mid-market malls--all that has just gotten worse over time but you could see that coming a long time ago. When Bloomingdale's replaced their huge White Flint, Martland store with a smaller one in Friendship Heights on the DC line, it was a lot of home goods that went. I can remember looking at the old Bloomie's at White Flint when I was buying some new pieces and there was no one else in the department other than the salesperson, so this was no surprise.

[ClownLoach]

I was looking in housewares and could not find anything I wanted. Of course their website did not match the store's inventory, OF COURSE!

I spoke with a wonderful lady about it and she said "I know, I have been in charge of this department for a long time and they keep on discontinuing lines and categories every few months".

What happened to their home program? Macy's used to have a really good (and also really busy at least here) home/luggage department. Not even that long ago- maybe 7-8 years ago it was still good/BUSY. They have cut floor space (put mattresses in a lot of the space) and the merchandise mix just seems off and constantly in a flux. There are usually only 2-3 employees up there on the entire floor (including one guy sitting at a mattress desk who looks about to fall asleep due to lack of activity) and rarely more than a handfull of customers.

Macy's is barely in the home business. The store near me replaced the china department with the children's apparel department. Mattresses took over another part of the home department. They are not a serious player anymore in the home business. It's basically a a 250,000 sq ft clothing store with a bit of toys and home. They way incredibly over inventoried in clothing. Back in the 80s and 90s, Christmas goods was a really nice department, now it's a depressing back corner of the store. It's time to bring some excitement back to Macy's by adding in some new categories. It's a sad day that Costco is the most exciting retailer around with their treasure hunt atmosphere. Bring some of that juice to Macy's an d let's see what happens.

The problem with Macy's home business is that historically it was poorly managed and wildly inconsistent from store to store. Inventory levels have historically been abused through excessive ordering, which has caused the productivity and profit to dwindle. Some stores played the game and appeared to need to get pallet racking for the sales floor to hold all the goods while others were left with empty shelves because the distribution center was empty. Macy's brought in a really good head of supply chain who has cleaned up a lot of their forecasting and automatic ordering, but that work has meant the malicious stores now have to consolidate the space that department never needed in the first place. You walk into some Macy's home departments and you'd see 500+ Keurig machines, a hundred cases of the same set of house brand Cellar pots and pans, a hundred Shark and Dyson vacuum cleaners, and so forth. Once you get the SKUs to fit into the space that reflects the sales it looks like you slashed 90% of the department away but the reality is they just cleaned up letting bad managers use the store as a warehouse. I'm not sure they actually removed more than 20% of their SKUs in the category over the last five years or so. Next time I'm in I will look at the areas I found to have problematic in stocks such as kitchen gadgets and tools, and knives. Being familiar with this type of conversion from bulk ordering to automatic replenishment there is a long tail on the changeover, the stores that didn't abuse the system and over order are now going to see more product than they're used to getting, probably sell more than forecasted, and it'll take a year or so for the inventory forecasting systems to catch up with the growing demand. That means those stores will probably have to expand and then expand again in the kitchen area while the unjustified locations ordering space filling large boxes need to shrink and remerchandise. If you look around most Macy's stores you're going to see the same issue in various departments; the automatic ordering is giving them what they need based on sales and as a result there is a lot of space being shuffled around at their stores. Some departments need to grow as they're now getting the space they earn while others are shrinking and it is not consistent from location to location since demographics drive most of the change. This will also result in far less merchandise that goes on clearance, gets damaged and shop worn etc.

This is the same bad behavior that Bed Bath and Beyond encouraged which caused them to have a glut of high dollar slow turning inventory pile up and then they didn't have the free cash or room on their credit lines to keep buying to maintain their in stock levels. I think Macy's is doing a better job fixing this problem internally than BB&B did.

To say Macy's isn't in this business anymore (except for the small format fashion stores) is not accurate at all, and in most of their stores the department that keeps the doors open is kitchen electrics.

And last year all the stores I visited had consolidated and pushed back the entrance to create a fabulous Christmas shoppe which was the best I've ever seen at Macy's. I have been very busy and haven't been able to look yet this month but clearly they're doing exactly what you're saying. The merchandise was 100% new, great Christmas tree ornaments and decor, none of the same old stuff that used to go into a basement on Dec. 26th to be dredged back up next Fall. And the stores I visited last year had nothing left by about the 2nd week of December which is actually where you want to be as a premium seller; at that point in time it's just a race to the bottom as everyone panics and marks down the entire category and destroys the margins. The fact that Macy's sold through the Christmas product early and at higher prices than your Hobby Lobby or Michaels type places, in a very very bad year for that product, indicates they're on the right track. If they were still letting their people order twenty of every single SKU of wool socks and long underwear and parkas for the frigid winters of Southern California then they wouldn't have had room for any of that new Christmas shoppe.

When these mini stores start struggling (because they will), I expect that they'll try as stated previously to try to turn some into freestanding Backstage stores to compete with Marshalls and TJMaxx while I fully expect to see them test freestanding Macy's Home stores in a format about half the size of a HomeGoods.

[Romr123]

No one buys china, silver, or crystal anymore and it's difficult to find buyers for the old stuff even if it is high quality. Macy's still sells things like Fiestaware, but that can be bought in many places.

I'm actually surprised they have housewares because those have been pared back everywhere, with sales going to discount stores and (when they existed) big boxes.

The need to scale things for 150-200K sf stores killed off a lot that made department stores special or interesting and the upper middle range stores tended not to sell their most distinctive merchandise in the many mid-market malls--all that has just gotten worse over time but you could see that coming a long time ago. When Bloomingdale's replaced their huge White Flint, Martland store with a smaller one in Friendship Heights on the DC line, it was a lot of home goods that went. I can remember looking at the old Bloomie's at White Flint when I was buying some new pieces and there was no one else in the department other than the salesperson, so this was no surprise.

This is so very true. I haven't worked retail since the mid/late 80s, but even then stores were classifying their locations into best, medium and worst...I worked at LS Ayres in Cincinnati (so a mid '80s collapse of Pogues and Stewarts by Associated Dry Goods into LS Ayres). There were 3 categories of stores--A, B and C. I worked domestics at a B-class store, so we had the promotional linens, and on our walls were Martex Luxor Pima and Fieldcrest Royal Velvet. C stores made do with Royal Velvet only, and A stores also got Ralph Lauren. This was replicated for sheets (A stores got additional Laura Ashley and Ralph Lauren, and stocked additional specialty items (shams/accents/...). There were 2 A stores in CIncinnati (Downtown and Kenwood), one in Louisville (Oxmoor), 2 in Indianapolis (Downtown and Glendale) and 1 (as I recall) in Fort Wayne. The C stores were the small town/small stores (Florence Mall and Muncie Mall stick in my mind), When locating merchandise (this was way before SKU usage--we were just department/class) we would always try the downtown stores first, then the other A stores, then the peer stores, then the smaller stores.

[ClownLoach]

No one buys china, silver, or crystal anymore and it's difficult to find buyers for the old stuff even if it is high quality. Macy's still sells things like Fiestaware, but that can be bought in many places.

I'm actually surprised they have housewares because those have been pared back everywhere, with sales going to discount stores and (when they existed) big boxes.

The need to scale things for 150-200K sf stores killed off a lot that made department stores special or interesting and the upper middle range stores tended not to sell their most distinctive merchandise in the many mid-market malls--all that has just gotten worse over time but you could see that coming a long time ago. When Bloomingdale's replaced their huge White Flint, Martland store with a smaller one in Friendship Heights on the DC line, it was a lot of home goods that went. I can remember looking at the old Bloomie's at White Flint when I was buying some new pieces and there was no one else in the department other than the salesperson, so this was no surprise.

This is so very true. I haven't worked retail since the mid/late 80s, but even then stores were classifying their locations into best, medium and worst...I worked at LS Ayres in Cincinnati (so a mid '80s collapse of Pogues and Stewarts by Associated Dry Goods into LS Ayres). There were 3 categories of stores--A, B and C. I worked domestics at a B-class store, so we had the promotional linens, and on our walls were Martex Luxor Pima and Fieldcrest Royal Velvet. C stores made do with Royal Velvet only, and A stores also got Ralph Lauren. This was replicated for sheets (A stores got additional Laura Ashley and Ralph Lauren, and stocked additional specialty items (shams/accents/...). There were 2 A stores in CIncinnati (Downtown and Kenwood), one in Louisville (Oxmoor), 2 in Indianapolis (Downtown and Glendale) and 1 (as I recall) in Fort Wayne. The C stores were the small town/small stores (Florence Mall and Muncie Mall stick in my mind), When locating merchandise (this was way before SKU usage--we were just department/class) we would always try the downtown stores first, then the other A stores, then the peer stores, then the smaller stores.

That model is still completely obsolete. Stores now systems that generate store specific SKU level planograms. Just because a store is lower volume doesn't mean that it doesn't need the "A" level items. Today's best systems adjust the assortment for every single store. Macy's is being dragged kicking and screaming into the 21st century as the stores get the merchandise they will sell and no more, no less.

My point is more that there is a misperception that Macy's isn't in the home business anymore and that just is not true. It was the last part of the store that was allowed to order excessive inventory and do the old fashioned "stack it high and (hopefully) watch it fly." As a result it is the most visibly changed department at Macy's currently because nearly every store was ordering hundreds of Keurig machines and such year in, year out to cover the space that really could have been reduced 20 or more years ago. Since Macy's wants to run with all centralized buying and merchandising there is no reason not to move to centralized merchandising too.

[buckguy]

Just because you can do something doesn't mean you actually implement it in practice. Even if you can customize with a planogram doesn't seem to lead to actually doing it, perhaps because customer base doesn't justify that level of customization (low sales of all or most of the high end lines) and associated adjustments to promotion. Tech might help in merchandising very small branches, but chains figured that out decades ago when they first opened them.

Nordstrom obviously stratifies its stores and has for quite awhile---for a better selection, you go to Tysons rather than Pentagon City in this area. Even Dillard, where uniformity rules, has obvious flagship locations with higher end merchandise and these usually are surrounded by other high end retail. The Dillard in Beachwood, Ohio does this with dark wood from the late 70s displays from the days when Higbee's opened this as a high end branch, which makes it look like a museum piece, but at least it is better kept than some other branches. Even Macy's has tried to merchandise the large flagships like Herald Square and Marshall Field's in the Loop differently from the usual suburban branches.

Beyond all that, it's obvious that the damage was done long ago and most department store chains lost what was special and distinctive about them and that isn't coming back. The ability of Nordstrom, Saks, et al. to only have one or two stores in a metro area enabled them to maintain an image that was lost when the Associated Dry Goods or more upscale Federated and Allied chains felt compelled to be in every mall.

As for home goods, a lot of that stuff has gone the way of the dodo bird. Wedding registries no longer keep china and crystal alive. Decorative gift items also have lost their market and there's nothing obvious to replace these lines. Furniture is cyclical--usually the first thing people don't buy in a recession-and the competition has changed. Department stores usually excelled in relatively traditional styles which are less popular than in the past.

[Romr123]

You're absolutely correct. Back in those days, with only 30-ish stores but limited technology (no automated SKU tracking--we had a department clerical who worked 9-3 M-F; a coveted job for a suburban mom--no dealing with customers and home for when the kids got home from school), planogramming was rudimentary, at best, and was generally color based and size based(small sizes at the top; Kings at the bottom) for appearance and uniformity, not for profitability.

It seemed there was more thought given, though, to assortment and appearance in linens, for example(felt more logical at the time: solid basics in a good (180 count blend) better (200 count blend) and best (220 count all-cotton); longer-term prints (in stock for a year or so, not promoted but steady sellers); fashion prints (generally promoted seasonally) designer merchandise (Laura Ashley was the designer of the moment); special purchase all-one-price items; assorted packaged sheet sets, assorted waterbed sets.

Now, with so many more competitors, Macy's hasn't demonstrated that type of discipline which the new centralization may bring. Let us hope, because the "discovery" aspect of shopping Macy's home is sadly gone.
Now, it seems like everything at Macys is just a mixed up group of multi-season sheet sets

[veteran+]

Great evaluations here!!

The Macy's at the Beverly Center was incredible at one time (like the Macy's at Dadeland, Miami).

The Home Goods department was not the only department lacking in variety and upscale product lines. Strange, given the high income level of the surrounding area.