In 2020, Macy’s opened its first Market by Macy’s location, which was in the Dallas-Fort Worth area.
Macy’s is accelerating its plans to open smaller non-suburban shopping malls in an effort to evolve with customers̵[ads1]7; shopping preferences emerging from the Covid pandemic.
The department store chain said on Wednesday that it will open three stores this fall, each representing ways Macy’s thinks about how they aim to reposition their property in the future. It includes:
- Combines some of the different businesses under one roof
- Closing one of the department stores in a traditional mall to open a smaller-sized Macy’s store, known as The Market by Macy’s, in a more densely populated part of the city nearby
- Adds a new Market by Macy’s location in an area where it already has several of these stores
“We want to be practical and we want to make it easy,” Marc Mastronardi, Macy’s CEO, said in an interview. “Customer behavior is just changing. And the more we have the flexibility as an organization to change and respond, this feels like the next natural development.”
This fits in with a broader strategy that Macy’s presented to investors in February 2020, shortly before Covid-19 cases began to increase in the United States. At the time, the company said it planned to close 125 stores in lower-level malls within three years and would explore formats outside malls.
Since then, Macy’s has opened five stores under the Market by Macy’s banner, which is about one-fifth the size of the full-line locations and offers online shopping services. It will reach eight by the end of this year.
Going small and getting away from the mall has become a bit of a trend in retail. It is a blueprint that dealers from Gap to Nordstrom have followed. Kohl’s also said it aims to open 100 smaller footprint locations over the next four years. Last year, Macy’s opened its first pint-sized Bloomingdale’s store, called Bloomie’s.
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Some of American malls have lost appeal – and tenants – as consumers today tend to seek a quick and convenient shopping experience. Shoppers are also much less interested in spending hours browsing large stores on multiple levels, leading retailers to test slim versions.
“Shopping malls are underperforming, and this is an opportunity to enter a market in the right place and in a new format,” said Mastronardi.
This fall, Macy’s opens its first ever dual Market by Macy’s and Macy’s Backstage store, which is a competitor to discount chains, including TJ Maxx, in the Chicago metropolitan area.
Second, it plans to close one of its malls anchored department stores in the Chesterfield area of St. Louis to open a smaller Market at Macy’s location nearby, in an outdoor center known as the Chesterfield Commons.
And third, Macy’s will open a Market by Macy’s store in Johns Creek Town Center, in Suwanee, Georgia, and mark its third such location in the Metro Atlanta area.
Mastronardi said that the Atlanta market has proven to be a place where people show affiliation with the Macy’s brand, and it is also a very busy area, which gives Macy’s a reason to have a strengthened presence.
He also said that Macy’s customers spend three times more online on average in markets where the retailer also has physical stores.
“When we can be close to a customer with a physical format, our digital business is significantly better,” he said.
Macy’s counted 511 of its namesake, 55 Bloomingdale’s stores and 160 Bluemercury makeup stores, as of April 30.