May 2. 2018
There’s a new storyline in the Macy’s saga (pun totally intended). The department store has just announced it has acquired the buzzy New York concept store, Story, and its founder and CEO Rachel Shechtman will join Macy’s. Those familiar with Story will know that this is, at face value, a strategy to boost Macy’s in-store experience.
For those who don’t know Story: What is Story?
Story brings the concept of storytelling to retail. Every four to eight weeks, the Chelsea-located store completely transforms from top to toe to create a new, immersive experience. Each new “theme” is created in partnerships with other brands and businesses—that have ranged from a “throwback” theme with Nickelodeon; to “Fresh” focusing on produce from Jet.com; to Proctor & Gamble, Birchbox Man, and Details magazine’s collaborative sponsorship of “His” Story—to provide a curated assortment of men’s products.
How could it change the Macy’s experience?
One of the biggest points on Macy’s new five-pronged North Star Strategy is Every Experience Matters—i.e., let’s make our stores and website more fun to shop. Enter Story and founder Rachel Shechtman, the brains behind it. As part of the acquisition, Shechtman will become Macy’s brand experience officer, charged with refreshing the experience in Macy’s stores. The partnership also gives the Story concept new was to grow and the opportunity to get in front of more shoppers.
How will this new concept come to life? That is still unclear. But those who see similarities between Story’s concept and founder and Nordstrom’s Pop-In strategy and its director of “creative projects” Olivia Kim, may not be too far off. Nordstrom’s Pop-In shops are only featured in a handful of stores, living primarily online. It’s unclear and perhaps unlikely that they drive a noticeable amount of revenue themselves, but do provide strong brand positioning that targets a younger, cutting-edge clientele.
While it would be easy for Macy’s and Story to follow a similar model, it seems as though Shechtmen may be the bigger acquisition here. Much like Walmart leveraged Jet.com founder Mark Lore to improve its own .com presence, Macy’s may use Shechtman to improve the experience across the fleet, rather than just in a few already high-performing doors.
What about products?
The final unknown is how this will affect Macy’s assortment. Macy’s CEO Jeff Gennette and Shechtman have both emphasized that product will be a core focus of the partnership. This could indicate that Shechtman may have a hand in buying and merchandising as well, fueling another important prong of the star: private brands and exclusive partnerships.
What does this mean for retail?
It is hard to determine the ROI on investing in experiences. There is no directly attributable revenue, margin, or profit line, and investments in experience can often depress all three in the short term. This means that Macy’s is funding its long-term success. Even though Gennette indicated that improving the experience is also a near-term priority for 2018, many of the benefits from this acquisition will likely be felt in the years to come.