Between its hundreds of storefronts, long pedigree and high-visibility advertising (think, Thanksgiving Day parades), Macy’s is no stranger to the average American consumer. However, the traditional image is undergoing generational change as millennials become the dominant spending force in the market.
Not one to let itself fall behind the curve, Macy’s opened One Below, its first brand dedicated to millennials in September, Bloomberg Business reported. With nearly $400 million sunk into the redesign of Macy’s flagship location in New York City’s Herald Square, the walls decked out with digital panels that display shoppers’ selfies, whole sections devoted to wearable devices and “a constant electro soundtrack of house music,” retail experts are starting to ask hard questions about the immediate and long-term success of Macy’s millennial gamble.
For Camille Schuster, president of Global Collaborations, One Below seems like an intriguing proposition for Macy’s, but interest alone isn’t going to drive sales.
“This sounds like an interesting trial,” Schuster told RetailWire. “Something unusual is likely to draw tourists and some local consumers. Will it draw millennials who live in the area? We will have to wait to see the results of the test. How does putting all the new ideas into one location in one iconic city reveal what will attract millennials across the U.S.? Probably not very well. This is only the beginning of a lot more testing that needs to be done.”
A complicating factor in One Below’s attempt to capture more millennial fashion shoppers is that the brand is limited to the basement of an otherwise normally branded Macy’s storefront. Gene Detroyer, executive director of Global Commerce Education and professor of entrepreneurship at the European School of Economics, shared his opinions on how even though One Below might appeal to millennials, Macy’s biggest challenge might be their big red signs out on the street.
“The real challenge for Macy’s is not to build a location for millennials,” Detroyer told Retail Wire. “The real challenge is to get millennials to walk into Macy’s. After all, it is Macy’s. You can’t look at your customers like they are stuck in time nor a stereotype. These millennials are the future core of your business. The store has to be appealing, not the floor.”
Not every expert that spoke to RetailWire was down on Macy’s millennial experiment. In fact, Tom Redd, global vice president of strategic communications at SAP’s Global Retail Business Unit, sounded off on how One Below could be a game changer for marketing and selling to millennials – but only if the elements that make One Below’s NYC location can be easily and inexpensively recreated across the country and reimagined when consumer opinions change.
“The One Below floor at Macy’s will fit the Generation Zs fine,” Redd said. “Lots of charging stations and good selfie photo locations are a must — and of course free Internet and a strong cell signal. Macy’s just has to make sure that the One Below space can be reconfigured fast and cheap. Why? Generation Z is has more moods than we have ever seen, so if they have a ‘socially agreed’ mood change their retail demands/needs/wants will change and thus One Below may have to go Four Below. Typical horde retailing!”
Rapid and frequent redesigns like Redd mentioned might not be feasible with the amount of digital accoutrements and non-traditional product displays at Macy’s first One Below location. Bloomberg noted that the store has, among other things, a 3-D-printing station that can turn customers’ selfies into figurines and a laser etcher for inlaying jeans and other clothes with custom designs.
While One Below’s $400-million redesign price tag might make sense in a hub like NYC that can draw on the spending power of Manhattan millennials and far-flung tourists alike, it beggars belief that the retailer can spend close to that replicating One Below’s success in other locations, or even in the same city with a new look.
Or, Macy’s and One Below might just be ahead of the game.