The shift in consumer behavior and its effects on the retail industry
It’s an unpredictable period to be involved in the retail industry at the moment.
Consumers are becoming less loyal to brands, resulting in more even competition. Consequently, companies need to vie based on their strengths, pricing strategies, and perceived popularity.
Traditional mall retailers, for instance, once held a significant advantage due to their access to high levels of foot traffic. Mall owners could demand hefty rents from these stores, as the prime location justified the cost. Shoppers would frequently enter and make purchases simply because visiting the mall often entailed shopping.
In recent times, however, that model has declined.
Shopping malls are no longer seen as the best option for access and convenience. With the emergence of suburban strip plazas offering similar inventories and the growth of online shopping, accessing your favorite brands has become more convenient than ever.
On the contrary, customers place significant emphasis on pricing. Due to the fact that retailers like TJ Maxx, Ross, and various online platforms continue to provide brand names at more favorable discounts compared to those generally available at local malls, these formerly dominant mall centers have started to decline.
Retailers must find various methods to attract customers. Be it through competitive pricing, superior inventory, or more convenient access, capturing at least one of these elements is essential for a retailer to remain pertinent in 2024.
Macy’s renewal strategies and introduction of new brands
It’s clear that Macy’s has been making major efforts to avoid the same fate as JC Penney, specifically aiming to prevent bankruptcy through various revitalization strategies.
The retailer is adopting a strategy similar to Target’s by launching new exclusive in-house brands that are not available at other retailers. This initiative aims to achieve exclusivity and rejuvenate customer interest in its stores.
Macy’s revealed plans to reintroduce its well-loved children’s brand, Epic Threads, which will include items such as vibrant sundresses and floral t-shirts. The updated collection will comprise approximately 200 items, including t-shirts, pants, dresses, outerwear, and accessories, with prices starting at approximately – USD (around – AUD).
Macy’s introduced and reintroduced several other brands in this initiative, including On 34th & State Of Day. They also plan to launch an unnamed menswear collection later in 2024 and another kids’ line shortly thereafter. Management reports that private labels account for approximately 15% of overall sales, which is part of Macy’s “Bold New Chapter” strategy aimed at revitalizing growth and returning profits to shareholders.
Alongside introducing new brands, Macy’s is concentrating on elevating the in-store experience. The retailer is putting resources into modernising its stores with refreshed layouts, better lighting, and interactive displays to craft a more captivating shopping atmosphere. This initiative aims to draw in more visitors and motivate customers to linger longer in the store, thereby boosting sales.
Additionally, Macy’s is utilizing technology to optimize operations and enhance customer service. The retailer has adopted sophisticated inventory management systems to guarantee that popular products are consistently available and has launched mobile checkout options to minimize waiting times at the register. These innovations are designed to deliver a smooth shopping experience, both online and in physical stores.
Another essential element of Macy’s renewal plan is its emphasis on sustainability. The company has pledged to boost the use of environmentally friendly materials in its merchandise and to lower its carbon emissions. By aligning itself with the increasing consumer preference for sustainable solutions, Macy’s aims to draw in eco-conscious customers and set itself apart from its rivals.
Macy’s comprehensive strategy for renewal – which includes introducing exclusive brands, improving the shopping experience, and prioritizing sustainability – demonstrates its commitment to evolving with the retail sector and maintaining customer relevance. The company’s success in overcoming these challenges will hinge on its proficiency in implementing these plans and connecting with its intended market.
