Acquisition of Retailer Story Leads Rapid Evolution for Macy’s
Adaptation is a fundamental requirement of survival. And just like any other species, the dominant retailers of the past need to evolve their genetic structure to continue to thrive in an unforgiving world.
Just this past week, Macy’s announced a move that has been more than a year in the making. In 2018, the company acquired innovative Manhattan-based retailer Story as part of a strategy to dramatically shake up the in-store customer experience. Last Wednesday, they announced the opening of 36 new 1,500 sq. ft. Story shops in Macy’s stores throughout the country.
Story made its name by pioneering a revolutionary concept. The New York-based retailer would curate themed collections of merchandise for a limited run every four to eight weeks, completely redesigning the look and feel of the entire store every time they would launch a new collection or “Story”. The ever-changing, carefully-curated store environment gave customers a great reason to keep coming back, and Story hedged their bets by collecting data so they could ensure their customer experience was tweaked to be top-notch on a measurable level.
Story founder and CEO Rachel Shechtman equipped the store with technology to track the customers’ journey through the retail space and measure their interactions with different elements for the curated collections. According to Doug Stephens, who examined Story as a case study in his 2017 book, Reengineering Retail, “For customers, the store is about having fun; for brands, it’s about providing backend data and analytics on how their products and content are being received. In short, Story is a powerful, and measurable form of physical, interactive brand media.”
Stephens goes on in the book to use Macy’s as a specific example, crunching the numbers to illustrate how Story was making almost twelve times the revenue per square foot relative to Macy’s, and how redesigning just a quarter of a Macy’s store using the Story model could easily double its revenue.
It seems Macy’s was listening, as they acquired Story for an undisclosed amount just a year later and brought in Story founder Rachel Shechtman as their new Brand Experience Officer, reporting directly to Macy’s President Hal Lawton himself.
According to a CNBC Article, Macy’s plans to rotate the collections in the new 1,500 square foot Story spaces every two months, bringing in different local brands and original products customers can’t find anywhere else. It’s a vision that gives customers a reason to keep coming back to the store when more and more of their business is moving online.
“Think about a magazine or digital media company,” Shechtman says. “Our version of editorial is merchandise curation and event programming.” The first Story collection at Macy’s, called “Color” launched last week at 36 Macy’s locations and will run until June 26th, with over 400 products on display.
You can bet that Macy’s, who was a relatively early adopter among retailers on the Big Data train, will also be employing whatever pieces they see as beneficial from Story’s customer journey tracking technology. In an era where the retail environment is increasingly threatened by the convenience of online shopping, any edge in shaping a sustainable in-store experience is more than welcome.
In many ways, it’s a similar three-birds-with-one-stone approach we saw a couple of weeks ago with McDonald’s acquisition of Dynamic Yield. With a single move, Macy’s was able to make an impact on their customer experience, product marketing, and data collection techniques. It will be interesting to see how this Story concept continues to evolve in the future once Macy’s has a body of measurable data to work with. We could very well see it grow beyond the initial 36 stores and grow in terms of footprint inside the stores, as well, if it is seen as a success.
What do you think about this evolutionary change to the Macy’s customer experience? Are they fighting a losing battle, or will this be a game changer? We’d love to hear what you think. Sound off on social media now and join the conversation.