Macy’s, the iconic American department store chain, has recently announced a new wave of closures that will affect 150 of its stores. This announcement follows a series of shutdowns last year as the company attempts to adapt to shifting market conditions.
Although specific locations haven’t been confirmed, some of these stores might be in New Jersey, particularly near the popular Jersey Shore area. Macy’s plans to execute these closures in two phases: 50 by the end of 2024 and the remaining 100 by 2026.
An adjustment in changing times in Macy’s
This restructuring plan is a response to the company’s need to adapt to an increasingly e-commerce-driven market and shifting consumer shopping preferences. The decision to close stores hasn’t come lightly. According to Macy’s CEO, these stores have been deemed “underperforming,” which is a diplomatic way of indicating they aren’t generating the expected revenue due to low customer foot traffic and insufficient sales.
What does this mean for New Jersey?
While it’s not officially confirmed that New Jersey stores will be on the closure list, the uncertainty is troubling for many. New Jersey, home to over 20 Macy’s locations, could see some of its stores permanently shut their doors. Local malls like the Ocean County Mall in Toms River and the Freehold Raceway Mall in Freehold might be impacted.
The potential closure of Macy’s stores in New Jersey would not only affect the chain but also the overall landscape of the state’s shopping malls. New Jersey is known for its dense network of shopping centers and a population that has traditionally supported in-person retail shopping.
Marc Kalan, an associate professor at Rutgers Business School, notes that while some stores are likely to close, the brand won’t disappear entirely. According to Kalan, Macy’s occupies a unique position in the market, nestled between more accessible stores like Walmart and Kohl’s and luxury stores like Saks or Bloomingdale’s. This positioning has allowed them to capture a middle-to-upper-class segment that values both quality and accessibility.
The future of Macy’s and its implications
Kalan also highlights that Macy’s is reassessing its business model. Although some stores are not performing as expected, the strategy isn’t solely focused on closures. The company is redirecting its resources towards more productive stores and exploring more specialized store formats like Bloomie’s and Bluemercury, which might better suit the new market dynamics.
The future of Macy’s seems to be oriented towards a combination of maintaining a physical presence in key locations and increasing its focus on e-commerce, a trend that has accelerated with the pandemic and the rise of e-commerce giants like Amazon.
Transformation of retail space
The impact of Macy’s closures could extend beyond the company itself, influencing the viability of shopping malls that rely on anchor stores like Macy’s to draw visitors. Malls that can diversify their offerings and create unique consumer experiences might survive and even thrive, while those that fail to adapt could face an uncertain future.
Kalan warns that this isn’t simply a problem for Macy’s or the retail sector, but part of an evolving market and consumer behavior. People no longer visit shopping malls as frequently as they used to, opting instead for the convenience of online shopping and home delivery.
This shift in consumer behavior has been evident for some time, but the pandemic has significantly accelerated it. Retailers that fail to adapt to this new reality might find themselves struggling to stay afloat. Macy’s, with its long history and substantial brand recognition, is trying to stay ahead of these changes by embracing a more flexible and dynamic approach to retail.
Macy’s strategic realignment: Store closures, online growth, and the future of retail
The closure of 150 stores is part of a larger strategy to streamline operations and focus on more profitable areas. This includes enhancing their online presence, improving the in-store experience for customers who still prefer to shop in person, and developing new store formats that better align with current shopping trends.
As Macy’s navigates these changes, the ripple effects will be felt throughout the retail industry. Other department stores and mall-based retailers are likely to follow suit, closing underperforming locations and investing more heavily in digital platforms. This transformation is reshaping the retail landscape, creating both challenges and opportunities for businesses willing to innovate and adapt.
For consumers, these changes could mean fewer physical stores but a more seamless and integrated shopping experience across online and offline channels. Macy’s efforts to redefine its business strategy reflect a broader trend towards a more digital-centric retail environment, one that emphasizes convenience, personalization, and efficiency.
As Macy’s moves forward with its store closures and strategic realignments, it will be crucial for the company to stay attuned to the evolving needs and preferences of its customers. The success of their new strategy will depend on their ability to balance the traditional appeal of in-store shopping with the growing demand for digital convenience.
What measures can other brick-and-mortar retailers take to adapt to the changing consumer behavior highlighted by Macy’s closures?
After Macy’s closures, retailers can adapt to changes in consumer behavior. They can take key steps:
- Blend online and offline shopping . Make the shopping experience consistent across channels.
- Make in-store experiences more engaging. Offer unique events and products to draw in customers.
- Update product selections. Mix well-known brands with new ones and in-house lines.
- Close underperforming stores. It’s open smaller stores in busy locations.
- Use data and AI to personalize offerings. Understand customer preferences better.
- Focus on off-price and luxury options. Learn from successful stores like TJX Companies and Nordstrom’s Rack.
- Partner with other brands. Collaborate with retailers like Kohl’s and Sephora to attract new customers.
- Speed up digital upgrades. Invest in technology to improve online and in-store shopping.