STORES 2014 BIG Show Daily - January 14, 2014 - 12
Macy's Woos the Millennial Market
illennials may not be at the
stage where they're ready to
change their Facebook status to
"in a relationship," but Macy's is already
committed, targeting the influential demographic with the aim of being there from
the first date.
"We know we can be there for every
major important milestone in their lives,"
said Martine Reardon, Macy's chief marketing officer. "By high school and college,
they have their own style. Then when they
come to us out of college, they need to get
great interview clothes. As they start to
think about their first apartment, we're the
perfect place to buy their home products.
Then they get engaged and find our bridal
registry [and] we go through that whole
If it seems that Macy's has fallen deeply in like with Millennials, this is not just
a one-sided crush. While it isn't releasing
sales figures, Macy's Millennial strategy
did merit a mention in both the 2012 annual
report and CEO Terry Lundgren's remarks
at the annual shareholders' meeting.
Ivan Feinseth, chief investment officer
for Tigress Financial Partners, sees nothing but the upside for reaching this demographic now. "The strategy to target that
group as they start to become independent
shoppers means hopefully they stay loyal
shoppers," he said. "It is a nice tie-in with
Macy's overall strategy."
It's given Macy's a slight edge in
the department store category, believes
Jeff Fromm, executive vice president at
ad agency Barkley and co-author of the
book Marketing to Millennials: Reach the
Largest and Most Influential Generation
of Consumers Ever. Macy's is "probably
ahead of their peer group," he said. "But
they're not limited to competing with just
retail brands. They'll have to go against the
best in class. Not just best in class in retail,
but better than Chipotle in the restaurant
space, better than the Dollar Shave Club.
"The benchmark that they should
strive to set is best in class, period," he said.
"I see a lot of positive things they're doing.
But it's particularly hard to be a disrupter
when you're an iconic brand."
Millennials "are the fastest-growing
demographic in the States today," Reardon
said. "They have the largest buying power
and they are the future. We've always been
extremely interested in that younger consumer. Now because it's such an important
demographic, we're making a stronger play
and career life.
key to success
which is capable
with career and
as well as home
- Jeff Fromm,
Changing the language
Millennials - those born between
the early 1980s and early 2000s - number about 80 million, a slightly larger
group than Baby Boomers. Macy's has a
solid head start on winning their dollars,
Fromm said. The retailer is in the process
of introducing 13 new fashion brands and
repositioning 11 others, with plans to do
the same in housewares and furnishings.
"It's a brilliant strategy," he said. "Millennials do like name brands, but private
brands can be successful too, if they are
we can be
well positioned. For the Millennial segment, it's much easier to launch a new
brand than to reposition an existing one."
Macy's, with a mix of both approaches, has cast Millennials into two large
groups - recognizing that those in their late
twenties have different needs than teenagers, and that both groups have distinctly
different desires than their parents and
Take Fiesta Ware, around since just
after the Great Depression. Grandma may
have the original set and Mom may have
collected the dinnerware that made a revival in the 1990s, "but they see how hip and
cool it can really be," Reardon said. Macy's
once focused on "beautiful furniture for
homes for big families," she said, but, "If
you come to any of our home floors now,
you'll see delineation between a 3,000-sq.ft. home and a 650-sq.-ft. apartment."
Home furnishings and housewares that
appeal to Millennials are still in the early
stages; Macy's apparel and accessories are
much further along. The junior-oriented
Marilyn Monroe brand, part of the Mstylelab segment for Millennials ages 13-22,
launched in Spring 2013 along with Keds;
others are being rolled out regularly.
Bar III, a big Impulse apparel seller
aimed at Millennials ages 22-30, is starting to make an appearance in home goods.
"We felt that the Millennial who really
loves looking like Bar III might [like] her
bedroom to look more like Bar III," Reardon said.
While Macy's may be a few steps
ahead by categorizing Millennials into two
distinct groups, Fromm sees the greatest
shopping differences based on when the
Millennials become parents.
"We are seeing distinct purchasing and
behavior differences between Millennials
overall and those that have had children,"
Fromm said. "In our new research, we
found Millennials are redefining parenthood, home ownership and career life.
Understanding those lifestyle differences
is key to success for Macy's, which is capable of outfitting consumers with career
and casual clothes, as well as home goods."
Millennials have required a new strategy for Macy's marketing. "We have had
to work a little bit harder," Reardon said.
"They are not reached through traditional
forms of media - they're not necessarily looking at catalogs that arrive in the
Macy's has launched a strong digital
and social approach to attract Millennials,
"which makes them feel like they're in their
own space," she said.
Social media is extremely important
for reaching Millennials but, "I would
caution brands to not just dive into social
media," Fromm said. "Macy's has done a
great job. They may have been a little late,
but they do a nice job with fashion news
and special URLs. The quality of the effort
Barkley's research "tells us that Millennial women in particular need a store
associate they view as a trusted fashion
expert," he said. "Macy's can have the best
social media strategy going, but they have
to translate at the store level in order to
See "Millennials" on page 28
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