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When was the last time you went out to the local mall because you really had to?
If you were asked this question a few decades ago, your answer would probably be something like, “Last week” or “I put it on my bucket list this weekend.”
But maybe that’s not the case anymore.
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Nowadays, fewer shoppers go to local malls, simply because they don’t have to.
As a result of this change, American shoppers are becoming less brand loyal, which means that the competition is becoming more level-playing field. Companies must compete on the basis of their advantages, pricing power, and perceived popularity above all else.
Shopping malls are no longer considered Gold standards With the rise of suburban malls with impressive inventory and online shopping, accessing your favorite brands is easier than ever.
Thanks to the rise of online shopping, the increase in suburban shopping malls within walking distance, and many other options, we no longer have to visit a huge indoor mall to get to things that we could only get by driving 30 minutes, parking in a huge garage, and wandering through stores for half a day.
Macy’s hurt by waning mall interest
This has particularly hurt traditional mall retailers like J.C. Penney and Macy’s. (M) Once the anchor stores in shopping malls, these stores are now little more than shells, paying exorbitant rents for less and less access to pedestrian traffic and bargain-hungry shoppers.
This is clearly not a sustainable business model. Macy’s has openly announced a revitalization plan, saying it will close about 150 stores by 2026 to improve sales and boost profits.
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It has also begun to attack by offering what it hopes will be attractive new deals; it has begun Activate internal brands Like the children’s brand Epic Threads, it hopes to attract loyal customers who are looking for exclusive, value-based brands.
Macy’s has launched or relaunched several other brands as part of its efforts to revitalize its business, including On 34th and State of Day. The company plans to launch an unnamed men’s clothing collection in 2024 and another children’s clothing line shortly after.
Macy’s is betting big on its luxury line
But relaunching older products isn’t the only part of Macy’s big rethink. The mall retailer is reportedly delving deeper into higher-margin luxury lines to attract customers who have more money to spend.
The retailer says it will refocus its efforts on designer fragrances, which still carry highly sought-after brands like Dior and Chanel but come at a more accessible price point than, say, a designer handbag.
“Fragrance is the ultimate piece of luxury that can be acquired,” says Nicolette Bosco, vice president of beauty at Macy’s. He said” . “[Fragrance] “This product is much more accessible than buying something else from the same brand for, say, $5,000.”
“Over the past three years or so post-Covid, we have been very focused on elevating and bringing this luxury beauty experience to our consumers,” she added.
Some Macy’s stores have already begun stocking luxury fragrances from designers like Cartier, Tom Ford and Creed. But the mall retailer plans to ramp up its presence in designer scents, unveiling a plan to expand its luxury beauty offerings — with a heavy focus on fragrances — to 42 stores by the end of 2024.
Macy’s says it will introduce small store-within-a-store concepts, similar to what Target has done with Ulta and what Kohl’s has successfully implemented with Sephora.
“We’ve evolved into bringing collaboration, what I like to call ‘retail entertainment’ — my CEO calls it retail theater. And we have that ability because we have the space to do these different types of collaborations,” Bosco said. “I see that as part of our future growth in what we’re going to offer the consumer.”
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