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DJs, virtual reality and secondhand clothes: How department stores in Maryland are trying to stay relevant

Published October 22nd, 2019


At Macy’s in Towson Town Center, an off-price shop called Backstage beckons with discounts of up to 80%. Customers put on virtual reality headsets in furnishings to see how a sofa would look at home, and they can easily pick up online purchases in a new in-store department.

On the far side of the mall, inside Nordstrom, where pianists once provided pleasant background diversion, disk jockeys now spin tunes for store special events.

Elsewhere, Kohl’s has partnered with Amazon to accept the online retailer’s returns, bring people into its stores and further blur the lines between bricks-and-mortar stores and online shopping. And at JCPenney stores in Maryland’s suburbs of Washington, D.C., that retailer is selling secondhand clothing in store-within-a-store shops. Macy’s is testing this idea too, but not yet in Maryland.

Amid a rapidly changing retail landscape as online shopping matures and malls struggle to stay relevant, retailers are seeking ways to steer shoppers away from competitors and the lure of online. But figuring out what consumers want, particularly younger and millennial shoppers who grew up with Amazon at their fingertips, remains the challenge.

Department stores, in particular, face the difficulty of adapting a traditional format to an age of e-commerce, fast fashion and mass discounters. “Department stores have generally fallen behind the times and didn’t keep up and are playing catch up late in the game,” said Jessica Ramirez, a New York-based retail analyst with Jane Hali and Associates, a retail investment research firm.

Macy’s began testing its new approach last year, rolling out upgrades at 50 stores around the country. Those locations performed well enough to move forward with 100 more this year, including at Towson Town Center and the Mall in Columbia. Upgrades, based on shopper feedback and last year’s tests, include new lighting and carpeting, renovated restrooms and fitting rooms, merchandise tailored to specific locations and the new Backstage shops.

The upgrades and new offerings target younger consumers, the rising generation of shoppers, in an effort to become part of their shopping habits.

“We have a strategy at the company that focuses on winning the millennial shoppers,” said Nequa Goodwin, manager of Macy’s at Towson Town Center. “It’s your mom’s department store. She loved it; now you’ll love it too."

The Towson location also revamped its mix with an eye toward the area’s many college students, she said.

Customers are noticing and appreciating the changes. Olivia McCarthy, a 21-year-old senior at Loyola College of Maryland, said she’s found new reasons lately to come to Macy’s — the addition of the bohemian Free People brand and a more efficient way to pick up online orders.

"I was looking for a specific pair of pants that I found at Nordstrom, and then I found them here for half the price, so I ordered them online to pick them up in store,” McCarthy said as she retrieved her order from the store’s new dedicated “At Your Service” department.

With an eye toward the emerging sustainable fashion trend, Macy’s also announced plans this fall to partner with ThredUP, on online fashion reseller, to bring secondhand shopping to 40 Macy’s stores, promising “high-quality secondhand styles, hundreds of new arrivals every month and one-of-a-kind finds.” None have opened so far in Maryland.

Like Macy’s, JCPenney launched an in-store partnership with ThredUP, and it has opened secondhand shops at select Penney’s, including four in Maryland, in Forestville, Hyattsville, Waldorf and Wheaton.

“ThredUp is on a mission to inspire a new generation of shoppers to think secondhand first," JCPenney said in announcing the offering. “Make a fashion statement and choose used clothing for your wallet and the planet," a nod to the increased emphasis businesses and their customers have placed on sustainability.

Other department stores are trying new approaches too, appealing to consumers who demand convenience and value.

Kohl’s began accepting Amazon returns at all 1,100 stores in July, allowing customers to bring in items without a box or label to be sent back to Amazon for free. It’s the "single biggest initiative of the year” for the discount department store chain and already is working to drive customer traffic, executives said. While the retailer has not said how many customers returning Amazon purchases stay to shop, The Motley Fool reported this week that data tracking foot traffic and credit card use appear to show a surge in shoppers visiting Kohl’s.

And Nordstrom is testing the concept of tiny stores that sell no merchandise but serve instead as neighborhood service hubs. The first three Nordstrom Local sites opened in Los Angeles and two more, on New York City’s Upper East Side and in the West Village, opened last month. Consumers can have garments altered, return or pick up merchandise and get fashion advice from personal stylists.

Though no additional Nordstrom Locals are planned, “we follow the pace of our customers," a Nordstrom spokesman said. "We’ll let the customer guide our journey.”

The Seattle-based retailer declined to make anyone available to talk about local initiatives.

Retailers that know their customers, offer unique or customized service and effectively communicate a brand identity have the best chance at success in today’s retail landscape, said Adam Peake, executive in residence for marketing, at Loyola University Maryland’s Sellinger School of Business.

“You need to convince [shoppers] that it’s better or easier or makes more sense to go to the physical store than to sit in your home or office and buy online,” Peake said.“It’s all about what more can they do for me as a consumer than someone else, what can they do for me that someone else can’t," he said. “These department stores need to find ways to reach consumers. It’s not just about a transaction. It’s about what sort of experience are they going to have with this customer and this department store.”

New twists on the in-store experience come amid a backdrop of thousands of store closings as retailers struggle with increased competition and changing consumer habits. So far this year, U.S. retailers have announced plans to close more than 8,200 stores, according to Coresight Research, including Barneys, Gamestop, Gap, JCPenney, Kmart, Pier 1 Imports and Sears. Others, such as Dressbarn and Avenue, are going out of business completely. And longtime youth favorite Forever 21 just declared bankruptcy and some store closings in an effort to reorganize and survive.

Macy’s has faced challenges of its own. In August, the Cincinnati-based chain said its profit would be lower than expected for the rest of the year amid slumping sales and swollen inventory requiring discounting.

The retailer has begun to clear that extra inventory but still is struggling to pinpoint more precisely what its consumers want, said Ramirez, the New York-based analyst. For instance, she noted Macy’s is opening Backstage off-price stores while it already offers heavy discounts in full price stores.

“Macy’s has already trained the consumer that they will not have to pay full price,” Ramirez said. “Most of the problem is that the product isn’t appealing. It’s not something the consumer is looking for.”

She believes Macy’s new strategy “will help to a certain extent,” but only if the retailer can appeal to consumers in key areas such as women’s apparel and private label brands, she said.

Kohl’s, on the other hand, has been “really looking outside the box,” with ideas such as the Amazon partnership, she said. Consumers who drop off Amazon returns are given Kohl’s discount incentives, making them more likely to stop and buy something.

During a tour of the newly renovated Macy’s store in Towson, Goodwin highlighted new services and ways in which departments shifted based on customer demand.

The store has expanded its furniture and mattress departments as well as the assortment and space devoted to menswear, which doubled in size, and activewear, where there’s a focus on brands such as Baltimore-based Under Armour.

“This business is on fire for us,” Goodwin said. Male consumers are “choosing us for every occasion, whether he’s going to a wedding, whether he’s going to a job interview or whether he’s just going to work."

Customers can go to the new “At Your Service" to pick up or return online purchases, exchange or return store items or buy gift cards.

“We really didn’t take anything out,” Goodwin said. “What we did was make bigger the things that were important to the customer. So again, understanding who our market is, understanding who our customers are and who shops with us, we made those things bigger because that’s what resonates with them."

Barbara Redmond, a Towson resident and Macy’s regular for years, was happy to see a Backstage at a Macy’s closer to her home. She said she shops at the department store because the prices are reasonable, the store organized and the customer service “excellent." And it’s easier sometimes to shop in one place.

“You can find just about anything here, from the clothing to housewares," Redmond said. “They meet all needs.”


You can read the original article here. 

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