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Faced with some surprising sales declines and threats to its status as the leading department store brand, Macy’s has determined that the best strategy is to pursue those elusive young shoppers known as Millennials. Accordingly, it has implemented a $400 million renovation effort for its flagship New York City store, testing out various options that might attract more of the market of shoppers between the ages of 18 and 35 years.

141945670-SIn that flagship store, the basement level is newly designated “One Below,” and it offers a notably different shopping experience. In addition to merchandise designed to appeal to Millennials, it provides services such as blow drying stations, jean embroidering, and watch engraving. Shoppers can use a 3D printer to create their own custom jewelry, and a touchscreen wall allows them to take high-quality selfies.

These tests, if successful, are likely to spread to other locations as well. In the meantime, Macy’s is opening more off-price stores, seemingly following the successful lead of Nordstrom with its Nordstrom Rack stores.

These moves reflect the conventional wisdom about what Millennials want. In particular, studies show that these young consumers tend to devote their spending more to personal or digital services than to apparel. They also suffer higher levels of debt, mostly due to student loans, and earn less on average than previous generations. As a result, they generally seek lower priced options for their fashion choices.

This preference puts them in direct contrast with the previous big cohort of shoppers, namely, the Baby Boomers. The consumers in this age group, as they start to retire from the work force, exhibit strong spending patterns and have enviable levels of discretionary income and time. From this perspective, some observers suggest Macy’s might be going after the wrong age demographic—unless Baby Boomers like selfie walls too.

Discussion Questions:

  1. What is Macy’s plan to attract Millennials?
  2. Do you shop at Macy’s? Why or why not?
  3. Given your answer to question 2, do you think Macy’s Millennial strategy will be successful?

Source: Marina Nazario, “Macy’s Has a Master Plan to Capture the Most Difficult Customers,” Business Insider, October 3, 2015