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Macy's Tech Strategy Is Promising, But Scattershot

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There were high hopes for “The Market @ Macy’s” when the retailer launched its turnkey in-store pop-up concept earlier this year. Now, the department store retailer is adding the concept to new stores and looking to take the buzz surrounding The Market to a new social level via a partnership with Facebook.

Last month Macy’s announced that it was expanding the Market to two more of its locations, one at the Lenox Mall in Atlanta and the other at Century City in Los Angeles, to bring its total to 12 across the country. In nine of the Market shops, Macy’s is partnering with Facebook, which will place nearly 150 e-commerce brands in the path of the department store’s customers.

“Macy’s shoppers will have the chance to meet businesses such as Love Your Melon that sells hats and apparel to help in the fight against pediatric cancer or Charleston Gourmet Burger Company that started from a backyard barbecue and has expanded to reach customers in all 50 states,” said Michelle Kleindirector of North America marketing, Facebook, in a statement.

It was a move that some on the RetailWire BrainTrust saw as promising in an online discussion.

"The Market @ Macy’s tie-in with Facebook makes perfect sense; we see an e-commerce company on our timeline that’s intriguing and now we can physically shop it in-store," wrote Georganne Bender, partner at Kizer & Bender. "With this move Macy’s has broken the fourth wall of retailing."

In addition to the Market/Facebook news, Macy’s highlighted its use of virtual and augmented reality tech in stores. By early November, Macy’s expects to have completed the launch of VR for Furniture in 69 Macy’s stores across the country. The chain has seen the overall furniture basket sizes in stores with the virtual reality tech climb 60 percent higher than those without it. Customers using the technology are also less likely to return purchases, with the percentage of returns in VR stores falling to below two percent of all transactions. Another benefit of the technology is it allows Macy’s to feature more of its furniture selection without taking up space on the sales floor.

Macy’s is also using AR in furniture. The retailers launched the “Visualize Your Space” app to enable customers using iOS devices to see how various pieces of furniture would work in their actual living spaces. The chain plans to add an Android version of the app in 2019.

Beauty is another area where Macy’s is using technology to improve the customer experience. The chain is using in-store virtual mirror technology to expose customers to more than 250 beauty items and use a kiosk to see how they would look using the products. The technology is currently available at 250 of the chain’s stores and Macy’s testing a similar feature on its mobile app.

Some on the BrainTrust were excited about the tech tests.

"I see nothing but good news here," wrote Dave Bruno, marketing director at Aptos. "They are leveraging sound analytics and pilot store successes to drive further investments in technology-driven experiences and customer-driven assortments … two of the pillars of modern retailing success. Well done, Macy’s!"

But others didn't see a clear line tying all the new tech solutions and relationships together.

"This is all tactics," wrote Professor Gene Detroyer. "I don’t see a strategy. Macy’s must say, 'we are no longer the old department store, we must become something different. I don’t know what the 'different' is. I do know the department store model has outlived itself."

"Macy’s is moving in the right direction and it is pleasing to see management try and test new things as well as advance existing ideas," wrote Neil Saunders, managing director of GlobalData. "However, the issue I always have with Macy’s is that while this all sounds good, the reality on the ground – especially in more remote stores – is still lackluster and down-at-heel."

"Macy’s talks a good game, but it needs to pull these initiatives together into a coherent strategy to defend its department store business," wrote Mr. Saunders.