Macy's to Open Up to 30 Off-Mall Stores

Macy's announced on Tuesday that it will open up to 30 smaller stores in strip malls over the next two years, as the retailer chases customers out of shopping malls and into bustling suburbs. The expansion marks an inflection point for the department store operator, which has looked for ways to refresh its legacy brand, cope with dwindling mall traffic, and compete with online retailers that have stolen away shoppers. Macy’s has tested the shops, which are roughly one-fifth the size of its traditional mall stores, for nearly four years. The stores offer a slimmed-down mix of merchandise, host local events, and have a more modern and open look. Plus, they’re next to big-box stores, grocers and popular off-price retailers like T.J. Maxx.

Total Retail's Take: Macy's is taking steps to distance itself from its traditional mall-based store locations, finding success with smaller, strip mall-based stores. The department store chain is still committed to brick-and-mortar retail, yet in a different format. One of the strengths Macy's can use to its advantage in its fight for customers with online retailers and marketplaces is its expansive physical footprint, offering the omnichannel services that consumers are increasingly looking for, including buy online, pick up in-store (BOPIS), cross-channel returns, and ship-from-store. Consumers have responded positively to Macy's smaller-format test stores, noting they are easy to shop, neat, and staffed by helpful and friendly employees. With brick-and-mortar critical to Macy's future, finding its customers' preferred store format is of high priority for the department store chain.