The other day I saw an article about how Macy’s flagship store on Herald Square will have a whole new floor devoted to luxury.
Really, a whole floor?
I remember when the entire store was actually considered high-end. Not high-end like Bloomies or Nordstrom, but not too far behind. Now they are more like Filene’s Basement used to be, a place to go only for bargains. And the quality has gone way downhill. Even their Thanksgiving Day parade has jumped the shark:
But now that the affluent market is expected to drive up spending, Macy’s is trying to turn themselves around so they can take a piece of your pie, luxury retailers.
Don’t get too upset though. I don’t think they’ll be able to pull it off.
Here’s why.
The affluent are purchasing high and low, not in between. Target and Dior, not J. Crew. If they want luxury, they’ll go to Bloomingdale’s, and when they want value, they’ll go to Target. They know they can get quality in both places.
Macy’s is just dipping its toe in the water. If they really wanted to go after luxury consumers, they would change everything about their brand, not just one floor of one store.
What will be interesting this holiday season is to see how many other middle-of-the-road retailers will try to get their hands in the luxury pot, and how many — if any — will be successful at it.
Jennifer
09 Nov, 2011 - 14:23 pmI have a couple of thoughts related to the above that I would like to share to offer a little bit of a different perspective. I think Macy’s has done more that dip it’s toe in the water…they currently have a Louis Vuitton and Chanel store within a store..so a full designer floor is the next logical step. And i’d argue that their goal of building the largest shoe floor is in direct competition to Saks–whose shoe department has it’s own zipcode. I don’t think Macy’s Herald Square is competing with the Nordstroms or Bloomingdales of the world as some would argure they’re already in that class of department stores, I think it’s stepping up to reclaim its stake as one of NYC’s flagships stores in its own right…and given the amount of tourists with a favorable exchange rate i see pour in and out every day (i work directly across the street)–it just might. However, there are a couple of things that could potentially stand in it’s way…for instance the J. Crews of the world as i do believe that there is a huge portion of the affluent who do shop in the in-between. With Michelle Obama as their proxy spokeswoman and Jenna Lyon’s fresh vision, J.Crew has become a fashion bridge…in one catalog you an find a $395 duchess satin skirt and a $15 t-shirt. Much like Sharon Stone did at the Oscars several years back, we’re seeing a mix of the basic and the extraordinary in luxury and fashion…Missoni for Target and Versace for H&M further reinforce this. The Missoni sale on Target shut down the site for over 2 days and in the aftermath it was found that it was not the aspiring affluent who snapped it all up, it was the affluent woman. Not only was there some unspoken prize in snagging a Missoni sweater for $59.99 v. $599, but in these days of a recession and Occupy Wall Street it helps to legitimize an otherwise over indulgent wardrobe. SO..i guess in the end, i think there is a lot of purchasing being made in the in-between…so now that you know we’re here (in our Missoni dresses paired wit our Old Navy leggings) i suppose the question is what as advertisers are you going to do with us?
Michelle Yue
10 Nov, 2011 - 10:03 amJenn, thanks for each of your comments, all valid. I’m realizing after looking over my post that I made the mistake of saying “I remember when the entire store was high-end” when I was really thinking “the entire brand.” As a Connecticut consumer who frequents Macy’s in Danbury and Waterbury, I see a brand that has gone significantly downhill over the years – both in quality and service. And while I think a luxury floor in Herald Square will help Macy’s compete in New York, I have to wonder when they will start investing in the stores outside of New York that have such a long way to go.
Missoni is another story, and I think while they drove sales very quickly at Target, only time will tell how offering a low-cost version of their product will affect their brand as a whole. If affluent women overall want to snag the $59.99 sweater INSTEAD of the $599 sweater, that could become a significant problem, because – at least I imagine – Missoni is trying to reach the aspirational affluent consumer with their line at Target, not the ones who are actually affluent. If the affluent are buying down within a brand, then that brand eventually ceases to exist as a luxury offering.
I think the question is what will brands like Missoni do with you? What will Macy’s do with you if you live outside of the New York metro area?