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With C-Suite Changes on Deck, Macy’s Wants to Make Managers ‘CEO of the Store’

According to Macy’s chief stores officer Marc Mastronardi, discovery, convenience, service and engagement are the keys to brick-and-mortar retail success.

But getting there has forced Macy’s to re-examine how employee operates and rethink the technologies they need to meet customers where they are.

“Certainly over the last few years of coming through the pandemic, we’ve recognized that, if you’re going to make a trip to the store, it’s got to be because you want a really enjoyable experience,” Mastronardi said during at the Shoptalk conference in Las Vegas on Sunday.

The department store retailer has evolved away from the task-centric approach so commonly seen in merchant technology deployments. Now, instead of using devices to manage markdowns and chase down products for shipping, store employees engage in customer-facing activities such as mobile checkout and as well as voice-activated, associate-to-associate communication powered by mobile communication platform Theatro, Mastronardi said.

Plus, Macy’s also wants to erase the divide between digital and physical in the name of creating a richer experience. Customers shopping on its website can connect with in-store stylists who’ll build them a digital storefront packed with personalized product recommendations tailored to their particular taste.

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So far, this tactic is driving “super high” conversion rates at “multiples of what you would get on regular digital conversion,” Mastronardi said. People like to test and buy beauty products and special occasion dresses after interacting with a stylist, he pointed out.

“It’s been a really great experience for the colleagues that are in the store that are building a much broader client base than just the ones that walk through the front door,” Mastronardi said.

Shoppers visiting the Macy’s beauty department can virtually try on different products thanks to augmented reality technology (AR). The retailer first used AR and virtual reality technology in furniture and beauty in 2018 before expanding the technology to all app users the following year.

And although Macy’s hasn’t said much about its plans, it’s using IBM Watson to make e-commerce better for people shopping digitally.

“If you’re asking a question on our website, it is IBM Watson that is helping answer that,” Mastronardi said. “That’s also the technology that our call center teams use—if you call into a customer service center, what they are calling on is IBM Watson technology to help provide more information.”

Macy’s is positioning store managers to be “the CEO of the store,” according to Mastronardi. This gives them greater authority over expense management, hours of operation and staffing decisions.

“In the past, we would have really tried to drive that from a central perspective,” Mastronardi said.

Marc Mastronardi, chief stores officer at Macy’s, with Melissa Repko, retail and consumer reporter, CNBC.
Marc Mastronardi, chief stores officer at Macy’s, with Melissa Repko, CNBC retail and consumer reporter. Glenn Taylor/Sourcing Journal

Macy’s “innovative selling model” rolling out over the past 18 months calls for store associates to be fluent in a little bit of everything, an about-face from days past when employees were trained on specialized knowledge unique to perhaps just a single department, according to Mastronardi.

“To get everybody to play the role of being able to do everything, you really had to go through a lot of very different training,” Mastronardi said. “We’ve actually changed a lot of hands-on training and changed the training from being a point in time to being all the time,” with an emphasis on on-the-floor merchandising and experiences.

Macy’s national development programs to train store managers regularly brings its top 50 store leaders into the boardroom to essentially crowdsource the retailer’s go-forward development.

In his words, it’s “teach the teacher, train the trainer,” so that knowledge effectively trickles down from the manager to the floor associates via hands-on engagement.

That’s not to say that specialization is entirely a thing of the past. Employees staffing the beauty, jewelry and furniture departments still need to know those categories top to bottom if they want to win customers.

Echoing CEO Jeff Gennette during Macy’s fourth quarter earnings call this month, Mastronardi touched on the department store company’s off-mall ambitions. It currently has eight Market by Macy’s stores and two Bloomie’s locations, which generated fourth-quarter comparable-owned-plus-licensed sales increases of 8 percent and 12 percent, respectively. In contrast, Macy’s saw comparable sales for its banner stores fall 3.3 percent, while Bloomingdale’s were up just 0.6 percent.

“These are 35,000-to-40,000-square-foot power center retail destinations,” said Mastronardi. “Two-thirds of retail business is sold off-mall, so we’re just getting into that space and it’s been super exciting.”

Changing of the guard

Gennette will retire next year in February after four decades with the company, Macy’s Inc. announced Wednesday.

The company’s board elevated Tony Spring into the role of Macy’s president CEO-elect, chairman and board member responsible for digital, merchandising, customer and brand teams from his current position as chief executive of Bloomingdale’s, which he’ll continue to oversee along with the Bluemercury beauty business.

Chief financial officer Adrian Mitchell will take on additional duties as chief operating officer and head up the stores, supply chain and technology functions on top of running finance and real estate.