In the midst of a season of progress, Macy’s Top Merchant Talks strategy
Macy’s Inc. has a moment.
Like many retailers capitalizing on consumers’ current financial health and eagerness to shop, Macy’s sales volumes this year are above 2020 and 2019 levels.
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Strategies to diversify the offering, experiment with smaller formats and capture market share in younger segments where the retailer has long been lacking appear to be working, and despite continued store closures, the COVID-19 and inventory and labor shortages, perceptions of the business are changing for the positive. Since the start of the year, the share price has doubled and some Wall Street analysts consider it still undervalued.
Nata Dvir is key to maintaining momentum and growing Macy’s business. The 16-year-old Macy’s veteran took on the role of director of brand merchandising for Macy’s last February, after serving as senior vice president and general business manager for beauty and commodities. Previously, she oversaw a variety of categories, including men, fine jewelry, women’s shoes, beauty, accessories, and food. Dvir now oversees all merchandise categories and private labels, and reports to Jeff Gennette, President and CEO of Macy’s Inc ..
In the following Q&A, Dvir discusses his program, the evolution of Macy’s assortment, and responds to some criticism that has long haunted Macy’s.
WWD: As Macy’s new chief merchant, are you bringing a different agenda to the business?
NATA DVIR: Much of what I have worked on, particularly in the beauty field, over the past four years has been about how to attract a new client, a younger and more diverse client, and how to lead the brands we do great business with and attract new brands. By stepping into this role, there has already been a tremendous amount of good work built into the merchandising strategy. One of the things that I’ve been tasked with and focused on is putting this young client front and center, in all of our categories. We’re talking about the 40-year-old client. I’m actually thinking of the 28 to 45 year old client.
WWD: Your CEO said Macy’s attracted 5 million new customers last quarter. Who are they and where do they come from?
ND: Many come from our online and in-store business, as well as new categories we focused on – contemporary and beauty. We are also seeing a lot of new home customers. They see the breath of the assortment we have and buy in all of our categories. We are a large store. We have a lot of different categories, so it’s all about focusing on getting the right assortments, simplifying our prices, being more relevant to a younger customer who increases the customer basket when they shop. purchases in all different categories.
WWD: Where are the opportunities to expand the assortment?
ND: Macy’s has always been strong in the special occasions, bespoke clothing, dresses, shoes and the gift category like fine jewelry and perfumes. These categories will continue to be important to us. To complement the customer shopping experience with a more casual clothing assortment, thinking of these outfit complements, whether it’s fashion jewelry or how we are growing our handbag business that has always been a strong business for us, it’s about putting the rest of our assortments together so we can have a full basket for our customer. This is why we are so excited about toys and [merchandising efforts] around this millennial mom, who makes us focus on toys and children and also on clothes for her. That’s why I love this partnership with Toys “R” Us. We will have more than their exclusive brands. We’ll have all the toys that come under the Toys “R” Us name, you see it already online, and everything from Mattel, Barbie, Fisher-Price. And then in 2022 it will come to life in stores.
WWD: What sets Macy’s apart?
ND: Customers love the experiences we have, our special occasion offering, our giveaways, and big brands – national brands and private brands, and there is simply great quality and value with both.
WWD: With the way Jeff Gennette describes the assortment, from luxury to low cost, intergenerational, it’s like Macy’s is trying to be everything for everyone. Is it true?
ND: We try to be what our client needs us to be – occasionally appropriate fashion, casual wear and experiences. I don’t know if that’s it for everyone. We know the client that we have and we are simply looking to grow with that client. The low-cost luxury assortment, combined with a wide range of categories, brands and prices, [provides] also an element of convenience. With this line of products, we often see customers shopping with us.
WWD: Does this vast reach make it difficult to have a clear identity, to stand up for something?
ND: What we have is a really good focus and what I hope I’ve brought to that role in merchandising is a focus on certain categories and the role that each category plays in the customer journey and how it all connects. One thing I always ask my team is “Why would a customer buy this from Macy’s?” »Why Macy’s for a [specific] Category. Sometimes it’s about service and experience. Sometimes these are large assortments. Sometimes it’s a question of price, so being really definitive for each of our categories, around the role they play in the industry and the role the category plays at Macy’s, that has been the goal. So I stepped in to continue winning in several categories and to build on a few of them to really gain market share.
WWD: Is it a matter of choosing your spots, so to speak?
ND: You cannot choose a couple. You need to have enough to have a customer journey. I often think of this relationship that the customer has between the categories. We want this Millennial mom to buy toys, buy back to school. We also want her to buy beauty. And if we only make him buy one or two of these categories, we don’t win. It’s really about making the whole trip.
WWD: What categories do you think of for the future? Animals, technology, electronics?
ND: It is important for us to keep testing new categories. This is how we learned about the demand for toys. We launched toys two years ago in Backstage (the non-price format) and [later] at a high price and now we are expanding it. We will always be testing new categories, mostly online, Macy’s style. So when you think of pets, you will see pet fashion. You won’t see us selling dog food today… Technology we’re always looking to find out. At this point, it’s not a big growth category for us. What you’re really starting to see is a focus on the categories we’re good at and their expansion. I always think of textiles. One of our fast growing (owner) brands is Hotel. We have great credibility with this brand. So many people know it. We have launched a new brand called Oak. This builds on our credibility and excellence in private labels and textiles. So it’s not just [adding] new categories. It’s about taking the categories we’re really good at and making sure we continue to dominate by expanding the assortment.
WWD: How does Oak compare to Hotel?
ND: It’s very different, definitely more laid back, laid back and effortless in its aesthetic. The materials are simpler and there are new textures. You can smell more of a mixture in the cottons, and it’s priced lower than the hotel. It is truly made for our contemporary buyer.
WWD: Is there any progress in building Macy’s contemporary fashion business?
ND: I am excited about what the team has done in contemporary clothing. This is where we’ve always had a lot of assortment, but we’re bringing it together in new ways for our client and adding more breadth, brands and assortment. Earlier this year, we launched a contemporary sitelet in the “Current Trending” section of our website. It actually took a lot of the assortment we had and put it together in a way our customer enjoys shopping. [Product detail pages] are more improved. The imagery is much more inspiring. Putting it all together starts to create this place for all things contemporary. In addition, in 160 stores we group these brands, not only in clothing, but you will see it in shoes, beauty, in all of our categories. It’s not just about having a category to [pursue] this client. It must be all of our categories. The flows and adjacencies have changed and come closer together, so it’s easier to find for our customers.
WWD: How do you manage inventory?
ND: We spent a lot of time last year improving the productivity of our inventory, with healthier sales. As we buy less, we promote less, making it easier for customers to find what they are looking for. If anything, you’re going to see a cleaner, more streamlined experience for customers.
WWD: Has inventory reduction been forced due to supply chain issues?
ND: A little was forced, but part of it was very intentional. As an industry this was something that had to happen and it just gave us the nudge to do it, the lessons of healthier sales and the benefit you see in our revenue.
WWD: Where do you get your fashion inspiration?
ND.: I am inspired by my team and our [vendor] the partners. I am a city girl. I grew up in Manhattan. I get my inspiration from walking around. I am often caught looking at Instagram and multitasking during meetings. I am a very curious person and I like to be inspired by my environment, whether through our team or externally. Fashion Week is another piece that I enjoy, being a student. But we have an amazing fashion office team constantly sending us reports. Even in a virtual environment, we feel like we are staying connected. Fashion shows have quickly gone digital and allow us to see them virtually. The speed must continue as customers are looking for trends faster and faster every day.
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