The giant Macy’s chain announced last month that it was closing about 100 stores early next year. Not really unexpected news out of corporate headquarters in New York, given the fact that the department store operation has been registering more than its fair share of bad financial news over the last few years.
What makes this announcement so interesting is the fact that most of these stores—perhaps all of them—are profitable. Macy’s is closing stores that make money, and that is almost unheard of in retail.
But there is a method to Macy’s madness, and it is something that all retailers should closely follow. Macy’s executives have finally come to the correct conclusion that the chain is simply too large to maneuver for the next generation of shoppers. Macy’s is a slow-moving, even clumsy, battleship at a time when more nimble cruisers and even PT boats are winning the retail wars.
To survive, Macy’s executives realize that they need to streamline the chain, cut stores to a more manageable number and be prepared to make dramatic changes chain-wide quickly and efficiently. To do anything else could mean the end of this retail mainstay. At a minimum, if that happens, what are the rest of us going to watch on television on Thanksgiving morning?
Macy’s obviously does not want this to happen either. The newly smaller company (and do not be surprised if the chain closes more stores in coming years) will try its best to cater to a wider spectrum of shoppers. It will offer a more distinctive product assortment and a more refined shopping experience. Frankly, it is the only thing it can do.
Pet stores are in the same boat. Though most are not the same size as Macy’s, they still need to understand that their consumers have more options today than even just five years ago. They need to fine tune their product mix and enhance the overall shopping experience to ensure that they stay relevant in today’s market. Notice I did not mention anything about cutting prices, which is probably not necessary if you are already competitively priced.
The day of the big retailer is coming to an end. Those that survive will do so by being able to change on a dime as consumer trends and needs shift. Battleships are big and powerful, but no one wants to be one these days.