Marketing Macy's Backstage

Macy's has been opening freestanding and in-store Backstage off-price discount outlets around the country. Meanwhile, it's closing some underperforming department stores and testing new freestanding specialty formats.

Yesterday I visited a Backstage unit housed inside an existing Macy's store. As some news outlets have mentioned, it features a merchandise mix from current Macy's brands and some new brands not currently sold through Macy's. The discounts are deep and the merchandise selection not so deep.

The atmospherics are entirely different than a traditional Macy's. Close your eyes, forget you're inside a Macy's, and you'd almost think you're in a TJ Maxx. Backstage has a little bit of everything on pipe racks--missy sizes, junior sizes, plus sizes, baby/kid's sizes, shoes (lots of shoes), cosmetics, toys, and home goods. Even the checkout area is configured the way you'd expect in a TJ Maxx.

IMHO, opening a Backstage unit inside an existing Macy's store is a great idea because:

1. Backstage fills space that was underutilized by existing Macy's departments, and will probably accelerate inventory turn.
2. Backstage attracts price-sensitive customers who must walk through regular-price racks to get to the separate off-price section, located well into the store's depths.
3. Backstage may attract new customers who previously believed Macy's was too expensive.
4. Backstage can draw from both the Macy's shopper population and shoppers who visit the malls where these stores are located. 
5. No mixed marketing messages here: Backstage's ambiance is differentiated from Macy's ambiance. Shoppers will easily be able to distinguish where they are, even inside a Backstage that is inside a Macy's. Especially in Macy's that have been renovated or spruced up (as was the one I visited). The difference is noticeable.
6. No mixed marketing messages: Backstage's price tags show regular prices and deeply-discounted prices, unlike the usual Macy's tags. In other words, welcome to off-price country. (Nice totebag too, free with purchase.)
7. No mixed marketing messages: Backstage has its own "star" logo (see photo) and it's definitely different from the usual Macy's logo. We're "Backstage" and not on the main stage, get it?