Macy's Eyes Off-Price Opportunity

Off-price retailing is nothing new--Loehmann's, Hit or Miss, Marshall's all were in the business decades ago. Of course Marshall's is still going strong, now part of the booming TJX off-price empire that includes Home Goods and T.J. Maxx.

In recent years, Nordstrom and Saks Fifth Avenue have enjoyed considerable success with their Nordstrom Rack and Saks Off Fifth off-price stores, located in outlet malls and in lifestyle shopping centers. (Saks Off Fifth began as a chain of clearance stores for Saks merchandise and evolved into off-price over time.)

Now Macy's sees significant revenue opportunity in entering the off-price retail space. Its Bloomingdale's department store division has 13 off-price outlet stores, so Macy's has experience in the sector and can evaluate investment vs. profit potential.

Macy's has announced it will shutter 14 of its full-price department stores and open 2 new ones in 2015, as consumer behavior shifts toward online shopping and pursuit of value (meaning lower prices for quality merchandise). The company's possible off-price venture is in the very early planning stages.

Macy's has been an enthusiastic proponent of multichannel marketing. It's also highly social and mobile, with well over 14 million FB likes and 720,000 Twitter followers, plus participation in Apple Pay, among other mobile activities.

Outlet Mall Markets Status Brands at a Discount

Trust me, Woodbury Common rarely looks this empty

One of the busiest outlet malls in the United States is about to get a much-needed update. Woodbury Common, in Central Valley, NY, attracts 13 million visitors each year. It's known around the world for featuring luxury brands at lower-than-retail prices. Busloads of shoppers from across the continent and across the oceans travel hours to get to this outlet mall because its 200+ stores showcase products from many top brands in fashion retailing: Armani, Balenciaga, Burberry, Chloe, Coach, Dior, Dolce & Gabbana, Gucci, Michael Kors, Polo Ralph Lauren, Prada, and many more.

Even early on a weekday morning, this outlet mall is crowded with bargain-hunters eager to snap up status brands at a discount. And no matter what the foreign exchange situation between the dollar and the pound sterling, the yen, or the euro, travelers from abroad descend on Woodbury Common, buy buy buy, and pack their purchases into new (status) suitcases bought at the outlet, too. 

A lot of business comes from word of mouth and from media coverage of the mall as a major shopping/tourist destination. Social media are also helping to spread the word. Woodbury Common's parent, Simon Realty, maintains a Premium Outlets Facebook page (with nearly 200,000 likes) and a Premium Outlets Twitter account (with 55,000 followers). Surprisingly, no Pinterest or Flickr or YouTube account for this super-popular shopping destination. On the other hand, each outlet does its own marketing in addition to the mall's marketing.