How Many Signs Do You Need?
This week several friends and associates called me to ask if I had heard the news about Macy’s. The department store announced it is closing 150 underperforming stores across the country, will open new stores, and will focus more on attracting luxury shoppers. Of course, I had heard the news, and understood well the underlying factors. I have been writing about it, speaking about it, recording videos about it, and consulting on it, for ages.
Growing up, one of my favorite commercials to hear was a happy Macy’s commercial. At the time, they used the tagline and jingle, “At Macy’s we’re a part of your life!” Back then, this was a plausible statement, as Macy’s still occupied a dominant place in the American psyche as the world’s largest department store. I loved going to Macy’s, and the store’s legend, including its flagship New York location with wooden escalators and starring role in the 1947 Christmas film, Miracle on 34th Street did not escape me. But by the time of the 1994 remake, Macy’s was in trouble, and its rival across the street, Gimbels, also referenced in the original film, had shut down. Consumer habits and shopping had changed dramatically. In a world where you could get anything you wanted, from any number of shopping locations, the big department store no longer had its allure. Today, in a world dominated by Amazon, retail overbuilding across the country, countless brands, Shopify sites, and everything else, Macy’s must shift its focus to stay relevant, and in business.
This brings me to luxury, and why the segment is so attractive to many retailers. Despite news accounts that suggest otherwise, everyone lives better today than ever. Consumer expectations remain high. What was once upscale merchandise is now the norm. The good news is that a larger segment of the population buys high-priced goods. Even better news is there is an elite buyer who will not flinch at purchasing goods and services significantly higher priced than norms and is less focused on discounts. Affluence and wealth are growing and will continue to do so. To live comfortably in this world, employees must be paid more, and businesses must become more adept at bringing in new revenues. We are on a steady upcycle. Prices are not going down.
Growth in all product categories means interest in luxury has exploded. Most relevant is the consumer’s desire for increasingly interesting, unique, and personalized products, services, and experiences. Unlike the days of old, these consumers do not mind if what they buy does not come from a big department store. They will buy from you, the luxury entrepreneur, or small luxury brand, enthusiastically.
Yes, you are now competing with Macy’s. They know it and are therefore focused on becoming more and more upscale to differentiate their brand and capture a segment of the market where profits are more secure. Not only is Macy’s doing this, so are other brands, some of which have consulted with me. If you are in luxury, you are where the growth is. Do you need any more signs?
Don’t worry if you do not have the overhead for hundreds of locations and can’t cover the costs associated with operating the world’s biggest department store. You’ll be just fine. However, you must become extraordinary at attracting and keeping high-end clients. Now is the time for you to tell your customers and clients, “We’re a part of your life!”
Want to learn how to capitalize on changes in retail? Write me: info@andretaylor.com
At Taylor Insight we help luxury and premier businesses excel and grow by attracting, retaining, and growing with affluent clients. We provide exceptional strategic, marketing, sales, and service guidance, and a portfolio of high-impact learning programs.
