BUSINESS INTELLIGENCE/ANALYTICS

Macy’s consolidates merchandising ops, cuts 100 jobs

BY Marianne Wilson

Macy's is streamlining its merchandising operations, expanding its exclusive products and putting increased emphasis on customer insights and data analytics as new CEO Jeff Gennette begins to make his mark on the ailing department store giant.

In a move that will result in a loss of about 100 jobs, Macy's is consolidating three functions – merchandising, planning and private brands – into a single merchandising department organized around five ‘families-of-business’ (ready-to-wear, center core, beauty, men’s and kid’s, and home). It will be led by 35-year Macy's veteran Jeff Kantor, who currently serves as chief stores and human resources officer. Kantor will report to Hal Lawton, the newly announced president of Macy's and a former senior executive of eBay.

The new merchandising structure will be supplemented by strengthened customer insights and data analytics, which the company is expanding to include inventory replenishment and pricing capabilities.

"The changes we are making today maintain our core merchandising skills while massively simplifying our structure and processes for greater speed and flexibility," said Macy's CEO Jeff Gennette. "We are also further strengthening our consumer insights and data analytics capabilities so we can make better decisions faster, balancing the art and science of retail.”

Gennette added that Macy's plans to grow its exclusive merchandise offering to 40% of its business. He called exclusivity a "great customer loyalty tool."

"Having a single lens for each family-of-business will allow us to expedite our strategy of delivering this edited, elevated and exclusive assortment to our best customers," Gennette stated. "To achieve this, we will aggressively grow our private brands while also offering the best national brands."

Macy's estimates it will save approximately $30 million on an annual basis related to the restructuring, some of which may be used for reinvestment in the business. It anticipates one-time costs of approximately $20 million to $25 million associated with this restructuring, to be booked primarily in the third quarter of 2017.

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C-SUITE

eBay exec to head up Macy’s brand

BY Marianne Wilson

In a move that reflects the increased prominence of digital in traditional retail operations, Macy's has hired a senior eBay executive as president of its namesake brand.

Hal Lawton has been named president of Macy’s, effective Sept. 8, 2017. He will be responsible for all aspects of the Macy’s brand, including merchandising, marketing, stores, operations, technology, and consumer insights and analytics. Lawton will report to CEO Jeff Gennette, who previously held the role before becoming chief executive in March.

Lawton most recently served as senior VP, eBay North America, where he was responsible for all aspects of the company's Americas business unit and oversaw a period of sustained, sequential performance improvement. Prior to that, Lawton spent 10 years in various leadership roles at Home Depot, where he was most recently senior VP for merchandising.

Analyst Ray Young, of Gordon Haskett Research Advisors, commented that Lawton's background, particularly at the Home Depot and eBay, makes him one of the most interesting outside additions to the entire department store space — let alone Macy’s — over the past decade.

"Indeed, while Macy’s has yet to entertain acquiring digital native brands (ala the recent Wal-Mart playbook), one has to think that the addition of Mr. Lawton will bring a fresh perspective, one that is arguably long overdue,” Young said. "All told, while the move won’t impact sales or profitability overnight, we think the addition could mark the beginning of a new chapter for Macy’s."

At Home Depot, Lawton was responsible for jump-starting homedepot.com and building it into a nearly $2 billion business. Before Home Depot, he was an associate principal at McKinsey & Co.,

"Hal Lawton has deep expertise at the intersection of retail and technology, a diverse set of business experiences that give him a unique perspective, and a track record of successfully driving a change agenda at scale,” said Gennette. “This is a key step as we look to further transform the business and work through the volatility of today’s retail landscape. Macy’s already has one of the strongest omnichannel businesses in the industry, and with Hal on the team, we will accelerate the integration of digital both online and in our stores to deliver the world-class experience our customers demand.”

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DESIGN/CONSTRUCTION

First Look: Target’s remodeled store in Minneapolis

BY Marianne Wilson

Target has given its two-level store at Nicollet Mall in downtown Minneapolis a $10 million top-to-bottom overhaul that combines the best of the retailer’s digital and technology upgrades, elevated merchandise presentations and fulfillment services, with a goal to making the shopping experience fast, efficient and fun.

The Nicollet Mall store is just steps away from Target’s headquarters and is the first in the Twin Cities area to feature its next generation of design elements. The location is one of 45 remodels the retailer has completed to date, with 65 more stores on track be renovated throughout the fall.

The overall look of the remodeled Nicollet Mall store is more modern, and features concrete floors, wood-plank walls, LED lighting, and elevated product displays. An oversized custom mural, designed by local artists and located on the second floor, showcases historic moments and landmarks from Minneapolis — including a nod to the Dayton family, who founded Target’s predecessor, The Dayton Company.

In other key highlights:

• Merchandise is displayed in “shops” throughout the store. The beauty department, complete with huge digital screens, looks more like a specialty shop, and home products are displayed in lifestyle settings.

• The remodeled food and beverage department was moved to the front of the store for customer convenience. The redesign features a market of fresh produce and grab-and-go items, and items cross-merchandised so shoppers can quickly pull together meals.

• The retailer is testing a “Made in MN” product collection near the second floor entrance, which includes a variety of products from local businesses and makers.

“We’re always thinking about the different ways a guest might want to shop on any given day,” stated Joe Perdew, VP, store design, Target, who heads up the chain’s 175-person design team. “Sometimes, they only have 10 minutes and want to grab an order quickly using Order Pickup. Other times, they have 45 minutes — time to grab a coffee at Starbucks and browse the aisles. And sometimes, they want to shop online from the comfort of their couch. Our goal is to make it a great Target experience no matter which way they choose to shop.”

By the end of 2019, Target expects to have remodeled more than one-third of its 1,800 stores.

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