Inside Macy’s plan to grow its private brands
Modern Retail covered Macy's Inc.’s bold step to revitalize its business by announcing the launch of four new private brands by the end of 2025, starting with On 34th, set to debut in stores, online, and through the Macy's app on August 17. This initiative comes as part of Macy's strategy to rejuvenate its brand portfolio and tap into the growing consumer demand for unique and exclusive product offerings.
Carol Spieckerman, a retail analyst and president of Spieckerman Retail lauded Macy's for not just relying on trend intuition but for leveraging extensive customer data and analytics to inform its strategy. This data-driven approach, she notes, equips Macy's to make informed decisions that align with consumer desires and market gaps, providing a solid foundation for the success of its private brands.
Macy's current portfolio boasts more than 25 private brands, contributing to approximately 16% of its annual sales in fiscal 2022. With a goal to increase this share and reclaim its pre-pandemic levels, Macy's is focused on developing these brands across various categories, including clothing and accessories. The emphasis is not only on introducing new lines but also on revitalizing existing brands and discontinuing those that no longer resonate with customers.
The On 34th brand targets the "adulting-to-primetime" demographic, particularly those between 40 and 60 years old, a customer segment that Macy's identifies as underserved. The launch of 750 SKUs, capable of creating over 1,000 mix-and-match outfits, is a testament to Macy's commitment to offering versatile and accessible fashion. The promotion of On 34th will leverage in-store brand shops, online videos, digital landing pages, and a robust influencer campaign.
While Macy's shows promise with its private-brand overhaul, the retail industry has seen mixed results with such strategies. Spieckerman underscores the inherent risks and rewards, noting that while private brands can offer higher margins and greater brand control, they also come with increased responsibility for inventory management.
Amidst this landscape, Macy's stands out with its comprehensive strategy to fortify brand identity, improve product quality, utilize strong data insights, and foster original design. With the retail sector continuously evolving, Macy's aims to not only meet but exceed customer expectations through its private-brand innovation, setting the stage for growth well beyond 2025.
