Macy’s Bets Big On Backstage

Off-price retailers continue to hold considerable sway with today’s savvy shoppers.

The secret has been out for some time that you can find tremendous deals at these establishments without sacrificing quality, and that’s a big part of what leads shoppers to keep coming back. You never do know what you’re going to find as stores such as TJ Maxx, Ross Stores, or Burlington Coat Factory, and retail behemoths have gotten wise to that concept. As Retail Dive shares, one of them is even in the midst of making some noise in this sector of retail in a big way. 



Macy’s has been quietly rolling out its store-within-a-store off-price concept, Backstage, and the early returns are promising. More are on the way, and we can count Ken Morris, co-founder, and principal of retail consulting firm BRP, in the camp of those that think Macy’s is onto something.    

"Because I believe that it will generate business for the traditional stores. Traffic is down across the board in these department stores,” he told Retail Dive in an interview. “They need an idea that will generate traffic. This is just one. They have to create this theater of shopping. ‘Treasure hunt’ is part of it."

Backstage has already debuted in markets such as Philadelphia, Atlanta, and Memphis, and the company plans to have more than 40 locations by the end of 2017. Macy’s CEO Jeff Gennette noted on a call with analysts earlier this year that the company is mindful of the pitfalls that come with the new concept, but the obvious benefits outweigh that.  

"We had excess space where we could add the Backstage idea, and so then we started to play with what the offering would be," he said. "And we were cautious about cannibalization, making sure that what we put in the Backstage section of that store wasn't just cannibalizing what was on the full price side."

Shelley E. Kohan, vice president of retail consulting with RetailNext, notes that Macy’s can tap into the treasure hunt mentality displayed by many shoppers quite quickly with the new brand. 
"The pricing strategy has to be crystal clear — they can’t guess if is this going to be cheaper tomorrow," she said. "Part of model of the outlet business is to make sure people say, ‘Oooo, what’s coming in today?’"



Backstage is already generating a ton of buzz, and that’s even more intriguing when you consider this nugget offered up by Michelle Israel, Macy’s senior vice president of off-price retail. 

"We haven’t activated the marketing plans for Backstage yet, so it’s too soon to tell. What we do know is that the Macy’s Backstage shopper is fashion savvy and cost conscious,” she said. “She enjoys the thrill of the hunt and is always excited to return - at least on a weekly basis - to find new and exciting items to shop."

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