Macy's Backstage: Too Little, Too Late

Customer Engagement
Customer Experience
Macy's Backstage is more of the same, which is a problem as new competitors enter the retail space.

Macy's Backstage is more of the same, which is a problem as new competitors enter the retail space. Introduced earlier this year, the Backstage discount stores were described as a way for Macy's to bring in more customers. Yesterday, I stopped by a Backstage store in search of a swimsuit. I was curious to see what the company had come up with to draw shoppers to its physical stores. Unfortunately, there was very little to distinguish the store from any other discount retailer. The store had opened just a few months ago, so everything looked new and the merchandise was well-organized. At 5:30 pm on a weekday, though, I only saw two people on the sales floor and I had to leave the dressing room to look for additional sizes myself. After trying on a few swimsuits, none caught my eye.

I took a lap around the store after leaving the dressing room and saw a "Juice Bar" for charging mobile devices, which was interesting, but I still left the store empty-handed. Now that I've checked out the new store, there's little reason for me to come back when I can also visit similar stores like Kohl's or T.J. Maxx.

Meanwhile, Amazon and Google continue to encroach on retail. Last week, the Wall Street Journal reported that Amazon will be rolling out a line of private-label brands for household goods. This push adds to the e-commerce giant's existing private labels for fashion apparel and electronic items like USB cords and batteries.

Amazon is also venturing outside of the Internet. The company recently opened a physical bookstore in Seattle and plans to open a second bookstore in San Diego over the next few months. No word on whether Amazon plans to open other types of retail stores, but if the bookstores are successful, it's not difficult to imagine the company branching out to other items.

In addition to Amazon's retail moves, Google has unveiled "Shopping ads on image search." Here, retail ads for related products will appear as shoppers browse Google Images, which consumers can click on to purchase. Retailers will also be able to let customers know if they can purchase the item online and pick it up in-store.

Data behemoths like Amazon and Google also have an advantage over traditional retailers, maintains Kurt Heinemann, CMO of Reflektion, an e-commerce personalization vendor that was founded by a former Google engineer. Both companies are "data rich when it comes to shopper intent and are further stuffing their coffers with even more shopper intelligence," he says.

This is an advantage, Heinemann explains, because both companies can leverage enormous amounts of search and purchase data to gain insights into the products or categories that consumers are interested in. Traditional retailers have struggled to tie together their data in the same way since much of it is bogged down in disparate legacy systems.

If Macy's is going to survive, the company must figure out how to deliver what customers want in a way that stands out before its competitors do.