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Recently, I read a RetailWire article about Macy’s shutting down 150 of its 500 stores. For those in other parts of the world, Macy’s is a department store chain, and its stores often anchor large shopping malls. However, while that describes more than 25% of its stores, it represents less than 10% of sales. Some might say Macy’s is “trimming the fat” or “getting rid of the dogs.” From a financial perspective, that may be true. But it’s more than that. What they are doing is what any good business would do, and that’s changing to keep up with customers’ ever-changing habits and expectations.
As Macy’s is shutting down stores, it is opening others; however, it is breaking from its traditional large department store footprint and shifting to smaller stores at “off-mall” locations.
Macy’s refers to this change as A Bold New Chapter. According to Macy’s CEO Tony Spring, “This isn’t about shrinking. This is about resizing the portfolio to make sure we are giving people an opportunity to shop where they want.”
This is a lesson for all of us, in any business, and in any industry. If something is working, be excited, but at the same time, be looking ahead because you can’t do what you’ve always done. Otherwise, you will find yourself having to catch up and keep up with competitors who have figured out the way customers think today versus last year – or for the last 10 years.
I’m honored to be part of the RetailWire Braintrust and read their articles daily, often commenting on them. For the article about Macy’s, here is my comment:
Macy’s isn’t going out of business! They are just changing to keep up with consumer demand, trends, expectations and habits. And good for them! That’s what they must do to stay relevant. With the rapidly changing ways consumers shop, you can’t do what you’ve always done. If you don’t believe that, remember the story of Blockbuster Video. Enough said!
Blockbuster Video became a dinosaur when its leadership didn’t recognize its customers were gravitating toward a more convenient way to watch movies at home. Netflix was chipping away at its business by delivering DVDs to customers’ mailboxes, eventually shifting to streaming directly to their TVs. Blockbuster kept thinking customers would rather get in their cars, drive a mile or two – or more – to rent movies, pay late fees, etc. As I said in my RetailWire quote, “Enough said.”
The point is that people – as in customers – change, and you must do so as well. So, embrace what’s working today, but at the same time, study the most successful companies, both inside and outside of your industry, to see what they are doing to keep up with customers’ new habits and expectations. Be bold like Macy’s. Make the changes needed to stay relevant. Remember, you can’t do what you’ve always done anymore!
And, if you’d like to learn more about your customers’ ever-changing habits and current expectations in customer service and CX, click here to get our new Achieving Customer Amazement study (sponsored by RingCentral).
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