The new Macy’s Herald Square B8ta shop (which they acquired an equity interest in) is not just a cool, modern looking shop that sells cool, modern stuff adjacent to the already cool pop-up shops, The Market@Macy’s. It is all of that plus a learning and innovation platform to discover and try trendy gadget products. It’s also a cool experience. Even more powerful, its software platform will accelerate the expansion of The Market@Macy’s. Co-founder and CEO of B8ta, Vibhu Norby was quoted, \”We figured something out about retail that no one else has. If you shop in one of our stores, you will feel different because we have gone to such a great length to remove the idea of your visit being about buying a product.\” There are nine freestanding B8ta shops around the country and several shops in Lowe’s called SmartSpot shops, focusing on smart home products.
The B8ta concept is to provide a platform for emerging product/brands that are not available in the mainstream retail sectors or online, including Amazon. B8ta charges manufacturers a subscription fee for a specified period of time to place their products on the platform, either for sale or to test and measure consumer reaction and demand. The fee arrangement is a major attraction for new products, allowing the product provider to keep 100 percent of total sales.
The Market@Macy’s has a similar fee-model; however, it is based on a one to three-month cycle to facilitate a continual new product rotation. B8a’s shop has sleek display counters for consumers to touch, feel and try out new products with an accompanying screen that describes the product, its origins, its uses, etc. The Market@Macy’s allocates space for a “street” of small pop-up shops featuring the same kind of innovative, undiscovered new products and brands, as well as existing brands that want to showcase their innovations. So far, The Market@Macy’s primarily features apparel, beauty and accessories categories.
The power of both of these platforms is their continual rotation of new, innovative products and brands. This alone provides a compelling new experience for loyal Macy’s customers and it’s a strong lure to attract new customers. Both compel shoppers to come into the store more often to check out what’s new.
The experience is similar to the classic “treasure hunt” at Costco or TJ Maxx, as well as the rapid rotation of new lines in the fast-fashion sector. Furthermore, the experience in the B8ta and Market@Macy’s shops is interactive, creating the perception of a personalized transaction.
The Tech-Tracking Accelerator
Think of Market@Macy’s and B8ta as an “intelligence labs.” They both use RetailNext’s software platform to observe and collect customers’ shopping behavior, traffic flow, dwell times and customer engagement — including measures of likes/dislikes, etc. Out of this intelligence comes the inspiration for an explosion of relevant, new products. The software platform measures customers’ in-store behavior to accelerate the rotation of new products and brands and assures that B8ta and Market@Macy’s are rotating the new offerings that customers most desire. And this can be drilled down to a personal level.
E-commerce helped jumpstart the retail use of machine learning and data analytics to drive personalization. Amazon led the way with analytics establishing a clear advantage over brick-and-mortar retailing with the ability to scrape and collect mountains of information on every person that visited their site. They were then able to drill down to identify minute points of personal needs and desires for each consumer. Indeed, Amazon has reached such a level of super-predictive analytics that they know what you need or want before you do.
This level of data analytics is now available in the physical world of retailing. Stores will be recast as experience centers, innovation labs and data-collection systems. Eventually, traditional retail will also know what you need or want before you do.
Macy’s EVP of Business Development, Marc Mastronardi, said, “The Market@Macy’s concept, alongside a partnership with B8ta, gives us the opportunity to bring new and unique experiences to the in-store consumer. They allow us to bring the customer new products, new services, new entertainment ideas and more. Each location is uniquely measuring customer engagement and providing insights that allow us to better understand our customer. We are excited for the continued evolution of this concept and partnership.”
Not Just a Bunch of Pop-Up Shops
So, for those who view The Market@Macy’s and B8ta as just a bunch of interesting new pop-up shops tossed into high traffic spaces to attract new consumers and raise the visitation rate among regular Macy’s loyalists, think again. Yes, that’s part of it, but even though it’s in its infancy, it could also be the beginning of a complete paradigm shift of the meaning of “store.”
Famed futurist, Doug Stephens said in an email to “Retail Dive” that Macy’s emerging willingness to embrace this new state of the art in retail could go far in redefining it, and maybe even the department store model more broadly. He said it involves major shifts in how a retailer evaluates success.
He went on to say, \”Once Macy\’s began to free itself from the tyranny of sales and profit per square foot of floor space and instead began to create and measure \’experiences per square foot,\’ their stores could become the most powerful media channel they have at their disposal, driving sales and customer advocacy across channels.”
Also, imagine if hundreds or thousands of Macy\’s vendors were paid subscribers to receive insights into the performance and consumer engagement with their products,\” Stephens said. \”That could amount to a considerable revenue stream.”
The Usual Caveat
As always, during this embryonic period of the industry’s chaotic transformation, while vision is everything, execution trumps everything.
Be bold, be persistent!