What: Macy’s top executives discussed their key strategies and formats for the department store’s future growth at the Morgan Stanley Retail Roundup.

Why it is important: With Macy’s CEO announcing his retirement, there’s been concern regarding the retailer’s future path to profitability and relevance.

At the Morgan Stanley Retail Roundup, Macy’s CEO and CFO laid out the roadmap for the future of the retailer with strategies for growth being a main focus.

The retailer has seen pressure on all income tiers as they look at their proprietary credit card data. Making sure they have the right inventory for consumers who are going to be more discerning with their purchases is a top focus as economic pressures continue this year.

Macy’s has rebuilt its private brand portfolio which makes up 16% of its business presently. Based on customer research, Macy’s customers are looking for comfort first, followed by versatility and style leading to the refreshing, amplifying, retiring, and adding to its offer.

The retailer also plans to intensify its luxury offer at Bloomingdale’s, in the beauty category at Macy’s, and Bluemercury. In Macy’s and beauty they see a big luxury opportunity, resulting in the decrease of bigger brands on the floor and bringing in niche luxury players to see success.

The operations and localised assortment of off-mall formats will also be a focus for Macy’s Inc. Currently, there are two Bloomie’s with a third location opening soon and eight Market by Macy’s locations, with the metrics being significantly better than its department store locations.

Macy’s emerging marketplace is also an exciting opportunity for the retailer as they can offer more products with less risk through this business model. They have seen a great response from customers so far and expect to see a meaningful impact on growth in future years. Electronics and video games are an example of this as they were gigantic sell-throughs for the retailer.This year, the retailer has a goal of reaching 2,000 brands on the marketplace.

Personalisation will be a major contributor to Macy’s growth as they continue to test new technologies and learn more about traffic patterns through the Retail Next technology that has been installed in stores. So far, they have seen positive results as customers have been more responsive to relevant communication.

Opportunity knocks: where Macy’s is placing its bets