What: Macy's new innovation strategy, led by CEO Tony Spring, is beginning to show promising results in revitalising the department store's business model.

Why it is important: As the retail sector faces intense competition from online and discount retailers, Macy's efforts to innovate are crucial for its survival and relevance. The strategy aims to transform Macy's into a modern retail entity, leveraging small-format stores and innovation incubators to drive growth and customer engagement.

Macy’s is implementing a bold innovation strategy under CEO Tony Spring to counteract declining sales and market share in the department store sector. The strategy involves segmenting its stores into "go-forward" locations for investment and closing underperforming sites. Key initiatives include expanding small-format Macy’s stores, opening new Bloomie’s and Bloomingdale’s locations, and leveraging Bluemercury's growth. A significant aspect of this plan is the "First 50" stores acting as innovation incubators to test new concepts and merchandising strategies. These stores have shown early success, outperforming other locations in sales and customer service metrics. Despite a slight revenue decline in the first half of the year, Macy's remains committed to its transformation plan, with expectations for more substantial results in the coming year. The strategy reflects a necessary shift towards radical transformation in department store retailing to meet evolving consumer expectations.

Macy’s innovation strategy shows promise amidst retail challenges