Karyn Hoguet, the CFO of Macy’s, recently commented that her store’s trouble selling luxury goods to Gen Y customers is made tougher by the amount of money being spent on electronics instead. I argue (on RetailWire) that some of the problem is Macy’s-specific:
The “Millennial problem” is not limited to luxury goods, nor to Macy’s (which sells mostly upper moderate product anyway). It’s been reported that Gen Y and younger consumers’s discretionary purchases have been more focused on “gadgetry” than apparel. It’s not just the smartphone…it’s the data plan, the apps, the subscription to Netflix, the cost of broadband, and so forth. (Not to mention many customers’ growing interest in “experiential spending.”) So Ms. Hoguet makes a valid point without looking closely enough in the mirror.
Part of Macy’s problem drawing Millennials to its merchandise mix is that it just doesn’t try very hard, compared to its “fast fashion” competitors. Adding overlapping private brands geared to the older customer (JM Collection, Style & Co., Charter Club and so forth) exacerbates the problem. And the promotional monotony of Macy’s undermines whatever “luxury” position it is trying to grow.