Macy’s jumps onto the off-price bandwagon

Macy’s announced in early 2015 that it was developing an off-price concept, and it provided more details about the concept this month. (And in another RetailWire discussion this month, panelists discussed the phenomenon that department store “sale” prices are often lower than outlet store prices anyway.) Here’s my skeptical point of view:

It’s not simply a question of how Macy’s Backstage differentiates itself from a space crowded with competitors like Nordstrom Rack, TJX and Ross Stores. Rack in particular has the brand cachet that Macy’s and the others can’t touch, especially in markets where Nordstrom is very deliberate about placing its full-line stores.

More importantly, how does the off-price concept differ from Macy’s full-line stores, with their constant barrage of sales and coupons? How is the merchandise content going to differ from what customers can find on the clearance rack at their local mall? Will Macy’s develop product specifically for Backstage? (Tough to do initially for only four stores…)

Plenty of questions needing answers before Macy’s ends up cannibalizing its core business. I still believe a “Bloomingdale’s Rack” type of concept might be more viable.


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