Macy’s trip from the frying pan of slow holiday sales to the fire of the new year’s earnings calls has not been smooth. The continued revelations of just how hard hit the retailer truly is keep coming, but that hasn’t stopped Macy’s from trying out some radical concepts — the type that might just be crazy enough to get it out of the mess it’s in.
A Macy’s spokesperson told CNNMoney that a new coupon and discount policy will be at the forefront of the retailer’s big push toward massively discounted goods, highlighted by its growing Backstage brand. Instead of a confusing mix of pre-applied markdowns and consumer-supplied vouchers that may give uneven prices to different shoppers, the retailer will no longer be accepting any coupons on clearance items. Non-discounted items will still be eligible to be used with coupons.
“Before, there was a lot of math,” a Macy’s spokesperson told CNNMoney. “Now, pricing is simple and clear.”
From the retailer’s perspective, the decision was nothing more than a helpful olive branch to consumers frustrated with messy coupon books. However, the decision was made purely out of concern for price transparency, Macy’s will also redesign its stores to group all clearance items together into one men’s and one women’s section. In that light, it seems like Macy’s is trying to remove any and all obstacles between consumers and their places in the checkout line. Indeed, The Washington Post reported that when Macy’s tried this plan out in some pilot stores, it moved inventory at a much faster rate than normal, though the retailer conspicuously didn’t mention profits.
But the question remains: Does Macy’s near-360-degree turn away from discounts indicate confidence or confusion?
Answering that question with any degree of certainty requires looking into the future, but looking into the past might give just as many clues. Retail Dive explained that JCPenney experienced a similar discounting dilemma under former CEO Ron Johnson. Johnson came to the retailer in 2011 and immediately did away with its Macy’s-esque fragmented discount program. His “fair-and-square” pricing strategy adopted across-the-board prices on a majority of items, and it also limited themed promotional sales to 12 a year, quite the dropoff from the 590 JCPenney ran the year before.
And what happened to Johnson’s bold retail experiment? It was a disaster. Retail Dive noted that the brand’s older clientele didn’t bother to keep up with the changes and head for less complicated pastures, and new ones didn’t come in to replace them. Johnson left JCPenney in 2013, and while few investors weren’t exactly sad to see him go, Robin Lewis, founder of The Robin Report consultancy firm, explained that the industry’s opinions have shifted in the intervening years.
“[Johnson] absolutely had the right vision; there’s no question in my mind. And, to this day, there’s no question in my mind,” Lewis told Retail Dive. “He just screwed up the execution, that’s all. Quite frankly, it has to be the future of the department stores, and you will see those who succeed evolve to that model.”
It has to be killing executives at Macy’s, but the ball is solidly in the consumers’ court when it comes to their long-awaited retail revival. As Lewis explained, no one knows when “the future of department stores” will actually come to fruition, and with precious time and altitude left before it crash lands, what other choice does Macy’s have besides pulling the rip cord on a new age of discounts and hoping that there’s enough wind in its sails to catch it before it falls?