Ask Frank Guzzetta
Guzzetta departed his job as CEO of the Macy’s North division on February 29, as the Cincinnati-based retailer restructured itself nationally and cut more than 900 jobs locally. Minneapolis lost an ardent booster of downtown life and downtown retail in the process.
What’s ahead for Macy’s and for the department store model on the whole? And where should Minneapolis be looking for downtown-retail models to follow? Here’s how Guzzetta answers readers’ questions.
Q: What does the department store of the future look like?
- Blois R. Olson, Tunheim Partners
A: First, let me confirm that I believe there is a future for the department store. I think the direction is toward trading up and making assortments more relevant to consumers by geographic area.
The future store will have more lifestyle vendor shops with coordinated merchandise because this is how the customer likes to shop. In some ways, it will be a group of small specialty stores under one roof. Space will be re-allocated more quickly as trends or ideas emerge.
Q: Department stores have become commodities—they all look alike to the consumer, and it's all about getting a deal rather than an experience, never mind a meaningful experience. They've lost their brands. How are retailers addressing consumer desires for connection, meaning, and experience through their purchasing decisions?
- Christine Nelson, Ingenuity Marketing Group, LLC
A: There is a major effort to differentiate and find new brands that are relevant and fresh—e.g., Martha Stewart, [Ralph Lauren’s] American Living at J. C. Penney, Vera Wang at Kohl’s, and scores more across department stores in general. At Macy’s, there is a major effort to find new brands in the market and bring them to life in the stores. There is a major focus on channeling dollars to in-store service and improving the environment visually. We recognize this challenge and need and are allocating dollars and manpower. We will only survive if we can accomplish it.
Q: Who exactly is the department store targeting these days? The downscaling of inventory at Macy’s in the past few years indicates that the desired customer is a middle-income consumer at best. The serious decline in quality service indicates the same. The message has been fairly clear to upscale consumers: "Go elsewhere."
- Gary Johnson, MSP Communications
A: You are partially correct. In general, Macy’s is more focused on a broader-spectrum moderate customer. The upper-end customer is better served by Bloomingdale’s or some of the other better department stores.
The number of customers looking for the upper-tier price lines was not large enough to support the space they needed to do business, and we found we were better able to service the needs of more people with a different mix.
I respect the difference and want to be the best at the tier below best. This value- or affordable-luxury segment is a large and growing segment.
Q: How has being an openly gay man helped or hindered your work at Macy’s and in the community?
- Scott Mayer, Mayer
A: Being openly gay has not been an issue one way or the other. I found Minneapolis to be a very positive environment for a gay man to work and to socialize in. I always felt invited into every situation for my potential ideas and contributions, not my sexual orientation.
Q: What are quick, attainable, and financially viable changes that you would suggest we make to our current downtown landscape that would cause small yet welcome improvements to downtown retail traffic? Is there a city you would recommend we model ourselves after?
- Alexis Walsko, Lola Red PR
A: We quickly need to get the streetscape cleaned up and make the streets look and feel safe. One uniform look, like Michigan Avenue in Chicago, would carry us a long way.
We need to work quickly on getting more new retail downtown on the street on both Nicollet and Hennepin to get us to a tipping point. We can't continue the stop-start and the scattered pattern that is going on.
Washington, D.C., is also a good example of a city that hit the tipping point several years back and just kept going.
Q: How do you think the skyway system contributed to our downtown Minneapolis retail challenges?
- Alexis Walsko
A: The skyways are great connectors, but they do not create an environment for good shopping. The patterns work to get people from one location to another, but don't work like a downtown shopping street.
I have concluded after observing them for several years that the key retailers from the skyways would be better on a shopping street laid out more like a mall or an original downtown. Look again at Michigan Avenue in Chicago. All the stores along the avenue do better than the stores inside the vertical malls, which are somewhat like skyways. It’s just a human behavior thing, as I see it. The skyways do have a good purpose, they just don't function well for shopping.
Watch for our next Q&A, with Minnesota Twins President Dave St. Peter, in early April.
Would you have interest in sharing some of your thoughts and insights as a guest speaker at the International Council of Shopping Centers (ICSC) & Minnesota Shopping Center Assn's (MSCA) Real Estate Forum set for Tuesday September 9th?
Posted by: Rollin Hunsicker | March 25, 2008 at 12:01 PM