Macy’s, a company that has been under sales and investor pressures over the past few years, has named a new chief merchandising officer. Her name is Patti Ongman, and she succeeds Jeff Kantor, effective March 1.
Ongman, who is 62, according to Reuters, has been with Macy’s for 33 years. In her most recent position, she was EVP, General Merchandise Manager for Home.
Ongman finds herself with a really big job, running merchandising for a really big company that is clearly in transition. While Macy’s is seeking to engage a younger customer, as evidenced by its acquisitions of Story and investment in B8ta, the realities of running such an enormous merchandising group seem to require experience über alles. One of Ongman’s tasks is to re-invigorate Macy’s private-label products. This will take a keen ability to hire and encourage fresh designers while working with sources to keep prices reasonable. Experience is important here.
While some might say that Macy’s merchandising problem has existed since Jeff Gennette took over from Terry Lundgren as CEO in 2017, my own experience is that the problem has been brewing for far longer than that. Aspects of this problem are idiosyncratic to Macy’s while other aspects are endemic to the department store industry in general.
As always, I tend to put myself in the consumer’s shoes. I used to shop at Macy’s, in their plus-size section. The price points were right, and I liked some of the designers, along with some private-label products. But as the company tried to shift to a younger customer, I found its offerings less appealing to me. I’d brave the traffic and bustle of Aventura Mall, only to find clothes that had nothing to do with me, or who I am. Lots of rhinestones, and styling that, I guess, would work for a very young customer. And the company has been chronically over-inventoried, making it really hard to ferret through the “stuff” to get to something I might actually want.
Across the entire store, promotional merchandise is mixed in with regular-priced product. So I might find one rack at 33% off while the rack right next to it was selling at full price. I understand this is a strategy that probably worked for a long time. But I don’t believe it works well for today’s shopper. Either I’m shopping for bargains, or I’m not. Let me choose. It feels vaguely like a trick, and sometimes I don’t catch it until I’m at the checkout stand. In other words, it is dated thinking that will not appeal to the younger customer. I’m not sure it appeals to anyone anymore. People just don’t have the time or the energy to play “catch the retailer using sleight of hand.”
True “clearance” items are separated, and the crowded racks make them really hard to ferret through, but when you’re shopping clearance, you kind of accept that as a reality.
At RSR, we have bemoaned the fact that despite all the talk of Millennials and now Generation Z, most retailers seem to a) have their merchandising groups run by Gen X and above, and b) claim their core customer is also Generation X. It’s time to change. All you have to do is look at burgeoning home furnishing sales (Walmart just launched its own private label—furniture is on) to see that Millennials are starting to buy “things” along with experiences. I don’t want to be ageist, and in fact, I’m not. If someone treated me based on my age, I’d probably whack them. But there is a fundamental need for change and this is where the systemic part of the problem comes in.
People do not want to shop by department. They don’t want to wander from one part of the store to another looking for a black blouse or a pair of jeans because multiple vendors sell those same items and that’s how the store is laid out. Shoppers want relevancy.
Shoppers don’t much care if the chief merchant is 30 or 70. They do care about their time. So along with bringing private label along, Ongman is going to have the chore of improving store layouts while honoring vendor contracts. Perhaps more private label will help her in that cause, but brands are also traffic drivers, so she can’t abandon them either.
I wish Ongman the best of luck in her new position. This will be a career-topping challenge, for sure, and a success would leave a great legacy. And it would also provide great lessons for other retailers. I’ll be watching closely.
Date: February 21, 2019