Jeff Gennette, the Macy's (M) president who is set to take over from long-time CEO Terry Lundgren next year, has more on his plate than getting ready for the holiday season and planning how much denim will be stocked in the women's department. He's also prepping to take over one of the most iconic jobs in retail amid a shift to online shopping that has disrupted Macy's and others.
Macy's put Gennette, 55, front and center with investors and analysts at Goldman Sachs' annual retail conference on Thursday. Leading a good bit of the discussion, the 33-year Macy's veteran laid out several top priorities he will focus on when officially taking over as CEO.
Macy's soon-to-be CEO Jeff Gennette
1. Work behind the scenes on re-imagining the Macy's brand.
Macy's has made several senior level hires of late, the most public being a new chief marketing officer in former Toys 'R' Us exec Richard Lennox. The new additions to the team, and pre-existing Macy's execs, are being tasked with assessing everything from Macy's marketing mix to who the actual Macy's customer is nowadays. The deeply analytical work has all the makings of Gennette announcing a splashy five-year vision for Macy's -- which could include financial goals -- sometime in 2017.
Macy's knows it must re-imagine its stores.
2. Enhance product and service exclusives.
Gennette hasn't shied away from the reality that in the age of digital buying, Macy's must reinvent its stores. That means more service-oriented shops such as Lencrafters (eyeglasses), Bluemercury (cosmetics) and Sunglass Hut (fashion eyeglasses), which provide something to consumers that isn't replicated online.
"LensCrafters is a great service, and it doesn't cannibalize anything else in our stores. So when you think about what we do with Sunglass Hut and all of a sudden you have prescription lenses on designer frames from LensCrafters -- that's a great marriage. One should expect that we continue to bring things into our building -- both owned and leased -- that will make us a more interesting destination," Gennette explained to TheStreet in an August interview.
On Thursday, Gennette peeled away the onion even more.
"We need more of them," Gennette said about whether Macy's would add food options to more of its stores to drum up traffic. He signaled an interest in "scaling" its business with coffee king Starbucks (which happens to now sell wine and beer in some locations) and didn't shoot down the notion of building restaurants in some locations. In addition, he emphasized Macy's must invest more in its affordable private label brands such as INC and Alfani that will help set it apart from competitors.
Mobile shopping likely a bigger focus under Gennette.
3. Make it easier for people to shop.
Gennette knows shopping at Macy's could be frustrating for some people. "We really know that when you think about the friction points that exist in her shopping journey -- for instance when we don't have something in stock or the price in the store is not comparable to online -- those are things that we are really obsessed with right now," Gennette told TheStreet.
Gennette has emphasized that enhancing mobile shopping is a key priority along with improving the value of its coupons.
"There are certainly some secular challenges that are new to us," Gennette told TheStreet in June. "We certainly have online players -- Amazon (AMZN) leading that list -- and others taking some market share. We also have an off-price channel that has been ferocious. You also have fast fashion that has been quite strong."