Mannequins dressed in clothes from Macy's new On 34th private label
Photo: Jeff Sward

Macy’s launched a new private brand, the “On 34th” women’s collection, as part of an extensive “reimagination” of its in-house brand portfolio that will run through 2025.

Named after its Herald Square flagship store on 34th Street in New York City, On 34th offers classics and special pieces designed for women ranging in age from 30 to 50 who want modern, versatile, and easy-to-wear looks. The range was informed by two years of consumer research, including more than “100,000 online surveys, 35 days of digital community engagement and hundreds of hours of in-store fit research and shop-alongs,” and it runs across over 750 SKUs.

“They cared about fit, quality and value and had a tremendous amount of passion around what they were putting on every single day,” said Macy’s Chief Merchandising Officer Nata Dvir at a launch event at the Manhattan flagship, according to CNBC. “And they deserved better.”

On 34th is the first of four new brands that will be introduced over the next three years. Macy’s 24 existing private label brands — including I.N.C., Charter Club, and Club Room — are undergoing refreshes and facing elimination.

Macy’s goal is to have private brands return to making up about 20% of brand sales, up from 16% last year. Private label benefits include enabling retailers to emphasize more value-priced offerings while providing differentiation and potentially boosting margins.

Macy’s private label penetration is around half as high as the levels Kohl’s and JCPenney have reached. However, Macy’s better access to designer and upcoming fashion brands compared to Kohl’s, JCPenney, and Target has also long been counted as a differentiator and traffic driver. Macy’s private label push is being led by Emily Erusha-Hilleque, a 23-year veteran of Target, which is often lauded for its in-house apparel development.

Nordstrom, which also benefits from access to better brands versus competitors, in 2021 similarly announced plans to expand its private label assortments from 10% to 20% of sales by 2025. Pete Nordstrom, president and chief brand officer, said at the time that Nordstrom sees the “significant value that Nordstrom-made brands bring to our customers by filling in gaps in our assortment while giving us more control over our merchandise selection.”

BrainTrust

“Macy’s private label strategy is customer informed and fills a gap within the current branded assortment.”

Liza Amlani

Principal and Founder, Retail Strategy Group


“If On 34th is going to succeed, it needs the brands surrounding it to be edited back (or eliminated) in order to get the square footage and marketing push it deserves.”

Dick Seesel

Principal, Retailing In Focus LLC


“I don’t see Macy’s as a “curator” of premium national and up-and-coming brands. I see it as a sales outlet for whatever those brands will allow them to sell.”

Paula Rosenblum

Co-founder, RSR Research

Discussion Questions

DISCUSSION QUESTIONS: How important is building a strong private label portfolio to Macy’s success? Does emphasizing private labels risk diluting its position as a curator of premium national and up-and-coming brands?

Poll

Macy’s goal is to increase private labels from 16% to approximately 20% of branded sales. Where should the goal be?

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18 responses to “Have Private Labels Like On 34th Become More Important for Macy’s?”

  1. Gene Detroyer Avatar
    Gene Detroyer

    The range was informed by two years of consumer research, including more than “100,000 online surveys, 35 days of digital community engagement and hundreds of hours of in-store fit research and shop-alongs.”

    I certainly am not an expert on women’s apparel, but based on what I heard from “older” women, I applaud Macy’s for their research. Overhearing conversations regarding women’s apparel, I constantly hear complaints about design/fit and “old” fashion.

    If 50 is the new 40 and 60 is the new 50, Macy’s should have a big win.

  2. Dick Seesel Avatar
    Dick Seesel

    INC, Club Room and Charter Club do not have a clear brand identity — especially the last two, which overlap in their appeal to more traditional, moderate-priced shoppers. Macy’s has been guilty of operating its brands in silos, instead of taking a more holistic approach, at least in my eyes.

    If On 34th is going to succeed, it needs to be managed as more than a gross margin play. It needs the brands surrounding it to be edited back (or eliminated entirely) in order to get the square footage and marketing push it deserves. More broadly, Macy’s needs to avoid chasing Target-style private brand penetration…how did that work out for Bed Bath & Beyond?

    1. Paula Rosenblum Avatar
      Paula Rosenblum

      Another day when I’d like to click on the “like button”

      1. Georganne Bender Avatar
        Georganne Bender

        Me, too!

      2. William Passodelis Avatar
        William Passodelis

        I as well !

  3. Allison McCabe Avatar
    Allison McCabe

    Well designed and managed private label brands should be perceived as exclusive to a retailer vs. just “the house brand” which is often viewed as a promotional play. This adds to the curator position. An increase to 20% penetration is a strong growth goal. If that can be achieved, there may be room for more but it is important Macy’s keep to their deliberate plan.

  4. Gary Sankary Avatar
    Gary Sankary

    A strong private label program so important for apparel relaxers like Macy’s. It builds loyalty, it gives the company more flexibility for product stories and assortments, and it drives margin. Macy’s brand has strength in the market, especially for the segments mentioned in the article. At the same time Macy’s brand partners are diversifying their distribution channels, they’re strengthening their DTC businesses, expanding their presence in outlets and off-price, and generally making it easier for their loyal customers to buy their products directly, by-passing stores like Macy’s and Nordstrom. I think this strategy is right for Macy’s, and I would encourage them to double down on even more private label product.

  5. Liza Amlani Avatar
    Liza Amlani

    Macy’s private label strategy is customer informed and fills a gap within the current branded assortment. However, solving a small part of the Macy’s mess is not going to get the retailer out of the woods.

    But Macy’s must clean up their entire assortment selection and improve their in-store experience. Otherwise this is just another grasp at straws for the retailer to attempt to remain relevant.

    There is also am inconsistency across stores – from visual merchandising standards to signage to levels of customer service.

    Department stores need to improve their entire end to end in order to survive today’s retail landscape. Customers have more choices than ever and are constantly evolving. Retailers need to do the same and keeping up with the customer means meeting them where and how they want to shop. Service standards and merchandising strategies are only part of the equation. There is a lot more work to do.

    Especially for Macy’s.

  6. Neil Saunders Avatar
    Neil Saunders

    Private labels are essential, for two reasons. One, they provide differentiation and give retailers a competitive edge. Two, if executed well they can enhance margins. All that said, private labels have to be crafted properly and this is where Macy’s has fallen down in the past. Too many of its labels are disjointed, badly displayed in store, and just merge into a general ‘sea of merchandise’. There is hope, however. I went to see On 34th in store last weekend and execution was much better and the collection was reasonably well put together with a nice selection of products. Whether it is a success longer term relies on Macy’s continuing to treat the label well and not allowing it to slip into its traditional black hole of poor standards.

  7. Paula Rosenblum Avatar
    Paula Rosenblum

    This is very confusing to me. Macy’s was a leader in private label for quite some time. Inc and Style & Co had become brands on their own, and they also had exclusive offerings from other vendors (which by rights, is as close to private label as you can get).

    So my first question is: what happened? When did that fall apart?: Why are the 24 (TWENTY-FOUR!!!) current private labels being retired? Has the brand equity gone that far downhill?

    Private label is always important for retailers, especially department stores. It’s free margin points, for one thing, or, the retailer can choose to just lower the prices and keep margin constant for cost-conscious consumers. (FWIW, I don’t see Kohls and JCP as chains Macy’s should emulate).

    I don’t see Macy’s as a “curator” or premium national and up-and-coming brands. I see it as a sales outlet for whatever those brands will allow them to sell. The brands are obviously important, as they will help drive traffic into stores and onto web sites, but the brand/retailer relationship continues to grow more complex with a lot of co-opitition going on. The brands will sell DTC, the retailer will sell private label. and the dance goes on.

    I guess the overarching question is “What does Macy’s want to stand for?” I’m not sure I understand anymore.

  8. Georganne Bender Avatar
    Georganne Bender

    Macy’s zeroing in on specific consumers is a start. I am a Macy’s customer and it is not always easy to find clothing I like and that fits. I am not alone; my company has held many focus groups with female consumers who want better clothing choices. The fashion industry’s lack of attention to 50+ women is something I continue to be vocal about.

    Two things: I have seen photos of the On 34th assortment and it doesn’t look that much different from Macy’s other private label offerings. I am also confused as to why On 34th targets women aged 30 to 50. That’s a big range, and one where taste and fit can differ dramatically.

    It’s the 50+ woman who has the most trouble finding clothing she wants to be seen in. This customer also has deep pockets. Where is the focus for her?

    1. Scott Norris Avatar
      Scott Norris

      Other regions can chime in, but Dayton’s never had a problem in creating well-regarded assortments for different age ranges and income brackets, with a mix of designer and private-label (still valuable finds at garage sales, thrift shops, and antique stores). All this local-brand knowhow got tossed out during the consolidations and now (only now??) they realize they weren’t paying attention to their customers’ needs – and the people who had that knowledge are out of retail, long retired, or gone. It’s the endless cycle of value creation and destruction, but at least there will be new retailers and designers to look forward to!

      1. Georganne Bender Avatar
        Georganne Bender

        Fingers crossed those new retailers and designers understand customers who are not like them!

  9. Jeff Sward Avatar
    Jeff Sward

    I was skeptical after my initial visit to the website. And then graduated to enthusiastic after visiting a Macy’s suburban branch store. I’m now even more buoyed after reading about the research involved. Data + Design! It’s not just number crunching and it’s not pure creativity. It’s about active listening and learning. And how that then fits into a highly competitive market. Now with the launch, a whole new level of active listening and learning kicks in.

  10. Ryan Mathews Avatar
    Ryan Mathews

    My first rule of business is, “Start by stop doing the stupid s@#t.” Macy’s shouldn’t have 24 private label – and why are we still calling these items private label -lines. They need to organize – and thin – their existing own-brand portfolio before they try to introduce four more brands. Managing the old inventories down while integrating the new inventories in would be a challenge for an organization with great store level control. Right now, I don’t see any brand strategy that speaks clearly and distinctly to the consumer.

  11. Craig Sundstrom Avatar
    Craig Sundstrom

    As anyone who’s ever read RW knows, house brands are an excellent way to
    – differentiate yourself
    – control quality
    – maintain margins
    Of course in order to do this, you have to offer quality merchandise that people actually want to buy (forcing people to buy it by dropping well known brands is a dubious idea). How well regarded macy*s brands are I don’t really know ; I recall during the (height of the) Marshall Field’s conversion brouhaha there was a lot of ridiculing of the efforts (Alfani = Al-Phony), but of course that wasn’t exactly an objective take. In the example today, my first impression is that there’s (still?) a little bit of cluelessness: how many macy*s shoppers outside of NYC would know what “on 34th” means??

  12. Allison McGuire Avatar
    Allison McGuire

    I’ve found recently that when I visit different department stores they all carry the same labels. There isn’t a lot of uniqueness to them. So private label may be a good approach as long as you have good designers that appeal to your existing customer base. Seems like Macy’s did their research and is confident, but yet they put an end date on the portfolio. That doesn’t sound like a resounding show of support.

  13. Ben Reich Avatar
    Ben Reich

    Over the past few years, we’ve seen a surge of new private labels. The rise in private label brands has changed the marketplace dynamics in many categories – they are no longer seen as budget brands; in fact many retailers find private labels to be more profitable. For Macy’s to be most successful in their private label strategy, they need to track assortment dynamics in a much more granular way – real-time, shareable assortment data is the way to determine the right mix of branded vs. private label products at the store level.

18 Comments
oldest
newest
Gene Detroyer
Gene Detroyer
15 days ago

The range was informed by two years of consumer research, including more than “100,000 online surveys, 35 days of digital community engagement and hundreds of hours of in-store fit research and shop-alongs.”

I certainly am not an expert on women’s apparel, but based on what I heard from “older” women, I applaud Macy’s for their research. Overhearing conversations regarding women’s apparel, I constantly hear complaints about design/fit and “old” fashion.

If 50 is the new 40 and 60 is the new 50, Macy’s should have a big win.

Dick Seesel
Dick Seesel
15 days ago

INC, Club Room and Charter Club do not have a clear brand identity — especially the last two, which overlap in their appeal to more traditional, moderate-priced shoppers. Macy’s has been guilty of operating its brands in silos, instead of taking a more holistic approach, at least in my eyes.

If On 34th is going to succeed, it needs to be managed as more than a gross margin play. It needs the brands surrounding it to be edited back (or eliminated entirely) in order to get the square footage and marketing push it deserves. More broadly, Macy’s needs to avoid chasing Target-style private brand penetration…how did that work out for Bed Bath & Beyond?

Paula Rosenblum
Paula Rosenblum
  Dick Seesel
15 days ago

Another day when I’d like to click on the “like button”

Georganne Bender
Georganne Bender
  Paula Rosenblum
15 days ago

Me, too!

William Passodelis
William Passodelis
  Georganne Bender
6 days ago

I as well !

Allison McCabe
Allison McCabe
15 days ago

Well designed and managed private label brands should be perceived as exclusive to a retailer vs. just “the house brand” which is often viewed as a promotional play. This adds to the curator position. An increase to 20% penetration is a strong growth goal. If that can be achieved, there may be room for more but it is important Macy’s keep to their deliberate plan.

Gary Sankary
Gary Sankary
15 days ago

A strong private label program so important for apparel relaxers like Macy’s. It builds loyalty, it gives the company more flexibility for product stories and assortments, and it drives margin. Macy’s brand has strength in the market, especially for the segments mentioned in the article. At the same time Macy’s brand partners are diversifying their distribution channels, they’re strengthening their DTC businesses, expanding their presence in outlets and off-price, and generally making it easier for their loyal customers to buy their products directly, by-passing stores like Macy’s and Nordstrom. I think this strategy is right for Macy’s, and I would encourage them to double down on even more private label product.

Liza Amlani
Liza Amlani
15 days ago

Macy’s private label strategy is customer informed and fills a gap within the current branded assortment. However, solving a small part of the Macy’s mess is not going to get the retailer out of the woods.

But Macy’s must clean up their entire assortment selection and improve their in-store experience. Otherwise this is just another grasp at straws for the retailer to attempt to remain relevant.

There is also am inconsistency across stores – from visual merchandising standards to signage to levels of customer service.

Department stores need to improve their entire end to end in order to survive today’s retail landscape. Customers have more choices than ever and are constantly evolving. Retailers need to do the same and keeping up with the customer means meeting them where and how they want to shop. Service standards and merchandising strategies are only part of the equation. There is a lot more work to do.

Especially for Macy’s.

Neil Saunders
Neil Saunders
15 days ago

Private labels are essential, for two reasons. One, they provide differentiation and give retailers a competitive edge. Two, if executed well they can enhance margins. All that said, private labels have to be crafted properly and this is where Macy’s has fallen down in the past. Too many of its labels are disjointed, badly displayed in store, and just merge into a general ‘sea of merchandise’. There is hope, however. I went to see On 34th in store last weekend and execution was much better and the collection was reasonably well put together with a nice selection of products. Whether it is a success longer term relies on Macy’s continuing to treat the label well and not allowing it to slip into its traditional black hole of poor standards.

Paula Rosenblum
Paula Rosenblum
15 days ago

This is very confusing to me. Macy’s was a leader in private label for quite some time. Inc and Style & Co had become brands on their own, and they also had exclusive offerings from other vendors (which by rights, is as close to private label as you can get).

So my first question is: what happened? When did that fall apart?: Why are the 24 (TWENTY-FOUR!!!) current private labels being retired? Has the brand equity gone that far downhill?

Private label is always important for retailers, especially department stores. It’s free margin points, for one thing, or, the retailer can choose to just lower the prices and keep margin constant for cost-conscious consumers. (FWIW, I don’t see Kohls and JCP as chains Macy’s should emulate).

I don’t see Macy’s as a “curator” or premium national and up-and-coming brands. I see it as a sales outlet for whatever those brands will allow them to sell. The brands are obviously important, as they will help drive traffic into stores and onto web sites, but the brand/retailer relationship continues to grow more complex with a lot of co-opitition going on. The brands will sell DTC, the retailer will sell private label. and the dance goes on.

I guess the overarching question is “What does Macy’s want to stand for?” I’m not sure I understand anymore.

Georganne Bender
Georganne Bender
15 days ago

Macy’s zeroing in on specific consumers is a start. I am a Macy’s customer and it is not always easy to find clothing I like and that fits. I am not alone; my company has held many focus groups with female consumers who want better clothing choices. The fashion industry’s lack of attention to 50+ women is something I continue to be vocal about.

Two things: I have seen photos of the On 34th assortment and it doesn’t look that much different from Macy’s other private label offerings. I am also confused as to why On 34th targets women aged 30 to 50. That’s a big range, and one where taste and fit can differ dramatically.

It’s the 50+ woman who has the most trouble finding clothing she wants to be seen in. This customer also has deep pockets. Where is the focus for her?

Scott Norris
Scott Norris
  Georganne Bender
15 days ago

Other regions can chime in, but Dayton’s never had a problem in creating well-regarded assortments for different age ranges and income brackets, with a mix of designer and private-label (still valuable finds at garage sales, thrift shops, and antique stores). All this local-brand knowhow got tossed out during the consolidations and now (only now??) they realize they weren’t paying attention to their customers’ needs – and the people who had that knowledge are out of retail, long retired, or gone. It’s the endless cycle of value creation and destruction, but at least there will be new retailers and designers to look forward to!

Georganne Bender
Georganne Bender
  Scott Norris
15 days ago

Fingers crossed those new retailers and designers understand customers who are not like them!

Jeff Sward
Jeff Sward
15 days ago

I was skeptical after my initial visit to the website. And then graduated to enthusiastic after visiting a Macy’s suburban branch store. I’m now even more buoyed after reading about the research involved. Data + Design! It’s not just number crunching and it’s not pure creativity. It’s about active listening and learning. And how that then fits into a highly competitive market. Now with the launch, a whole new level of active listening and learning kicks in.

Ryan Mathews
Ryan Mathews
15 days ago

My first rule of business is, “Start by stop doing the stupid s@#t.” Macy’s shouldn’t have 24 private label – and why are we still calling these items private label -lines. They need to organize – and thin – their existing own-brand portfolio before they try to introduce four more brands. Managing the old inventories down while integrating the new inventories in would be a challenge for an organization with great store level control. Right now, I don’t see any brand strategy that speaks clearly and distinctly to the consumer.

Craig Sundstrom
Craig Sundstrom
15 days ago

As anyone who’s ever read RW knows, house brands are an excellent way to
– differentiate yourself
– control quality
– maintain margins
Of course in order to do this, you have to offer quality merchandise that people actually want to buy (forcing people to buy it by dropping well known brands is a dubious idea). How well regarded macy*s brands are I don’t really know ; I recall during the (height of the) Marshall Field’s conversion brouhaha there was a lot of ridiculing of the efforts (Alfani = Al-Phony), but of course that wasn’t exactly an objective take. In the example today, my first impression is that there’s (still?) a little bit of cluelessness: how many macy*s shoppers outside of NYC would know what “on 34th” means??

Allison McGuire
Allison McGuire
14 days ago

I’ve found recently that when I visit different department stores they all carry the same labels. There isn’t a lot of uniqueness to them. So private label may be a good approach as long as you have good designers that appeal to your existing customer base. Seems like Macy’s did their research and is confident, but yet they put an end date on the portfolio. That doesn’t sound like a resounding show of support.

Ben Reich
Ben Reich
13 days ago

Over the past few years, we’ve seen a surge of new private labels. The rise in private label brands has changed the marketplace dynamics in many categories – they are no longer seen as budget brands; in fact many retailers find private labels to be more profitable. For Macy’s to be most successful in their private label strategy, they need to track assortment dynamics in a much more granular way – real-time, shareable assortment data is the way to determine the right mix of branded vs. private label products at the store level.