Macy’s is staking its future on a new tech center in Atlanta and another in New York to reinvent the way it does business and reach new customers online.
The company recently announced plans for a $14 million technology hub at Atlanta's T3 West Midtown facility off 17th Street that would create 630 new jobs. The majority of the positions are centered on software development in an effort to boost its online sales.
Macy’s has said it’s refocusing on its online sales, just months after announcing it will close 125 of its department stores around the nation over the next three years. The closures are part of its plan to stabilize profits while fighting off low-cost rivals like T.J. Maxx and internet heavies like Amazon.
“We found that technology is going to start playing a much bigger role in our future than it has in the past,” Macy’s chief technology officer Naveen Krishna told The Atlanta Journal-Constitution. The company also plans to improve its mobile app to help customers better find products in stores.
Krishna said a tech hub in Atlanta centers Macy's among the diverse tech candidates in a city considered one of the top five up-and-coming tech meccas in the United States. Krishna said the hub also places them in a city with diverse candidates: 25% of Atlanta's tech community is black, according to Brookings.
The majority of the new positions will be centered on software development, including junior and senior-level software engineers, as well as software architects to guide technology strategy, lead design, configuration, and implementation, according to the Georgia Department of Economic Development.
Macy's joins other corporations flocking to Atlanta. In April, Global technology firm Dematic announced plans for a $30 million headquarters in Midtown and plans to hire more than 230 workers. Last year, Google broke ground on a new Midtown office.
“When you add all this up, this (decision) is on par with (other companies) that you can think of for a fraction of the cost,” Krishna said. “We’re fortunate we’re on the ground floor on this in Atlanta.”
The company did not say if they received a tax incentive for doing business in Atlanta or Georgia. A representative with the Georgia Department of Economic Development said project details are still being finalized and she could not confirm whether Macy's received a tax incentive.
Macy’s will maintain its existing Johns Creek facility on State Bridge Road where 1,500 employees focus on back-office support and infrastructure.
Aside from boosting its digital base, the company plans to expand its discount retail concept Macy’s Backstage, similar to Nordstrom’s Rack, to attract customers. There are also plans to launch a standalone boutique-style store Market at Macy’s in Atlanta.
As shopping patterns have changed, Jim Bieri, a principal with Stokas Bieri Real Estate consulting firm in Michigan, said one way a retailer like Macy's can stay in business is by focusing on the customer.
“Do I think they survive? Yes, but they have to have strong leadership and have to have people willing to bring consumers into stores for a reason.”
Macy's revamp comes as malls are struggling to stay relevant and struggle to keep tenants. In DeKalb County, the once-popular North DeKalb mall is still half-empty, and just like South DeKalb mall, it lost Macy's as an anchor.
Another struggle for Macy’s has been its branded one-day sales. “Macy’s started many years ago training the customer to look for a sale,” Bieri said. “It’s hard to get away from that.”
But Bieri said the company’s new retail concepts offer a potential solution.
“I think everybody is experimenting with smaller developments,” Bieri said. “The question becomes what products do they put in there to make it work.”
