Macy’s just announced it has acquired the New York City-based Story store, a modest 2,000-square-foot store but one with a powerhouse leader and retail revolutionary in founder Rachel Shechtman. She threw the traditional retail model out the window and created something new based upon stories, not products.
The concept of Story is simple and brilliant. Every six to eight weeks, Story creates a totally new store to tell a new theme-based story filled with curated products provided by sponsors that pay the upfront fee to be showcased in its heavily trafficked Chelsea location.
Story is not just a place to buy things, but a place to experience them. It is a revolutionary idea that can create the model for what a 21st-century store should be — a place of discovery. Founded in 2011 by Shechtman — who came from the brand consulting, not the retailing, world — Story was conceived as a place that takes the “point of view of a magazine, changes like a gallery and sells things like a store.”
In founding Story, Rachel Shechtman’s goal was quite simply to “re-invent retail.” Now, with the backing of a retail giant like Macy’s, Shechtman may finally be able to realize that goal. Or will she?
In thinking about this “bold move,” colleague and fellow Forbes contributor Richard Kestenbaum called it. “Will Macy’s give Story the run room it needs to grow and bring Story-like creativity to Macy’s? Or will it crush the creativity with bureaucracy and drive Shechtman elsewhere?”.
What Macy’s has done with Bluemercury
To answer that question, we should look to another bold move Macy’s made back in 2015 when it acquired another small, entrepreneurial and revolutionary retailer, Bluemercury, along with its founders Marla and Barry Beck, for $210 million. Bluemercury is a luxury beauty retailer and spa service that was launched as an experience-based answer to traditional department stores’ old-fashioned way of selling beauty products, in departments organized by brand with sales associates selling only the brands at their counter.
That customers wanted a new way to engage with beauty products without the constraints and compromises that department stores required was shown by the rapid growth of Ulta, Sephora and Bluemercury, which at the time of the Macy’s acquisition encompassed 60 stores in 18 states, located in prime street-level locations where customers live and work and in urban lifestyle centers, rather than malls.
Will Shechtman sink or swim at Macy’s?
The essential difference in Macy’s acquisition of Story and Bluemercury is that with Story, it is primarily acquiring Rachel Shechtman’s human capital. Her store, while successful, has in no way reached the scale of Bluemercury. Nor does it operate in any way, shape or form like a traditional retailer; Bluemercury, despite its innovative approach to customer connection and cross-brand selling, is at its root a basic retail business model.
Story doesn’t stock its store buying wholesale and then selling products at retail. It uses an innovative sponsorship model, where major companies partner with Story to create story-themed retail installations, including Intel, American Express, GE, Target, Lexus, Coty and Cigna.
Shechtman said retailing “is not just about selling things, it’s about experience. Experience sells things, not the place. If you’re not actively trying to open their pocketbook and you give them an experience, you will have mind-blowing results.”
Clearly this is the kind of revolutionary thinking that a tradition-bound department store like Macy’s desperately needs. But will Macy’s ultimately be willing to embrace it and bring it to life at a pace that will satisfy a visionary like Shechtman? Rachel Shechtman has even greater potential of rocking the boat as seen by her Bluemercury history; the question is how impactful Macy’s will really let her be.
Read more on Forbes.com.
