GREENSBORO, N.C. -- Many malls and department stores that were once a go-to for shoppers are now struggling to woo them back.
Consumer trends show shoppers have moved to filling their carts online and at discount stores.
Department stores like Macy’s have come up with a new cost-conscious concept called ‘Macy’s Backstage’. It’s a store within a store, selling outlet-style and designer brands at marked down prices.
A new ‘Backstage’ opened at the Friendly Center in Greensboro on Friday and they're popping up at other locations across the country.
Macy’s store manager at the Friendly Center, Richard Habib, said, "We are doing this because it gives another avenue to increase our sales. Off-price retailing is giving e-commerce a push for its money and so we're really excited about that. The value and assortment in there is different than our regular branded store.”
Habib says it's a chance for consumers to have a broader experience.
"It allows the customer to come in and shop value price merchandise thats anywhere from 20 to 80 percent off current retail,” said Habib.
A professor at the Bryan School of Business & Economics, Jiyoung Hwang, says online shopping is a part of the compeition.
"Their struggles are mostly due to consumer trends. One is consumers’ moving toward online shopping, particulary Amazon. The other is consumer’s preference to value in their shopping. By value, it is not always about money; it’s based on cost-benefit analysis (i.e., the shopping value consumers percieve- what they pay for)," said Hwang.
While department stores aren’t doing so well, discount and dollar stores are thriving.
Hwang said, “Dollar General opened about 1,300 stores in 2017, and planning to open another 900 stores in 2018. Dollar Tree opened about 650 new stores in 2017. They are doing pretty good because they are fulfilling consumers’ needs and ‘values’ through low price. This explains the growth of off-price retailers such as T.J. Maxx and Nordstorm Rack.”
Many department store shoppers have strayed, finding they can get the same designers with a lower price tag at some discount stores.
T.J. Maxx shopper Mara Burchell said, "They have the same kind of name brands here with cheaper prices, so, I mean, I feel like I come here more often because I can afford it here versus Macy's or places like that."
With concepts like ‘Macy’s Backstage’, department stores are hoping to snag those shoppers back with irresistible deals.
Since 2015, Macy’s has closed more than 120 stores and cut more than 5,000 jobs.
Hwang says with the savings from those actions, they are investing in new business decisions including ‘Backstage’ and remodeling.