Few retailers have been as aggressive as Bloomingdale’s in launching new formats for growth.
Bloomie’s, the contemporary-oriented, scaled-down version of the Bloomingdale’s department stores, opened its first door in August 2021. Bloomingdale’s marketplace launched in September 2022. Last year, the Little Brown Book clienteling program and a baby registry were introduced. And in February this year, a “partner intelligence platform” to strengthen partnerships with vendors by giving them greater information on customer shopping behavior began beta testing.
“We’re a multicategory, multibrand, multigenerational, multichannel, multiformat retailer. That’s a true advantage,” said Rachel Abeles, Bloomingdale’s senior vice president of customer and revenue growth.
Among the team of executives leading change and growth at Bloomingdale’s, which hovers around $4 billion in annual volume, Abeles has a broad range of responsibilities including real estate, the loyalty program, marketing, AI, customer strategy, data science and analytics, and the technology side of the dot.com business.
She joined Bloomingdale’s straight out of college 14 years ago as an intern, became the designer shoe buyer and spearheaded an overhaul of the 59th Street flagship’s footwear business by relocating two shoe floors into a bigger, impactful one occupying the majority of the fifth floor. “When you run a project like that, you actually see how it all comes to life for the customer. It gave me insight into the truly operational side of the business,” Abeles said.
She rose to chief of staff to the Bloomingdale’s chief executive officer, and later moved into her current position.
In the following Q&A, Abeles discusses Bloomingdale’s priorities, emerging formats, and what the future holds.
Rachel Abeles
WWD: What are Bloomingdale’s big challenges?
Rachel Abeles: We have to make sure we have the clearest picture of our customer, how they’re transacting with us, and how their perspective is changing. It’s important for us to make sure the clarity of our brand message and what we stand for are really crisp. We have to make sure our curation and our point of view are super clear. And we want to make that discovery really seamless and the path to purchase as frictionless as possible. How do we focus on things that absolutely differentiate us?
WWD: How is the Bloomie’s format performing and what’s its future?
R.A.: It’s performing really well. It’s a profitable model and a core part of how we see expanding across the country. We’re using data to inform site selection, looking at how and where our known customers and target customers are shopping, what they’re shopping online, and where our customers are underserved in markets [lacking] convenient access to highly curated fashion. We are very committed to growth and intend to see another roughly 15 of these [in addition to the four operating] in the next five years. First and foremost, we are investing in our existing fleet. There are a number of doors [receiving] outsize investment to bring the full Bloomingdale’s experience to life. But it is also true there are customers actively shopping us online without access to a physical expression of the brand. Bloomie’s is this highly curated, contemporary fashion convenience store, a neighborhood spot. And convenience doesn’t mean less. It just means the access is there, and the products are there, highly curated. Once they shop this small-format store, they shop more in our other channels.
WWD: Why did Bloomingdale’s launch the online marketplace? With its wider assortment, does it blur what Bloomingdale’s stands for?
R.A.: Marketplace is just another tool to curate our digital assortment. It’s an enabler to fully round out our existing merchandising vision by category. In some cases, it gives our team the ability to test and learn. But we hold ourselves to the same standards [of curation] on marketplace.
WWD: What new categories has marketplace brought to Bloomingdale’s.com?
R.A.: The pre-owned luxury component is on the marketplace. We have also touched upon the electronics space. Then we’ve used marketplace to expand and support the baby registry experience. Obviously that’s a sku (stock keeping unit) intensive business. But again, the marketplace is not a core extension. It’s kind of a platform to test. Whether [a product] is owned, leased, consignment, drop ship or marketplace, it’s really about the Bloomingdale’s curation and making choices about what merchandise to offer our customer. It’s less about the business model.
WWD: Digital accounts for 38 percent of Bloomingdale’s volume. Is that high for the industry? Where do you see it going?
R.A.: We are in the directional ballpark of businesses like ours. As we continue to grow the totality of our business, we see it growing in a balanced way, meaning digital will continue to stay around that contribution of the business. We’ve seen double-digit growth in digital, year-over-year.
Digital plays a critical role in the acquisition of new customers. It’s online where most customers are likely meeting our brand for the first time. Then, it’s our job, through unlocking the power of our data and the connectiveness of our experience, to drive customers to our stores, because it is where we believe that humanity, relationships, the right experiences, come to life. Talking to human beings, feeling the product — this yields higher engagement, higher lifetime value and greater frequency of visits. We believe stores are the fullest expression of our brand. So that’s how we see the channels working in concert together.
WWD: How are you improving the website?
R.A.: First, we’re using AI-driven tools for data augmentation to make sure all of the incredible products our merchants have curated are discoverable, both offsite and onsite. We’re spending a lot of time making sure we have not just the base but the augmented data enrichment for delivering a relevant experience to consumers traversing our [online] experience and that we’re discoverable in the most productive ways offsite. Second, we’re injecting more personalization across our digital experience, but also ensuring that browse and search results are relevant to consumers. We’re developing a curated “for you” section on the Bloomingdale’s app later this year, really tailored to the individual.
The more consumers start to engage with chatbots, LLMs and prompting, how they write queries changes quickly, from searching for a black dress to [requesting] suggestions on a floral dress at different price points and aesthetics. The consumer is learning how to converse with digital platforms, so we’re studying how consumer behavior is changing and will be experimenting with different generative solutions throughout the back half of the year. We’re trying to be very smart and surgical. Putting noise into the customer experience is not the answer. We are not looking to [add] more friction. We’re looking to test different ways to aid the consumer looking for help, and that’s where we will double down.
WWD: With AI and new technologies, are you limiting or increasing the messaging to consumers? They’re already being bombarded.
R.A.: That’s a very good question. It’s something we’re studying. The orchestration of messaging is critical to speaking relevantly to consumers. That means the right frequency, the right time of day, the right message through the right format. We’re experimenting to make sure we’re doing what’s right by the consumer. We will build these mechanisms [so] we don’t deliver just more, but more that’s relevant. We actually have quite incredible data — structured, architected and augmented — to do these things. It’s about making sure we’re laser-focused on the customer and relevancy.
WWD: With curation, does the website mirror what’s in stores?
R.A.: Curation happens by channel and location. There is a core assortment across channels and across stores, and then localization happens. How a brand shows up in Northern California versus Florida versus the Northeast looks different. It may be the product themselves, the color or fabrication that evolves the digital experience. We do not see [the website] as an endless aisle. It’s highly curated. We are mindful that in many cases, we may have an expansive assortment online, but it’s not expansive for expansion sake. It’s to make sure that if the productivity, traffic and demand are there, we have more optionality to expand the assortment. It’s not a hard-and-fast rule. Our merchants are using data, and honestly, taste and instinct, to determine what’s right by channel.
WWD: Why did you launch the Little Brown Book advanced clienteling tool?
R.A.: We believe our selling teams in the stores are the most powerful CRM agents. CRM is often [associated with] email, text, and push that’s automated. That’s a core part of how we’re engaging and keeping continuous conversation with the consumer, but we believe humans are that competitive advantage. So by starting to put AI into the business, we’re creating enriched customer profiles for our selling team in an intuitive, user-friendly application on their phones backed by powerful data, so they can see what their clients bought, what interests them, [even] their birthdays. It’s a real tool to better understand clients and for thoughtful outreach. You will see more AI-driven solutions using the power of our data for enriched client profiles…Based on browse behavior and purchase history, we’re using AI and data to reach out to clients on such things as a collection that just dropped or an amazing leather jacket.
