Dying Is Easy. Retail Is Hard. (Update)

15:28Jeff Kinney:It's not the sexiest industry. It is arguably the largest. Retailing is 70 to 80 percent of the world's economy. There's been an enormous resurgence in interest in retailing, largely on the side of entrepreneurship. I would also point out that some of the world's largest individual fortunes have been made coming out of retail. Obviously, the Walton family. Then there's the ubiquitous Jeff Bezos experience at Amazon.

15:59Mark Cohen:Zara is a big one. Inditex, right? You bet. LVMH, a different kind of retail, I guess, but still retail. That's right. So some retailers are obviously thriving. And I've seen data suggesting that the e-commerce apocalypse just hasn't happened. that good brick and mortar has a future. But let's take a case study of failure. Let's talk about Sears. They were massive, and now they're pretty much dead. You were a senior executive at Sears before its demise. I assume it wasn't your fault, but...

16:31Jeff Kinney:No, it wasn't my fault. The underlying issue in retailing is the customer has never disappeared. The customer has never gone away. The customer worldwide is hard-coded to want to shop for things, the only self-limiting issues being their economic capability and their proximity to a marketplace. At the turn of the 20th century, customers in the United States were able to shop by coming downtown to shop in an emerging department store emporium. They also began to be able to shop in the early 20th century through catalogs like Sears Robux. If you couldn't find it in a Sears catalog, you didn't need it.

17:15Jeff Kinney:You could buy everything from apparel to a you-build-it house. And they built out the facility with which to fulfill customer demand, literally throughout the United States. In the aftermath of World War II, millions of servicemen began to return from overseas and were eager on catching up on their lives and forming households. They began to migrate from urban centers and rural communities into newly formed suburbs. Dwight Eisenhower, the U.S. president in the 50s, has a lot to do with the emergence of mid-20th century retail. when he caused the interstate highway system to be built, having come out of World War II and witnessing the efficacy of the German Autobahn, his rationale was we have to have a way to move men and material north, south, east, and west efficiently as opposed to across Tulane Blacktop, which is what connected the United States at that time.

18:19Jeff Kinney:Of course, we were never invaded. There was no reason for the interstate highway system to be an adjunct of the Defense Department, what it did was it spawned an enormous amount of migration into newly formed suburbs, which were being built in close proximity to these interstate highways. So there was this emergence of suburban-based mall retailing, which hollowed out traditional downtown-based retailing in hundreds of U.S. cities.

18:50Mark Cohen:Sears was one of those department stores is it migrated to the suburban malls?

18:54Jeff Kinney:And they became the largest retailer in the world through the 1960s. So what happened to Sears? Success in many cases brings complacency, hubris. Success seeds failure in many enterprises as they become larger and larger and become convinced that they are the last word. It was a very insular, inwardly facing business. In fact, when the two founders of Home Depot came to visit Sears Roebuck some years ago, looking to get some financial support to launch their business, they basically got laughed out of the meeting by senior executives at Sears who looked at them as upstarts who had nothing to offer.

19:43Mark Cohen:Okay, that's Mark Cohen on the rise and fall of Sears. How about Macy's at its peak?

19:50Jeff Kinney:Macy's was a brilliantly constructed general merchandise emporium servicing customers from low middle income all the way up into near luxury. They were very good looking stores that were very powerfully merchandised, topical and current, and they did it very consistently.

20:11Mark Cohen:When you say it was powerfully merchandised, I've read you right before about what makes a good store good and a bad store bad. What are some things that Macy's did when they were very good?

20:21Jeff Kinney:One of the most important things they did was they created a overlarge business consisting of housewares products by creating on the lower level of their Herald Square store something they called the seller. Good use of underground real estate too. Yes. So they took a whole variety of categories that were not up until that point viewed as particularly sexy or fashionable. They gave them a home, amped up their presentation and built a business that customers would previously have seen as a place to buy utility products. You know, we need another frying pan to a place to buy an entire suite of cookware.

21:03Jeff Kinney:And they did it brilliantly. It was putting the puzzle pieces together in a way that hadn't been done before. Which decades were the strongest decades for Macy's? Probably the 60s and 70s.

21:15Mark Cohen:How profitable was Macy's in its heyday?

21:18Jeff Kinney:It was very profitable. I don't have a specific number to say, but they were viewed as good as it gets.

21:24Mark Cohen:How fashionable were the clothes at Macy's during its heyday?

21:28Jeff Kinney:Very fashionable. They were purveyors of the best brands of the day. And Macy's also invested in a whole portfolio of private label brands in both apparel and accessories and in home.

21:41Mark Cohen:So you're telling us all these things that Macy's did, basically what Macy's stood for for these several decades. When you look at Macy's today, what does it stand for?

21:52Jeff Kinney:Well, unfortunately, and in my view, Macy's doesn't stand for anything today. A consumer-facing enterprise, a brand, a store, a website has to stand for something. It has to have a point of view that not only is recognized by customers as something they want to associate with, but differentiates itself from competition and is able to defend itself from competition.

22:17Mark Cohen:So what'd they do wrong in these last several decades?

22:19Jeff Kinney:Well, Macy's began to prop up their lagging productivity and they began to play the last man standing game. You know, buy your competition and decide that's the secret to life because now you don't have to compete with someone head to head. They also consolidated all of their regional banners under the heading Macy's. They did this in an attempt to retain their relevance, which was under tremendous pressure because of all of these specialty store chains. And then the big box off mall retailers started to do an enormous amount of volume. And then, of course, there's Jeff Bezos' Amazon. on.

23:03Mark Cohen:I'm curious, as Macy's business and reputation foundered for all these decades, what kind of brands would no longer sell to them because they don't want their stuff in a Macy's?

23:14Jeff Kinney:Well, Macy's has historically abused their vendor community. And I've used that word, and some former CEOs at Federated Macy's have objected to it, but they can't object very loudly because they know damn well that I'm telling the truth. They have been historically tremendously one-sided in their behavior. Many brands grudgingly supported their merchandise being sold at Macy's because they did not have an alternative. They now have alternatives.

23:45Mark Cohen:What specifically did Macy's do to their vendors that you're calling abusive? Paying late, not marketing well? What was it?

23:52Jeff Kinney:They would be pounded for best price up front, and then there would be demands made for advertising and presentation allowances, demands made for gross margin guarantees, markdown protection, exclusives. In other words, if you sell us, you can't sell anybody else. Macy's played the we want it all our way game for many, many years. And many brands basically took a deep breath and did business with them because that was the only game in town for their merchandise.

24:26Mark Cohen:So if we were talking 10 years from now, do you think Macy's still exists?

24:30Jeff Kinney:It's problematic. They have survived several attempts by activists to move into the stock to monetize their assets, which is principally their real estate. And they've all failed because, frankly, there's no there there. Even though you could argue that Herald Square in New York, Union Square in San Francisco are worth an enormous amount of money, is there a buyer who's going to pay billions of dollars to put an office tower on top of Herald Square? Answer is no.

25:00Mark Cohen:So, Mark, I am not a business analyst of any sort, but when I look at Macy's, I see a company whose market cap is a bit over$4 billion with a real estate portfolio estimated at roughly double that. And when I look at their other assets, their Thanksgiving Day Parade is massive, not only as marketing for the brand itself, but as a profit center. They're selling sponsorships for the balloons and floats and who knows what else. And they're getting a share of the ad sales for one of the biggest TV events of the year. So am I crazy, Mark, for thinking that the Macy's parade is maybe the single most valuable asset that Macy's still has?

25:44Jeff Kinney:Well, you're not crazy, but you have to reflect on the fact that for anything to have value, there has to be someone who holds the value and someone who has an interest in possessing the value. Would the Super Bowl ad madness have any firmament if there was no Super Bowl supporting that three-hour window? So the parade has been forever attached to Macy's as a name. And over the years, it became a commercial issue unto itself. They don't tell you how much it costs to put on the parade, and they won't tell you how much they receive in return. They will never reveal it unless it was required by law.

26:24Jeff Kinney:It is likely to be a substantial profit generator. Nothing gets presented during the parade that doesn't have a price tag attached. But of course, it doesn't translate these days into footsteps doing business inside the store.

26:42Mark Cohen:After the break, Tony Spring thinks he knows how to get the footsteps inside the store. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back.

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29:06Mark Cohen:We've been talking about the fate of Macy's with Mark Cohen, a former retail executive and business school professor. and Tony Spring, the CEO of Macy's. Spring spent nine years as CEO of Bloomingdale's, a more upscale store within the Macy's portfolio. And in early 2024, he took over the mothership. Spring knows, as does the entire retail industry, that Macy's Inc. is not in great shape. So he has been asked to engineer a turnaround. He came up with a strategy called a bold new chapter.

29:41Tony Spring:The strategy is made up of really strengthening the Macy's brand, and that includes divesting about 150 stores that are no longer relevant.

29:50Mark Cohen:When Spring says divesting, that means shutting down the failing stores and selling the real estate. What else is in the bold new chapter strategy?

30:00Tony Spring:It's investing into the improvements within our merchandise assortment. We've revamped the entire private brand portfolio, exiting brands that were no longer relevant, introducing new brands that resonate with the multi-generations of consumers. I asked for an example of this. Right now you have this trend on young kids, boys wearing perfume, you know, cologne. They've seen it on social media, on TikTok. And so we got to lean into that. We got to have the best assortment of perfumes and colognes for kids so that they think of Macy's as being a great destination to buy their fragrances.

30:34Mark Cohen:Okay.

30:34Tony Spring:What else is Tony Spring working on? Improving the condition of our stores, more staffing, better visual presentation, embracing different store formats. And then at the Bloomingdale's and Blue Mercury brands, it's leaning into the affluent and luxury consumer. And surrounding it is this desire to take cost that is not visible to the consumer through automation, through reducing complexity out of the business so that we can give the customer just a better experience no matter how they shop.

31:02Mark Cohen:So here's something you've said in the past. I love stores. I'm a store guy, but bad stores are bad stores. You just told me that you are planning to close a lot of stores that are no longer relevant. What makes a bad store bad? What makes an irrelevant store irrelevant?

31:19Tony Spring:You had the last store open in the mall. The store was built in 1965 for a different time period. The store has a roof that's about 37 years old on a 30-year lifeline. The elevator doesn't work. The escalator breaks five times a year. The brands don't want to sell us. So it's made up of private brands and brands that don't care about their points of distribution. I'm looking at something here, Tony.

31:44Mark Cohen:It's a consumer survey with 1 ,200 respondents. It shows that awareness of Macy's is incredibly high, 88%. But then when you look at the other categories, Macy's popularity, usage, loyalty, Macy's buzz, Those are all in the 20 to 30 percent range. That is an unbelievable gap. So what makes you think you can recover from that?

32:10Tony Spring:I'm a big believer in self-awareness and ambition. You need to know who you are before you can get to what you want to be. We spent a greater part of 18 months basically saying we're not good at this. We need to work on that. This needs to be stronger. We did our own version of that same survey, which said high level of awareness, not a strong enough level of conversion. The issue remains with us. How well do we execute our strategy? How fast do we move? How well do we communicate those changes?

32:39Mark Cohen:So there is a practice among some businesses called a premortem. I don't know if you've ever heard of this. I am very fond of it. So, you know, you imagine that things have failed and then before it has a chance to fail, you sit and think, well, why would it have failed? And let's fix that now. So if you were to pre-mortem Macy's Inc. right now, what do you think are the biggest existential threats to its continued longevity? Is it online shopping? Is it discount retailers? Is it maybe people just deciding to buy less stuff, et cetera, et cetera?

33:12Tony Spring:I think disintermediation, the brands being able to go directly to the consumer, the brands deciding that you are not as important a point of distribution. And this comes down to being, you know, a people business. The people that are attentive, return your phone calls, text or emails, pay you on time, treat your brand with respect. Those are the people that are going to continue to sell you or want to sell you in the future.

33:36Mark Cohen:Name a brand partner or two that's pulled out of Macy's over the last five or 10 years.

33:42Tony Spring:Nike would be one. They took an 18-month break and then decided that they needed more points of distribution, and we've built a nice business back together again. Name a couple of brands that you'd like to have that you don't have yet. We'd love to have Tory Burch at Macy's. We have a nice business at Bloomingdale's. We would love to have On Running, which is a great sneaker brand that we have at Bloomingdale's that we don't have at Macy's.

34:06Mark Cohen:So what is that kind of conversation like with a brand like, let's say, Tory Burch of trying to convert them or include them in Macy's since they're already in Bloomingdale's?

34:14Tony Spring:Yeah, you have to talk about, again, the benefit of a multi-brand retail environment where you're talking to 41 million active customers at Macy's versus 4 million active customers at Bloomingdale's. Based on the scale of Macy's, you have more affluent customers shopping at Macy's than shop at Bloomingdale's. You have a more diverse customer shopping at Macy's. Bloomingdale's is a great business. I love that brand having grown up there, but that's a slice of America. Macy's is America. And if you really want to understand how fashion works across the country, you need a partner like Macy's that can help give you that feedback.

34:50Mark Cohen:Describe for me what a good Macy's store looks like in the near future. What specifically is changing and improving?

34:56Tony Spring:You hopefully will go to Macy's and find a wide variety of assortment, but not the endless aisle you've been hearing about. I don't want to wander down someplace that never ends. I want to go to the best aisle where I have actual variety, not redundancy. So you're going to show me a handful of items in a category because I want to buy a polo shirt, and you're going to give me good, better, best. You're going to be in stock in my size. I'm going to be greeted by somebody who's pleasant. I'm going to be rung up efficiently and effectively. I also might go and meet my boyfriends, girlfriends, whoever it is, and meander through the store and actually discover some things that I haven't heard of or seen before.

35:34Tony Spring:I might stop into the cafe or to the restaurant or Starbucks and grab a latte. and I'll remember the experiences being Macy's is there for me when I need them.

35:44Mark Cohen:We spoke with one retail analyst who, by the way, is a fan of yours. He thinks the turnaround is really promising. He said that your parade, quote, generates magic, but that's not always the experience of shopping at Macy's. He said, you guys run this fantastic parade, but you can't put any magic into your shop floor. I'm curious to hear your response to that. And I'm also curious to know whether you think about integrating the parade designers into your customer experience team somehow.

36:13Tony Spring:Yeah, I think a challenge given, challenge taken. How do I recreate a once a year phenomenon that has, let's just say, a few dollars thrown at it to make it extremely magical? I think it should inspire us to step up and to deliver something far better. But I think we also can't hold the mirror on the parade to the store experience and say that's what every day is going to be.

36:37Mark Cohen:Given that you want to grow your luxury business and given your Bloomingdale's background, I'm curious if you're thinking about trying to use the parade to move things in that direction. Should we look for a Tory Burch float, for instance, or anything in that direction?

36:54Tony Spring:If Tory Burch had something to say in the parade, I'd love for them to be in the parade. You will see more integration in the future of the things that we do in the parade to the things that we do in the store. Think about it this way. Black Friday is the kickoff to the final parts of the holiday season. And we own America in conveying that message. Thanksgiving is a family celebration that begins not on the day of Thanksgiving, begins several weeks before. Do you have enough chairs? Do you have enough plates? How do I keep people active? Do I have games for them to play? So we have this opportunity to be a part of America's Day in a very meaningful way before and the kickoff to America's celebration of the gifting time of the year with the 28 and a half or 29 million people watching.

37:48Mark Cohen:By the way, Macy's does already sell some Tory Burch merchandise like watches, fragrances and sunglasses, but not the more expensive items like bags or shoes, which they would like to sell. So we just heard Tony Springs plan for a bold new chapter. Will it work? I have no idea. The bad news coming from Macy's doesn't seem to stop. Last November, Macy's revealed that an employee had intentionally hidden around$150 million in delivery expenses over the previous few years. This news forced a delay of the company's quarterly earnings report. That is bad. While the retail industry may not be as technically complicated as a lot of the industries we're used to talking about on this show, like health care or artificial intelligence, it is plenty complicated in its own way.

38:41Mark Cohen:This makes it hard for any outsider to predict whether Tony Spring will be successful. So we went back to an insider, Mark Cohen, the former retail executive and business school professor, to ask what he thinks of the bold new chapter strategy.

38:58Jeff Kinney:Well, I'm generally speaking hostile to sloganeering. And Macy's has been guilty of sloganeering for well over a decade. They were invested in the magic of Macy's, which basically there was no magic to Macy's. The most recent CEO was all invested in something called a Polaris strategy, which not to be crude was more bullshit than real. There's no there there behind what Tony Spring has been able or willing to describe. His general description of improvements in terms of making the assortments more relevant to consumers, that's kind of like motherhood and apple pie. I don't decry him for saying those words, but at the end of the day, I'm from the school that says, come up with the idea, put the idea in place, measure its success v.

39:53Jeff Kinney:failure, and once it's successful, start talking about it. But until it's successful, keep your mouth shut, because you create expectations that may not be realistic. When's the last time you were in a Macy's? A few months ago. I passed through Herald Square whenever I'm in Midtown. And sometime before that, I hit a bunch of their suburban branches in Metro New York. When I'm asked to comment about someone's success or failure, I try to be at least up to date in the observations that I make. So what did those Macy's stories look like to you? They look terrible. I'm told that Tony Spring has begun a process of cleaning up their act.

40:36Jeff Kinney:I don't know him, but I know him by way of background. He did a marvelous job of ensuring that Bloomingdale's was a pristine, up-to-date, well-presented store. And so I'm told there has begun a process of improvement that's visible. This literally means turning the stores into something far more clean, neat, and friendly than they had become under prior regimes.

41:03Mark Cohen:Okay, so the clean, neat, and friendly I get, but you're also talking about the lack of good assortment, the lack of stuff that people want. What do they need to do there?

41:10Jeff Kinney:Well, you have to start with clean, neat, and friendly, and then you have to fill the store with merchandise customers really want to buy.

41:20Mark Cohen:How hard can that be to figure out?

41:22Jeff Kinney:That is the codex of retailing. That is enormously difficult to do. It takes years and years and years to build a team of people who can create assortments, which, by the way, have to be created, recreated, represented almost every day, especially today when the customer's loyalty can't be counted upon. If you please a customer today, they may very well come back. If you piss them off today, they may never come back.

41:53Mark Cohen:After the break, we talked to a very different kind of retailer who seems to have the loyal customer thing all worked out.

42:02Tony Spring:It's gorgeous inside. The building itself is so cool.

42:06Mark Cohen:I hate Shane, but I think some of the stuff he's doing is good.

42:15Mark Cohen:I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back.

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44:43Mark Cohen:How do you design a store where people are dying to shop? Macy's is trying to figure that out. Again, having been largely unsuccessful for the past few decades after building one of the biggest department store chains in history. At the very least, Macy's does know how to throw a killer parade. In part one of this series, we heard from Jeff Kinney, author of The Diary of a Wimpy Kid books, which have sold more than 300 million copies. For the past 16 years, Kinney has had a giant balloon in the Macy's parade, a balloon of Greg Hefley, the wimpy kid himself. Jeff Kinney lives with his family in Plainville, Massachusetts, and he has built a midsize media empire around Wimpy Kid.

45:29Mark Cohen:Spinoff book series, films, a musical, board games, quite a bit more. And he's got one more project that is related-ish, but not quite.

45:39Will Coss:We have a bookstore in the center of town, which is called An Unlikely Story, which has been in business for about nine years.

45:46Mark Cohen:If I were to come visit your bookstore, how much Wimpy Kid do I see there?

45:51Will Coss:You'd see very little Wimpy Kid at the bookstore. We've got a statue of Greg on the main floor, but mostly it's a general bookstore.

46:04Mark Cohen:You've probably never heard of Plainville. Only about 10 ,000 people live there.

46:09Will Coss:I moved up to Massachusetts in 1995. My wife and I picked Plainville by creating a Venn diagram of three locations. Boston Logan Airport, T.F. Green Airport in Providence. And then my wife's parents live in Worcester. And right at the intersection of those three places is this little town called Plainville.

46:31Mark Cohen:Plainville is about an hour's drive to Boston, half an hour to Providence, Rhode Island, and 15 minutes to Foxborough, Mass., where the New England Patriots of the NFL play their home games.

46:42Will Coss:So what led Jeff Kinney to build this big bookstore here? We started creating it about 12 years ago on the site of an old market called Falk's Market, which had been built in, I think, 1853 before Lincoln became president. It was a beloved market that everyone had at the center of their lives for decades and decades. It had been abandoned for about 17 years. So once Wimpy Kid took off, we bought the building, took it down and created a bookstore.

47:12Mark Cohen:Why did you want to do that? You already had a very going concern with your property that had all these other tentacles. Why did you want to commit to a big physical property like a bookstore? You were probably doing this at the time when independent bookstores were closing at the rate of, I don't know, one a week or something. So what gave you this impulse?

47:32Will Coss:A lot of people were really embarrassed by the derelict building in the middle of our town. We just wanted to build a building that the town could feel proud of. So my goal was just to create a nice building and put the word Plainville on the side. We didn't give any thought to what was going to be inside. At a certain point, I was really legitimately thinking about just making it a basketball court inside because I figured we could save a lot of money if it was just hollow.

48:02Mark Cohen:It's been described to me from other people who are not you that your bookstore is an absurdly successful stop on the book tour circuit, that every author worth anything wants to come to your bookstore and do an event, and does, in fact. How did that happen?

48:20Will Coss:Well, that's music to my ears. First of all, we created a really architecturally special place. As a touring author, I've seen hundreds of bookstores all over the world. So we really tried to capture the essence of what makes a bookstore feel homey and special and magical. We use lots of old materials to make it feel like it was really lived in. It doesn't hurt that we're on the route between Providence and Boston. If we're in the middle of Iowa or something like that, it would be a lot harder for authors to reach us. Is the bookstore profitable? The bookstore is not profitable. We lose quite a bit of money each year in the six figures.

49:00Will Coss:There are lots of different reasons for that. We do try to pay fairly, but we also, you know, we give a lot of our employees health care, things like that.

49:09Mark Cohen:So you moved to this town, you're raising your kids there, you've got your wimpy kid property growing and developing, and it sounds like a very happy, productive place for you to live. Then you decide to open a bookstore, which I don't know if you have a financial advisor, I'm guessing they would have advised you against that. Yes, I think so. But you did it. Yes. And you still have it, even though, as you said, you're losing quite a bit of money. And then you decide, rather than pulling back, what sounds to me like you're instead doubling down, if not more. So describe that.

49:43Will Coss:Yes, we are redeveloping the whole downtown center, which is about four city blocks. This is an ambitious plan, maybe a foolish plan, but also really an exciting plan. Downtown Plainville has been depressed for years.

49:58Mark Cohen:Tell me a little bit about the history of the town. Like a lot of the Northeast and New England, I'm guessing there was a kind of industrial or manufacturing or commercial heyday that is long in the rearview mirror. All these towns and small cities are trying to either hang on or reinvent themselves. Where does Plainville fall in that?

50:19Will Coss:Plainville was built around a jewelry industry. One of the companies was called Whiting and Davis. It employed thousands of people. And what they're most known for was creating the chain mail dress that Tina Turner wore in Mad Max Thunderdome. But yeah, now the center of town is sort of hollowed out. And in fact, a factory building that stood there for at least 80 years, we're about to take it down in about two days and create something new.

50:55Mark Cohen:We decided to take a drive up from New York to see Plainville for ourselves. It took about three and a half hours. Getting close to town, we pass some outlet shops, some nice houses and some not so nice houses. We keep going, and there on Route 1A, we instantly see that Jeff Kinney was right. Depressing downtown, really nice bookstore. The contrast is stark. I could imagine an author driving into town on a book tour, thinking, I'm going to kill the publicist who sent me here. There aren't a lot of buildings. Most of them are run down, tired. And then you come upon an unlikely story. I finally get the name.

51:38Mark Cohen:And it looks more like the ideal of a New England bookstore, like something that only Hollywood writers would dare imagine. The building is, like Kinney said, architecturally special. It's three stories built in a style he calls Federal Wharf, muscular and proud, like something you'd see in a wealthy port town like Boston or Portland. It's late Saturday morning when we arrive and inside the store is already crowded. All ages, busy cash registers, a humming cafe. The walls are hung with old wooden signs from old Plainville, but the tech is modern. Nice lighting, helpful employees everywhere, even nice bathrooms.

52:19Mark Cohen:If it weren't for the books, you'd be surprised it's a bookstore. On the day we visited, Kinney was hosting a presentation called Plainville Center Past and Present. He wanted to show his renovation plan to the community. He was nervous beforehand. Kinney knows he is a very big fish in this small pond, and because he is an unusually considerate person, he's worried that his plan will upset some of the old-timers. I asked him if he had had to buy out the other business operators in town and how complicated that was.

52:58Will Coss:we did buy out the other operators but i wouldn't put it that way because it sounds like a little bit of a hostile action we floated the balloon with each of these property holders and said hey tell us if you're ever ready to move on and in fact the owner operators of the tool factory that was across the street they were just ready to retire so how many people here actually shopped at Falk's Market. Okay, great. As soon as people started walking in, I said, okay, everybody here knows much more about Plainville's history than I do.

53:30Mark Cohen:As it turned out, Kinney didn't need to worry. The presentation was well attended, and it went over well, too. Kinney showed some images of what a new Plainville Square would look like, and the town historian Christine Moore showed some images of the before times, the better times. The crowd was older, not surprisingly. There was very little dissent and a lot of reminiscing and trying to refresh the memory. Whose grandfather ran which hardware store and which factory closed down when? And you remember that milkshake you could only get at such and such drugstore?

54:36Will Coss:restaurant, a beer garden, hopefully an Airbnb, and maybe a few other buildings as well. But right now you're here on a day when this is ash and dust. You know, we just took down seven buildings. So if you had been out of town for the weekend, you might feel like the town you grew up in has been flattened by a hurricane. But you know, this is the palette that we have to work with. And we're going to start building up. What's your budget? Our budget, we don't know yet, But I think that this is going to cost somewhere between$17 million and about$35 million.

55:11Mark Cohen:Do you ever have conversations with friends and family about what you might have done instead with that money?

55:17Will Coss:No, I don't often do that. I think people respect what we do with our money. We're doing something a little bit unusual, investing in the town and infrastructure of the town. The thing that really gets me excited is the idea of changing this town, not for just our generation, but for generations to come. Motivation is that famous Greek proverb that society doesn't become great until old men plant trees that they'll never enjoy the shade of.

55:47Mark Cohen:The only place in Plainville where you can see the future is back at Jeff Kinney's bookstore. A crowd is already starting to gather. By evening, there will be hundreds of people lined up around the block for a visiting author.

56:05Mark Cohen:The author is a local hero, Jason Tatum of the Boston Celtics. He is one of the best, richest, and most famous athletes in the world, fresh off a Celtics championship and an Olympic gold medal. He has come to the big bookstore in the little town of Plainville to talk about a children's book he just published. It's called Baby Dunks-A-Lot. For authors of this magnitude, Jeff Kinney himself runs the Q &A.

56:33Will Coss:All right, Jason, thank you so much for coming to An Unlikely Story. We're so honored to have you here. It's really cool. So let's everybody give up one more time for Jason.

56:46Will Coss:So you've done lots of different events before, Q &As and things like that, but have you ever done something like this as an author? This is a first for me.

56:55Tony Spring:I played basketball in front of thousands and thousands of people. But I'm honestly a little nervous to be up here.

57:01Will Coss:Wait a second. You also play basketball? Did not know. All right. This is cool. We're off to a good start.

57:08Mark Cohen:The Q &A was a big success. Tatum had pre-signed hundreds of books, so he didn't stick around long afterward. But the store stayed open late and the crowd kept shopping. We wanted to know what they thought of Jason Tatum, of the store, and of their other local hero, Jeff Kinney. We spoke with Benjamin Micucci.

57:30Tony Spring:Jason Tatum is my basketball hero. I want to be in the NBA and be just like him. And, you know, getting to see him and Jeff Kinney at the same time, and Jeff Kinney is my favorite author, is just amazing for me.

57:45Mark Cohen:We heard from Izzy Gaudette.

57:48Jeff Kinney:We just did a loop through the bottom, and it's got so much, like from books to non-books. I'm definitely going to have to come back.

57:56Mark Cohen:And here's Chris Alba.

57:58Will Coss:Growing up here in North Attleboro, this corner was always like, it was a very dilapidated building, very old, and it didn't look great. He's totally redone the way this entire area looks. It's really popular, and it looks awesome. So I love it. I think that there is a chance for so much improvement. Like, if we lived in Beverly Hills, we would have no interest in doing this kind of a thing. But Plainville can be changed in a really outsized way.

58:28Mark Cohen:I assume it felt like you were rowing against the tide by opening an independent bookstore in a relatively small place. But it does seem like independent bookstores are back on the rise. They've done fairly well through COVID and then post-COVID. It strikes me, and I may be wrong, that as the world continues to get bigger and faster and more consolidated and more digital and more connected, that there's a counterpush for a return to the handmade and the homemade and for community. What's your view on that?

59:00Will Coss:I think there is. I think that people are craving this feeling of connectedness. I'm really surprised that the effects of COVID have had such a long tail. I think we're seeing the effects of COVID on these 20-something-year-old people who didn't have a high school graduation, who now want to go into jobs where they work with peers physically in person. I think that a bookstore is part of that experience. But I also think that there's a practical aspect to it is that you really can't replicate the book buying experience online. It's similar to the record buying experience. We grew up in a time where you went to the record store and you flipped through the big albums and looked at the artwork and heard the music overhead.

59:47Will Coss:It was just better.

59:48Mark Cohen:So, you know, Macy's is undergoing its own rehab or renovation at the moment. They're trying to figure out how this very old, old-fashioned, still prominent brand can persevere and succeed in the 21st century. And it strikes me as their challenges are similar to what you're trying to do now, which is build a place or create a space where people want to be with other people doing stuff that a lot of people stopped doing during our digital revolution. Do you see any connection between yourself and someone like them, some big corporate entity that's trying to reinvent their future?

1:00:25Will Coss:One of the things that's been really surprising to me is that a major beer operator, and I can't name names right now because we haven't signed papers, but they're interested in being in downtown Plainville. And I said, why are you interested in being here? And they said, because if you're here, you're the thing that people do. If we go into Boston or a big town like that, you're competing with 30 or 40 other restaurants. But in a place like this, you know, you've got a shot at becoming the show. So it's possible that if we set the table just so that we will get partners that we weren't expecting to get.

1:01:04Will Coss:And maybe Macy's could be a part of something like this. I'm very curious about what's going to happen because we're asking this really big question, which is if you invest in your downtown, can you change the fate of a town? Can you change the way that people feel about the town? Can you make the town a model for other towns? I don't know the answer to that. And I think that's going to be my life's work, is figuring out if this kind of thing can work.

1:01:35Mark Cohen:This made me think of the slogan that Macy's has adopted for its turnaround, a bold new chapter. That could have also been the name of Jeff Kinney's bookstore, but an unlikely story is better. In fact, an unlikely story might not be a bad slogan for Macy's, considering what it is up against. So I went back to CEO Tony Spring and I asked him what he thought of Jeff Kinney's new and improving Plainville and whether Macy's might consider opening up some kind of store there.

1:02:05Tony Spring:We are always open to evaluating different real estate opportunities for retail. I applaud what he's doing. I want vibrant towns across this country.

1:02:17Mark Cohen:Spring still lives in Westchester County, where he grew up. Westchester has some of the nicest, leafiest suburbs in America, with small-town main streets and high median incomes.

1:02:29Tony Spring:My town, we probably have more banks and restaurants than anything else. nail salons. I miss the candy store. I miss the bookstore. I miss the record store. Retail is that mix of variety that creates the reason for the stroll and the reason to spend locally. So we want Macy's to be a part of that experience. You know, I wish Jeff the best. I would say follow the adage from Cheers. Make sure you know everybody's name. Those little touches make the absolute difference in where you choose to shop again.

1:03:04Mark Cohen:It's hard to predict the future of Macy's or the future of Plainville, Massachusetts. Tony Spring and Jeff Kinney are both investing a lot in their respective turnarounds, and it's natural to wish them well. On the other hand, people are fickle, markets are fickle, and generally speaking, you don't succeed in the future by trying to mimic the past. But for now, those concerns will have to wait. On Thanksgiving, Spring and Kinney both had a parade to get to.

1:03:43Tony Spring:I'll be with my wife. I don't think my kids will come because they'll probably be cooking Thanksgiving. And maybe a brother-in-law or sister-in-law, too. And the Macy's leadership family and hopefully some customers and colleagues will sit in the grandstand like many others and will enjoy the parade as it hits 34th Street.

1:04:02Will Coss:There's something really hypnotic about seeing one of those giant helium balloons move between the buildings. It's the outsizedness, which is so exciting. It's really cool when you see a giant Papa Smurf go by somebody's window or Clifford the Big Red Dog and you see the scale of the thing.

1:04:23Mark Cohen:What do you think the parade represents? It's this weirdly old-fashioned traditional event that in a world of much more dazzling modes of entertainment draws 30 million people a year on TV, which is astonishing to me. So what does it feel like to be an essential component of that?

1:04:44Will Coss:It feels like legitimacy to me. It feels like you're making a statement about your brand, that you're not just wishing and hoping that you're a part of this. It's like a theory or a thesis that you're saying, I think we belong here. And then after a certain amount of time, you say, you know what? We do belong here. This is right.

1:05:04Mark Cohen:Do you interact with other property creators or representatives at the parade?

1:05:10Will Coss:I've become friends with Jeannie Schultz, the widow of Charles Schultz. And it's a small club, so it's pretty cool to be a part of that club.

1:05:19Mark Cohen:In a battle of balloons, would Greg or Snoopy win?

1:05:25Will Coss:I'm going to switch the question to be the Muppets. The first year, Diary of a Wimpy Kid, Greg Hefley was right behind Kermit the Frog. You think he could have taken him? Well, I was staring down the backside of a frog. And I said, that feels about right to me, you know.

1:05:46Mark Cohen:We asked Jeff Kinney for an update on his Plainville redevelopment project. He said the construction site we visited last year now has a built-out beer garden with plans to open in the spring. And how is Macy's itself doing? Tony Spring closed 64 Macy's locations this year, and he announced an uptick in earnings in all three brands, Macy's, Bloomingdale's, and Blue Mercury. Mark Cohen says we will just have to wait to see if that turns out to be a dead cat bounce, as Wall Street skeptics like to call it, or maybe something more. My thanks to everyone who spoke with us for these episodes. Coming up next time on the show.

1:06:30Tony Spring:Ultimately, his accounts were reduced to nothing and then he had nothing in the bank.

1:06:35Will Coss:Handel was a public composer. He wasn't composing really for the church. He was really performing. I've done all these 120 courses or something.

1:06:44Jeff Kinney:And every one of them is different, depending on where you are and who you've got.

1:06:50Mark Cohen:George Friedrich Handel's Messiah is iconic and hugely popular and beautiful. How did it come to exist? And how has it lasted? That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app. Also at Freakonomics.com, where we publish transcripts and show notes. This episode was produced by Alina Kullman and edited by Ellen Frankman. It was mixed by Jasmine Klinger with help from Eleanor Osborne. We had recording help from George Hicks and research help from Daniel Moritz-Rabson.

1:07:29Mark Cohen:The Freakonomics Radio Network staff also includes Augusta Chapman, Dalvin Abouaji, Elsa Hernandez, Gabriel Roth, Greg Rippon, Ilaria Montenacourt, Jeremy Johnston, Morgan Levy, Sarah Lilly, Tao Jacobs, and Zach Lipinski. Our theme song is Mr. Fortune by the Hitchhikers, and our composer is Luis Guerra.

1:07:51Will Coss:We used to be Slacksville for a time, I think unofficially, and so Plainville seemed like a giant upgrade.

1:08:02Tony Spring:The Freakonomics Radio Network, the hidden side of everything.

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