We are going to be expanding that. So, we are looking at all of the categories where we are €“ we play in and what’s our opportunity to narrow our assortment on the most important things and expand in areas that we are not. We are looking at it by customer type. So, to Oliver’s earlier question about when you look at Gen Z and Alpha, what are those categories that they want to traffic in. And what’s the best way for us to bring that to market. From an owned model, it may not be profitably €“ we may not get the ROI on that, but on marketplace, it makes a great deal of sense. So, expect us to look at the full portfolio. We have a big tent, we do when you think about opening price, if you think about our off-price business is going out below $20, you look at Macy’s going out in the $40 range across the same categories and Bloomingdale’s is more than double that.
So, depending on where those income tiers are and where those customers are, we are looking at our full arsenal between VDF, hybrid marketplace and owned to be able to respond to that. And we now have the tools to be able to do that. When we look at it in the context of market share gains and new customers, we are really looking at €“ and white space for us would also be customers that would consider our brands, but don’t go to data on them because they don’t find or brick-and-mortar, particularly convenient. So, there may be places, even though we are in 49 markets of the top 50 markets, there is many ZIP codes where we don’t penetrate because customers are going to off-mall and that’s how they are satisfying their needs. That’s why we are so excited about what we are looking at in terms of Market by Macy’s and Bloomies.
So, expect us to continue to fortify that. When we do that, the digital flywheel and the omnichannel business, starts humming. So, that’s how we are looking at where we are going to go with white space and new customer opportunities.
Adrian Mitchell: Matt, good morning to you. So, to answer your question very simply on gross margin, we remain very focused on high-30s in terms of our gross margin rate. The thing to keep in mind is as we continue to scale Macy’s media network, continue to scale marketplace, those were additional profit pools that will certainly strengthen our margin profile. But you also raised an important question about SG&A. So, let me spend a little bit of time on that because I think it’s important to mention for us to understand. The first thing is, in 2020, we were very committed through Polaris to reset our cost base, and we actually did that. So, if you look at 2019 versus today, we have about 30,000 colleagues less in the workforce, that’s about 27% less colleagues on sales in 2022 that’s relatively comparable to 2019 levels.
But the important thing you have to keep in mind is that we cannot fuel growth without investing in our talent. And this was on display in 2022 when you think about the quality of execution and the success that we have had with the priorities that we have committed to over the course of the last couple of years. So, that really was on display last year. But let me just dimensionalize our payroll investments and speak to our successes on the non-payroll side. On the payroll side, as we make investments in talent, the first and foremost thing is around the customer experience. And what we have done in terms of in-store and supply chain is as of May, we have actually have nationwide $15 minimum pay, but the important thing is that we are continuing to see productivity, for example, in our stores, above 20% relative to 2019.
