On the one hand, it has become easier and easier for people to access, review (and read peers’ reviews) and purchase clothes online, hence the much stronger growth in e-commerce. Just sign into your Macy’s account & update your preferences for a more personalized shopping experience. ), and events like Santa Clause at Christmas or should they try to compete head to head with their e-commerce-first counterparts? [5] Aaron Cheris, Darrell Rigby and Suzanne Tager, “The Power of Omnichannel Stores,” Bain & Company Insights: Retail Holiday Newsletter 2016-2017, December 19, 2016, http://www.bain.com/publications/articles/retail-holiday-newsletter-2016-2017-4.aspx, accessed November 2017. And what lessons could we learn from them? Obviously grocery and restaurant business are still very local and off-line based, but for Macy, how can it make it’s off-line business more irreplaceable? Macy’s could “use digital technologies to improve in-store visual merchandising, help customers connect with in-store associates (or chatbots or remote experts, if they preferred), speed checkout times and customize offers.” Alibaba also put up the “New retail” strategy and use “HeMaXianShen” to pilot the off-line business. Having worked at another large US retailer, though, I have seen the aversion to some of the large investments that are required to achieve these goals. Opinions expressed by Forbes Contributors are their own. Request our corporate name & address by email. Macy’s, as well as may big box stores, faces an interesting challenge with the headwinds of digitalization. It will be very interesting to see how retail in general, and Macy’s specifically, transforms over the next decade. In fact, just last year, Macy’s launched its own Chinese ecommerce portal (https://www.pymnts.com/news/retail/2016/macys-will-launch-a-chinese-e-commerce-site-in-2017/) after initial success on a storefront on Tmall Global, a web shopping site for imported products operated by Alibaba Group. At the meeting, Jeff Genette outlined a new three-year plan called Polaris. The restaurant industry is an interesting analogy since even though everyone can get takeout or cook at home, they are still motivate to go to restaurants since they view it as a social experience and not simply a chore. Macys.com has launched a new denim fit finder for women. I think for giant retailers like Macy’s, omnichannel is the future. It’s convenient: You can do it at home or at work, without using gasoline or fighting to park…product reviews and recommendations are extensive.”[2] BI Intelligence estimated that “U.S. Using Latin slogans is not a motivator when the life of a beloved institution is at stake. Right now, capitalization rates are near all-time lows (see p. 3 of http://www.lazardnet.com/docs/sp0/4915/Lazard_USRealEstateIndicatorsReport_201403.pdf). The e-commerce threat is real though. For the sake of this mind exercise, it’s fair to assume that same store sales is going to shrink as more customers become digitial. To respond to the business headwinds in the short-term, Macy’s management has announced the closures of 68 stores in 2016 and early 2017, and its intention to close approximately 30 additional stores. Perhaps online shoppers are a very different type of consumer and Macy’s should think about serving them differently via a more segmented strategy? 4. However, I think an important solution that merits more discussion is Macy’s need to focus and invest more into its own ecommerce platforms. Optimize store portfolio. The idea of store pick-ups and using store inventories to serve online customers have proved effective for retailers and I believe Macy’s can push this forward and shift its focus from brick and mortar to an effective combination of online and offline. In particular I’m thinking of one of the trends in the market – pop up stores. [4] BI Intelligence, “Macy’s restructuring to focus on digital,” Business Insider, http://www.businessinsider.com/macys-restructuring-to-focus-on-digital-2017-1, January 9, 2017, accessed November 2017. They are easily accessible in city centers or in dominant shopping malls. I expect sales to drop more than management hopes and projects, and I am looking for more realistic planning of the company’s future. It would also be interesting to see more information on average basket size, rate of returns, and operational costs both in-store and online, broken down by price point, brand, category, and location to see if any obvious trends emerge. [7] Aaron Cheris, Darrell Rigby and Suzanne Tager, “The Power of Omnichannel Stores,” Bain & Company Insights: Retail Holiday Newsletter 2016-2017, December 19, 2016, http://www.bain.com/publications/articles/retail-holiday-newsletter-2016-2017-4.aspx, accessed November 2017. You proposed some excellent turnaround strategies for Macy’s going forward, especially investing more in digital technologies to improve the in-store and omnichannel experiences. Some markets have subtly different needs such as preferences for fashion versus basics and addressing that is key to maintaining happy customers. One point I’d like to touch is the real estate value and what should Macy do with it. Department stores have shown leadership in innovative ideas beyond their core fashion focus and have sold products such as computers, sporting goods, or even books when the demand was strong. Fully diluted earnings are seen at $2.45 to $2.65. At a time when so many players are trying to strike the perfect balance between online and physical stores, with retailers like Bonobos and Warby Parker moving to physical locations, and start-ups focused on pop-stores emerging, could Macy use its retail expertise and prime locations to see new brands as friends and not foes? By signing up for Macy’s email and/or text alerts, you can be … The tool, which the nation's largest department store chain calls a "mobile companion," can be accessed … So, Macy’s will close 125 stores with a drop of sales of about $1.8 billion. However, the model I have in mind is one where the store maintain its centrality, and the online experience is of the perks of the brand. The company’s My Macy’s strategy ensures that every store has merchandise that caters to … And actually their large store portfolio can be a very strong asset if they use it in sync with the online channel. Strengthen customer relationships. We want to hear your thoughts and experiences around tech inequality. There are several reasons why I believe that department stores like Macy’s are here to stay. These stores are smaller footprint and have no inventory. Management indicated that 2020 is a year of transition, and the improvements will come during the next three years. 5 Strategies Macy’s Is Betting On to Power Its Turnaround #1 Loyalty Program. Now, the question is, how can we create a compelling new holistic experience for customers by integrating online and offline channels? You must be logged in to post a comment. Maintaining their brand image throughout that process would likely be challenging, but I assume possible. I don’t believe a giant retailer like Macy’s can ever be a pure online player, as brick and mortar is in their DNA and they still have many customers who shop in store (in reality, even many of the omnichannel customers make the final purchase in store). Founded in 1858, Macy’s pioneered many marketing practices such as a one-price system for all customers (instead of bargaining), money-back guarantees, Santa Claus during the Christmas season, and illuminated window displays to attract the attention of those passing by. Brick and Mortar is a dead business. The consensus price target is $8.19. In a typical customer’s shopping journey, there are many touch points with the retailer and an online presence increases the number of and returns from those touch points. We’re going to still improve the speed all the way through this year, browsing, transaction experience, to make it particularly how you shop in your local Macy’s.” I went to a Ross store this morning and found a couple of dress shirts that are the same shirts you can find at Macy’s, but at a significantly lower price. Macy’s owns most of the properties supporting its store locations. Next month, Macy’s will … The Macy's Thanksgiving Day Parade will feature a host of pandemic-related changes, but there will still be giant balloons, floats and musical performances. Macy's Credit and Customer Service, PO Box 8113, Mason, Ohio 45040. The stores are equipped with personal shoppers and have coffee and juice bars. While Macy’s is a $24 billion enterprise, management still has not learned from companies like TJX or Costco that a smaller executive organization could run the company successfully. I completely agree with your proposal that Macy’s should start thinking about a new way to provide values to its customers. CINCINNATI After reporting a 24% decrease in total sales and 7.1% comps decline for the month of January, Macy’s Inc. announced a number of initiatives designed to improve its performance.

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