Photo: RetailWire
Has Macy’s become a different and better retailer?
Macy’s had a good year in 2021 and perhaps will silence, at least temporarily, those who say that department stores are going the way of the dodo bird.
The retailer, which operates its namesake chain, Bloomingdale’s and Blue Mercury, reported that same-store sales in the fourth quarter were up 27.8 percent versus last year and up 6.1 percent when compared to the same period in 2019.
The company attracted new customers in the fourth quarter, with 7.2 million buying merchandise sold in Macy’s stores and on macys.com. Fifty-eight percent of those shopped on Macy’s website. The retailer’s digital sales improved 12 percent over the fourth quarter of 2020 and 36 percent over 2019.
“We are now more digitally led and customer-centric in our planning and execution,” Macy’s CEO Jeff Gennette said yesterday on the company’s earnings call. “We have also demonstrated the value of an integrated company, meeting customer expectations for a more seamless shopping experience across digital and store offerings.”
Macy’s announced on the call that it would not split off its digital business in the face of investor pressure led by Jana Partners. The activist investor in October delivered a letter to Macy’s board demanding that the company “de-omnify.”
Mr. Gennette told analysts that Macy’s digital platform is fully integrated with the rest of the company’s business. This was not the case in 2019 when digital ops were a “siloed organization.”
“We have a scaled platform, operating the number two website in our categories in the nation with 39 percent digital penetration, an increase of nine percentage points versus the fourth quarter of 2019,” he said.
Since that time, he added, Macy’s has closed stores in C and D malls in order to focus more on A and B locations and to open smaller non-mall locations in high traffic areas. Mr. Gennette said Macy’s has actually slowed closing some C and D mall stores as it scales up its standalone properties.
Macy’s has also simplified its promotional strategy.
“Pricing is simpler and clearer, allowing our customers to better understand the value they are receiving,” said Mr. Gennette.
Macy’s technology efforts are focused on improving the customer experience.
“We successfully built a new enterprise data and analytics organization that is helping us to embed data and analytics into everything we do,” he said “We have already seen improvements in our efforts around personalization and pricing. In short, we are a different Macy’s.”
Discussion Questions
DISCUSSION QUESTIONS: Is Macy’s a different and better retailer today than it was in 2019? Has it done enough to make itself relevant in the marketplace?
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