Is a self-service model Macy’s ticket to success?
Back in March, RetailWire reported on steps Macy’s was taking to get its business turned around. One step was to put greater emphasis on self-service in stores, including in departments such as beauty and shoes where associates have traditionally been actively involved in assisting customers. As it turns out, self-service pilots in shoe departments have proven so successful, Macy’s is rolling out the concept — to one degree or another — in all its stores.
Karen Houget, Macy’s CFO, told analysts earlier this month that self-service pilot stores “produced a nearly double-digit shoe sales increase in the first quarter, well above the shoe sales trend for the rest of the stores.”
The rollout of self-service shoe departments, which began May 1, is expected to be completed by the end of July. To make the model work, Macy’s has reconfigured departments to move stock, previously held in the backroom for associates to retrieve, to the store floor where customers can search for themselves.
Macy’s Jeff Gennette, speaking on the earnings call, said shoes are “a real passion category for our customer.” He added that Macy’s needed to do something, as the chain continued to lose share over the past two years.
In its pilot tests, Macy’s focused on getting its product selection right. Having achieved its goal, Macy’s then turned to the shopping experience.
“We really looked at the amount of management we needed, what the back of house had to be. What the amount of sales associates [should be], what their commission rates would look like, to give them the incentive to work with our customers. And then we really looked at that overall model that would say, how much of this could be self-serve, how much of this could be … needs to be high touch,” said Mr. Gennette (via Seeking Alpha).
- Macy’s (M) Q1 2017 Results (Earnings Call Transcript) – Seeking Alpha
- Does Macy’s incoming CEO have a plan to turn the business around? – RetailWire
- Self-service shoe departments coming to three Chicago-area Macy’s stores – Chicago Tribune
DISCUSSION QUESTIONS: How do you account for Macy’s reportedly improved sales performance in self-service shoe departments compared to those employing a service model? Do you think Macy’s is correct in putting a greater emphasis on customer self-service in its stores?