Macy’s plans for the Christmas rush
Macy’s is exploring spreading holiday promotions, extending hours and playing up curbside pickup to better manage crowds this upcoming holiday season.
“Everything is on the table right now,” said Jeff Gennette, Macy’s chairman and CEO, last Wednesday on his company’s first-quarter conference call when asked how the department store retailer is planning to handle Black Friday and last-minute holiday crowds. “We’re working with our merchant and our marketing teams on options within the marketing calendar to reduce pressure points on big volume days.”
The concerns focused on Macy’s “biggest magnet” or most productive locations, he said.
One option for the retailer is to stoke demand earlier in the season. “We do think that people are going to jump on Black Friday earlier and earlier in the calendar. And so we expect it to start in full force after Halloween,” said Mr. Gennette.
Macy’s is also looking at its store hours “carefully.”
Mr. Gennette also pointed to a strong online presence and advanced omnichannel capabilities, including store fulfillment, as an advantage. He touted curbside pickup as a “big secret weapon … this holiday season.” Curbside wasn’t available for last year’s holiday. “The speed and the safety of curbside pickup we think is going to be huge for us this holiday season, if they’re not comfortable to walk into a store,” he said.
Finally, the retailer hopes advanced in-store social distancing practices will reassure holiday shoppers. “If they do come into the building, we’re going to be able to protect even the most nervous customers with crowds and their concerns about that. So that’s how we’re looking at it, but it’s still of work in progress,” he added.
A survey of 500 U.S. consumers in early June exploring holiday shopping from Voxware found:
- Fifty-one percent expect to begin holiday shopping earlier than normal this year;
- Fifty-seven percent plan to have more gifts shipped directly to recipients than last year;
- Seventy-six percent intend to purchase more than half of their gifts online;
- Sixty-two percent plan to purchase more stocking stuffers and last-minute gifts online.
- Macy’s, Inc. Reports First Quarter 2020 Results – Macy’s, Inc.
- Macy’s Inc (M) Q1 2020 Earnings Call Transcript – The Motley Fool
- Voxware Survey Finds COVID-19’s Impact on Consumer Holiday Shopping Behaviors Will Strain Distribution Operations – Voxware/Business Wire
DISCUSSION QUESTIONS: Do you expect shoppers to turn out for Black Friday and other busy holiday sales dates leading up to Christmas in similar numbers to the past? What strategies should retailers be exploring to drive sales while also safely managing crowds during the holiday selling period?
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24 Comments on "Macy’s plans for the Christmas rush"
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Founder, CEO & Author, HeadCount Corporation
The holiday season will be entirely contingent upon the pandemic. If the economy continues to lurch forward and progress is being made on a vaccine or treatments, then I would expect to see a strong holiday season. However, if the virus spread continues unabated and retailers are forced to re-close some locations, then I would expect a weak holiday season.
In any event, this will likely be a holiday season like no other, and so retailers need to be prepared for anything. Bolstering online, BOPIS and curbside will all be important service features of the coming season.
Co-Founder at Where and Share
Mark, it seems like retailers could use HeadCount to navigate decisions on how to maximize in-store traffic while complying with social distancing procedures!
President/CEO, The Retail Doctor
I can’t see how curbside pickup is the lifesaver for Macy’s at a mall. It already is challenging to find a space. Factor in other stores offering it, the need for super trained employees to handle such operations, and the weather, and I don’t see how that amounts to more than a blip. Once the election is decided, that will help, but if we don’t get the pandemic deaths down, all bets are off this holiday season.
The other challenge is making those curbside transactions profitable. How many of those will end up returned? The customers have to go into the store to do a return. You waste store capacity with customers returning stuff. Though they often buy something else in the store when they return it, so you don’t want to deny entry to people doing returns by any means. Maybe they should handle returns curbside too though. Sounds incredibly unprofitable but for the very scared customers who do not want to go in, it provides an option.
Podcast Host, Retail Influencer, Fractional CMO
This is a crystal ball answer. The pandemic is going to drive what happens. I think retailers owe it to themselves and to the public to try and mitigate crowds by encouraging steady purchasing online. This might mean hosting events that get online audiences thinking about special events earlier, or creating “special” buy moments but it represents a chance for retailers to steady out their business rather than wait for one special day that may or may not happen.
Vice President, Brand Development - IGA, Inc.
The holiday season will be hard to predict accurately at this point, but we do know this: Crowds drive the Black Friday business model. Crowds don’t make sense today and won’t during Black Friday either. But people will still shop, so look for Black Friday to be digital heavier than ever.
PS: Will Macy’s still around come holiday time?
I think there will still be a lot of unknowns and people will be holding onto their money this holiday season. I think if retailers go all in, they need to provide (refine) easy options to get products from them (curbside, online, delivery, etc) with easy uncomplicated return policies. I can see retailers starting Black Friday/Christmas sales a lot earlier than normal this year to get the jump and hopefully somewhat salvage the year.
Founding Partner, Merchandising Metrics
Black Friday, the actual day itself, was already diminishing in importance. “Black Friday” as a marketing handle was being pulled earlier and earlier into November. Alibaba will continue to make its 11/11 Singles Day more and more important. And now we hear that Prime Day may move into late October. Add all that to what could be a very cautious approach to heading out to a crowded mall, and I think Black Friday is a shell of its former self in terms of mall foot traffic. Macy’s is very wisely making appropriate contingency plans.
President, City Square Partners LLC
I agree with Mark Ryski’s comments with one addition. We have already seen that in some part of the country, as the pandemic surges, beaches and bars are full. If there is no business shut-down and stay in place orders for the holiday season, retailers should be ready for some level of crowd controls.
Consulting Partner, TCS
Black Friday is the single day event that could put shoppers and associates at risk. I hope all retailers have plans to move door busters online. It would be irresponsible and lack of planning otherwise. Amazon does it well with its Prime Day. It is also a good opportunity for the retailers to get advance registrations to process online door busters.
Managing Partner, Retail Consulting Partners (RCP)
It’s simply too early to predict holiday shopping in 2020. Everything from vaccine status to unemployment figures to local shelter-in-place restrictions will all have impact on consumers’ willingness and ability to turn out and purchase goods. The only things that appear to be sure bets are: the digital channel will continue it’s significant growth as a percentage of overall purchase behavior; services such as curbside pickup will continue to attract consumers; and retailers will continue to use stores as micro-fulfillment locations to address the consumer need for same-day or next-day delivery.
Principal, Retailing In Focus LLC
Even if there is strong demand during the holiday season, the long-term trend toward online shopping is going to accelerate. We all recognize that “Black Friday” isn’t what it used to be, in terms of crowds and sales volume, and the pandemic will just accelerate that decline. If we are in the middle of another wave, even without another round of store closings, many shoppers are going to avoid shopping indoors in crowded conditions, no matter what.
Founder, President, Bakertown Consulting
Customers will not be coming in the same numbers — but this decline has already been happening with Black Friday turning into a week or two week sale for many retailers. The winners will be the ones that can turn the “fun” of shopping on Black Friday into a digital experience. The 11/11 event in China is a great example where the shopper is having fun and spending money. Retailers just doing the same thing as last year will not succeed.
Managing Director, GlobalData
As an individual day of trade, Black Friday has been on the decline for a long time: the proportion of sales made on that date have been falling while the significance of days around Black Friday have been increasing. This year will simply accelerate that trend. While we don’t know what the pandemic situation will be like in November, it’s probably safe to say that retailers won’t be encouraging massive crowds in their stores and nor will many customers be comfortable with that. As such, the Black Friday event will be more subdued, more digitally driven, and more spread over a longer period of time. That has implications for managing online capacity, margin compression from higher logistics costs, and the role stores play in supporting sales and fulfillment. I don’t think the holiday season as a whole will be an unhappy one for retailers, but it will be a challenging one.
Retail Strategy - UST Global
All of the planning and sophisticated forecasting solutions out there can’t guess what the mood of the consumer will be this Christmas. Retailers are going to have to prepare to deal with the high probability scenarios — lower in-store presence, more delivery (and returns), efficient curbside pick up, low tolerance for long lines at the POS, but it’s a bit of a roll the dice as to what Christmas sales will turn out to be. Spreading sales over a longer time horizon (Black Friday on) is a good scenario for low density shopper throughput … will the consumer cooperate? That’s anyone’s guess.
Independent Board Member, Investor and Startup Advisor
Macy’s is smart to keep all options open for the holiday season. This year, there are too many variables with a wide range of possibilities. The key is to remain flexible and open-minded. You cannot go all in on any single initiative due to structural uncertainty of our moment. In Daniel Kahneman’s terms, retailers need to think and act fast and slow.
Co-Founder at Where and Share
I think the Black Friday turnout will depend on the level of consumer confidence and fear. Retailers should prepare for Black Friday as though we will still be in the midst of the pandemic. They should be prepared for a high level of BOPIS and online purchases. Consumers will have high expectations for low cost/fast shipping, even around the holidays. Retailers should be exploring their omnichannel capabilities as well as giving thought to the in-store experience.
In the past, we have seen crowds rush storefronts to get deals. Retailers are responsible for the safety of their customers. They should explore ways to limit large crowds and actually enforce social distancing. This may require altering store layout, adding personnel, or using traffic counters to limit the number of shoppers.
Founder & Principal, PINE
As many have said, it’s too hard to predict whether we can expect shoppers on Black Friday, at least at traditional volumes. This provides an opportunity for retailers like Macy’s to work on their e-commerce sites. Furthermore, they need to find more creative ways to make their e-comm work with their stores in a marketing and experience sense. Doing BOPIS, curb-side, etc is parity and expected; if retailers are still working that out, they are far behind. Like Stephen mentioned below, get creative, have fun, push some boundaries. Have more pointed marketing, tell visual stories online, help shoppers see a vision online. Especially for Macy’s, they really have nothing to lose.
Retail Industry Thought Leader
Macy’s is right to plan strategically for the upcoming holiday season. However, before we get to Black Friday and Christmas shopping, we need to first see unemployment rates progressively improve. Otherwise, consumer turn out this upcoming holiday season may not be as strong as past years. Even as economies start to open up, holiday spending may still be impacted by ongoing fears and uncertainty.
One strategy retailers can take, in addition to leveraging online sales and curbside pickup, is to ensure that this year’s holiday assortment is relevant (see trends in home activities, bikes, cooking, etc) and more affordable for consumers who want to enjoy the season, but may not be able to spend like they used to.
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Holiday shopping will likely reflect behaviors already becoming established in how the public reacts and behaves to the threat of COVID-19. The key demographic differentiator is age. Partygoers who are fearless about visiting bars, restaurants, and beaches will not have a second thought about in-store shopping, while older folks will likely rely on home and curbside delivery methods. Holiday and Christmas shopping could end up being the COVID-19 release valve of the decade for all shoppers. Experience the fun and festivity of the season via online shopping, from the safety of one’s home. While back at Macy’s, it will be interesting to learn of the tactics the retailer will implement to safely manage a young, unconcerned, robust crowd of in-store shoppers.
CFO, Weisner Steel
I’m baffled as to how curbside is a “big secret weapon” since it isn’t ANY of those three things (particularly as far as Macy’s is concerned; it operates in large spaces with curbside access that – while superior to in-line stores – is worse than standalone locations). And how is Santa going to be handled? (Or maybe Macy’s itself doesn’t do that anymore.)
At the risk of making Scrooge look upbeat, it’s hard to be optimistic about the holidays this year: large crowds could be a safety hazard, but the LACK of large crowds would be a financial hazard. Bah, humbug!
Retail Transformation Thought Leader, Advisor, & Strategist
Business Growth Coach, Founder & CEO of Ambrose Growth
As several commentators pointed out, this holiday season will be much more difficult to forecast than usual, because of the uncertainties linked to the pandemic. Combined with the fact that cash levels will be very low by the end of Q3, this will make this holiday season extremely risky, especially for small retailers. Some may be wise to limit their risks when it comes to costly Black Friday discounts, new customer acquisition, and potential excess inventory. This may be a good time to instead focus on their core, profitable customers — and potentially limit the inventory they will put on the shelves. The winner will not be the one that sells the most; it will be the one that preserves the most cash by the end of the pandemic.