September 16, 2014
Macy’s touts its omni-channel progress
Macy’s, Inc., parent company of Bloomingdale’s and Macy’s, wants all its stakeholders to know that it’s not resting on its digital laurels. In an announcement yesterday, the company outlined a wide variety of initiatives the company’s management believes will set it apart from the competition.
"Our goal remains to help our customers shop whenever, wherever and however they prefer, and to use the entire inventory of the company to satisfy demand," said Terry Lundgren, Macy’s, Inc. chairman and chief executive officer, in a statement. "We are a multi-faceted retailer with stores, technology, internet capability and mobile access that come together for our customers. They are at the center of all our decisions, and our ongoing research and development will continue to help us understand how to personally engage with them."
Among the advancements Mr. Lundgren and company are touting are:
Macy’s participation in Apple Pay: The department store operator said it would launch Apple Pay in October. The goal of the program is to offer a simpler checkout process.
A same-day delivery test pilot: Macy’s and Bloomingdale’s are both planning to test same-day deliveries with Deliv, a crowdsourced service. Eight markets have been chosen for pilots: Chicago, Houston, Los Angeles, New Jersey, San Francisco, San Jose, Seattle and Washington, D.C.
The company-wide rollout of buy online, pickup in store: BOPIS is now available in all Macy’s and Bloomingdale’s locations. The company first began testing the concept in the fall of last year.
In-store technology, including mobile POS devices: Macy’s is testing new mobile POS technology in stores in Georgia and New Jersey. According to the retailer’s announcement, "These include a new generation of enhanced handheld point-of-sale devices and tablets designed to improve the in-store shopping experience by enabling sales associates to engage customers more effectively, offer merchandise ideas and product information and speed transactions."
Online image search: Macy’s Image Search app enables shoppers to submit a photo from anywhere and find similar items on macys.com. The app is currently available for iPhone only.
Own-brand mobile wallets: Macy’s and Bloomingdale’s have introduced mobile wallets to help customers store and access special offers and coupons. The wallet is said to work seamlessly with the chain’s rewards programs regardless of where they are shopping.
An expansion of RFID: The chain’s are deepening their commitment to radio frequency identification technology, which Macy’s Inc. first began testing in 2011. The company plans to expand the use of the tracking technology to more fashion categories next year.
The deployment of iBeacon technology in concert with shopkick: Macy’s will have the largest deployment of Apple’s iBeacon technology of any retailer when it rolls out more than 4,000 shopBeacons from shopkick.
Smart fitting room technology: Bloomingdale’s has added smart fitting rooms to five of its stores around the country. The technology makes it possible for customers to find other colors and sizes available in items they like as well as obtain product information, product ratings/reviews and recommendations on complementary items. Customers can also press a button to receive assistance without having to leave the fitting room.
Discussion Questions
How does Macy’s, Inc. compare to other retailers when it comes to progress on the omni-channel front? Which of the areas the company is pursuing offers the greatest opportunity for improved performance in the years ahead?
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Macy’s Inc. is simply head-and-shoulders above the rest in the U.S. In Macy’s case, the whole is greater than the sum of the parts.
Macy’s totally understands that omni-channel is all about the total consumer experience, the way they want to shop, where they want to shop. That said, Macy’s Inc. has more of the innovation components executed or in process than any other retailer. They are a leader in BOPIS, in store targeting, use of beacon technology, and mobility in and outside of their stores.
The bottom line is Macy’s consumer-centric approach. Instead of banning Apple Pay like Walmart and Best Buy, Macy’s is participating so that the consumers can decide what they prefer.
In Macy’s category, it’s not about making a sale today, it’s about lifetime value and loyal core consumers. Their app and the new image search capability are great examples of opportunities and how Macy’s Inc. continues to execute consumer-centricity as a core differentiator.
Wow, I was all ready to write about this but you’ve summed it up fabulously.
This is what retail winners do. Instead of bemoaning the competition they move forward. Great job all the way around! Certainly better than writing letters to the vendor community demanding they help “stop showrooming.”
Macy’s run may not go on forever, but right now, it’s an impressive example for other retailers.
Macy’s is head-and-shoulders above most retailers when it comes to omni-channel and using technology to improve the customer experience and its sales prove it. From smart fitting rooms to digital wallets, Macy’s makes it easy for consumers to shop, find what they want, take advantage of special offers and check out. Few retailers measure up.
Smart fitting rooms and electronic wallets, either their own or others, offer the best opportunity to improve performance. I suggest adding a social component to further enhance the consumer experience.
Macy’s is a leader with regards to enabling its omni-channel capabilities. The roll out of RFID, BOPIS and iBeacons are the areas I see as having the greatest value for Macy’s, but I also don’t have deep visibility into their operations. RFID will help them better track inventory in store, which is critical for BOPIS, and the iBeacons will help them better engage customers in-store.
The buying decision is made at try-on in the fitting room, so the smart fitting room technology that Bloomindale’s is piloting is a move in the right direction. My only caution would be to keep the experience well-edited so that the customer isn’t spending a lot of time isolated inside the fitting room surfing.
Customers visit stores to engage with the brands, people and product, and while the internet can enhance the experience, it ultimately needs to promote engagement with associates, not replace them.
Another issue that is never talked about is the impact these internet-based experiences will have on the fitting room process. Fitting rooms are a game of seconds and dynamic strategies must be created and employed, depending upon the velocity of fitting room traffic at any given moment.
Lines are a fitting room experience and productivity killer. Even edited access to the internet can slow the process down, adding friction to an already painful process for customers and triggering costly walk-offs.
What I do like are the technologies like the one described, implemented outside the fitting room or on the sales floor. These experiences serve to encourage the try-on and move the customer to the fitting room without compromising the fitting room process.
Bottom line: Employ the internet inside the fitting room with caution!
Lots of cool initiatives at Macy’s but still a long way to go in integrating them into a seamless customer experience. Need to get Apple Pay working with their own digital wallet, ShopKick beacons working in their own mobile app, their mobile app working with their digital dressing rooms, etc.
One thing Macy’s has that sets them in the lead is total support from the top down. Terry got behind the total omni-channel program many years ago to support their M.O.M. strategy—My Macy’s localization, Omni-channel integration and Magic selling customer engagement.
As Terry stated in their recent annual report, “We continue to refine and improve the My Macy’s process for localizing merchandise assortments by store location. We have re-doubled our emphasis on precision in merchandise size, fit, fabric weight, style and color preferences by store, market and climate zone.
In addition, we are better understanding and serving the specific needs of multicultural consumers who represent an increasingly large proportion of our customers.”
Driving this common strategy across stores and online is what will continue to drive their strong performance.
Without a common, agreed and exciting strategy, retail omni-channel is not very doable. Without a strategy it becomes “omni-confusion.”
While Macy’s has a challenge making their customers aware of all of these initiatives, it’s a high-grade problem to have. Their competitors are talking the talk about localized assortments, BOPIS and so forth while Macy’s is walking the walk. Assuming they get the merchandise content right, these are sales drivers for years to come.
In terms of DRI (digital retail integration), Macy’s has always been ahead of the curve. Thanks in large part to their leadership committing to it early and often and a PR machine that just won’t stop.
However—the stores are still tired and cluttered, the employees sub-par and the merchandise is just okay. To use a sports metaphor: they have a great passing game but forgot about blocking and tackling. I’d really like to see Macy’s double down and fix the fundamentals first, but that’s probably not as newsworthy as DRI, and a LOT harder to do. Here’s to the long term!
If you want to know how to do omnichannel? Macy’s is the place to go. Oh, but they didn’t stop there!
They are smart enough to know that it’s more about the channels a customers buys in. The customer must also have a great experience. The addition of dressing room convenience, have image search. Top moves along the path to purchase that gets the customer to yes, faster. And, believe me, it couldn’t have been done without RFID!
Kudos to Terry Lundgren for knowing what is important!
And that’s my 2 cents!
Just goes to show that you can’t take half measures in technology if you want to really outdo the competition and satisfy customers. I bet Macy’s had to throw away the “ROI” worksheets on some of these initiatives and just go for a total and compelling customer experience. Based on the reaction on this forum, totally worthwhile.
Macy’s is ahead of its peers in terms of the investment, innovations and even risks it is taking to be where its shoppers go. By incorporating the ability for shoppers to order a specific product in a select size and color, at the store, online or by phone, it has removed many barriers to sale. Now, by offering same-day delivery, it has removed a lot of the remaining barriers, and it has upped the ante for others.
Further, Macy’s early embrace of new technologies, from iBeacon to Apple Pay, indicates that company executives are inside players with many innovators, giving Macy’s a leg up on tomorrow’s trends.
This feels like Macy’s taking its traditional place as a merchandising leader. The Cellar, The Flower Show, Thanksgiving Day Parade, those wooden escalators: all examples, and comparatively easier to get right. As a graduate of the training program, I have a sense of pride that Macy’s is seemingly finding its 21st century mojo.
I agree with Lee, Chris and Jason that these experiments need to be pulled together, along with the in-store and actual merchandise experience, on behalf of their customers.
The magic, if you will, is in the data that comes from all of this. When synthesized and leveraged, who knows what will come of it? Hopefully better merch, better store environments and whatever we, as customers, define as better.
Fundamentals come and go, but it is and always will be about moving the merchandise.
Can’t wait to see what they do with it.
Middle of the pack. Buy online pay in store…most merchants already have this in some form. Testing mobile devices in store…old news. Same day delivery…Amazon has had this offered already. Macy’s needs to look instead at its basics and polish these. Out-of-stocks continue to be an issue for this retailer, and managing the drain on earnings that these lost opportunities demand will only continue to be an issue.