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Macy's multi-prong strategy targets boosting in-store, online experience

Despite lackluster earnings in the second quarter, the retailer is taking some big strides in next months to regain market footing.

August 20, 2015 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

Macy’s is aiming to revamp in time for the holiday season and get out of its "middle-of-the-road" market situation, reports an industry watcher, and much of what it’s working on is about boosting the customer experience to regain deeper footing in the ever-competitive apparel and houseware marketplace.

Macy’s is moving clearance out of main stores and replacing the merchandise with more "upscale" products and looking to hire smarter and more engaging sales staff to make shopping easier and more enjoyable for consumers. The clearance segment is reportedly going to fill a new outlet chain, writes Arie Shpanya, CEO of Wiser, a blog post at Econsultancy.

The revamp news comes just about a week after Macy’s adjusted its 2015 earnings guidance for the second quarter of 2015. Compared to a year ago the numbers aren’t great, with 64 cents per diluted share compared to 80 cents a year ago same quarter.

Sales dipped 2.6 percent, to $6.104 billion, compared to $6.267 billion a year ago. Given the weaker-than-expected sales Macy’s is stepping back on its yearly guidance regarding sales, stating it will be flat and not experience the earlier predicted 2-percent growth.

"We are disappointed in our second quarter results, which were impacted by a variety of factors, both internal to the company and in the macroeconomic environment. We expect an improvement in trend beginning in the second half of 2015 based on a range of promising new strategic initiatives, including those initially announced in January, which we believe will transform our company in the years ahead,” stated Terry J. Lundgren, Macy’s chairman and CEO, in a release.

Lundgren pointed to a slew of issues coming into play for the disappointing number such as withdrawing a big Friends & Family promotion event and markdowns that were delayed to merchandise delivery challenges.

"Moreover, throughout the first half of the year, overall consumer demand has been restrained in many of the categories of merchandise we sell, and the strong U.S. dollar has led to significantly lower international tourist spending,” Lundgren said.

But Macy’s clearly isn’t letting some lackluster earnings staff its retail strategy, which will feature a mix of omnichannel strategy and inventory placement. The retailer will be expanding markets for same-day delivery as well as its buy online, pick up in store options. It’s also piloting its first Macy’s "Backstage" off-private stores in New York starting in September.

And it’s not limiting the intended rebound to U.S. efforts. In its earnings report. Macy’s said will kick off ecommerce in China in late fall 2015, via a pilot with a partnership with Fund Retailing Limited.

That is happier news compared to the store closures that took place this year in Pennsylvania and New Jersey. While it will be closing a Los Angeles store, Macy’s is replacing that storefront with another at the same location and aiming to open a Macy’s in Ponce PR and a full Bloomingdale’s in Honolulu.

In the second quarter, Macy’s also opened three new Bluemercury locations and expects to open 10 additional Bluemercury freestanding specialty stores.

About Judy Mottl

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Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

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