Week in Review: Macy’s Downfall Sends an Omnichannel Message

Despite all the doom and gloom news that came out of Macy’s, Inc. on Jan. 6, chairman and CEO Terry Lundgren said its omnichannel investments are paying off.

In November and December, the company filled nearly 17 million online orders at macys.com and bloomingdales.com, a new record for the company and an increase of about 25% over last year, based on significant new fulfillment capacity, site functionality and aggressive digital marketing.

“We are buoyed by a very strong performance in our digital business, with continued double-digit increases in online sales,” Lundgren said. “This validates the strength of our omnichannel strategy and related investments which we made over the past decade and will continue into the future.”

That’s all well and good, but what percentage of Macy’s, Inc.’s sales are digital? Just how many customers are buying from macys.com and bloomingdales.com and having their purchased shipped to the store?

In a press release, Lundgren blames disappointing November and December sales on “the historically warm weather in northern climate zones where both Macy’s and Bloomingdale’s are especially well-represented,” and added that about 80% of the company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather apparel. And Lundgren also said Macy’s continued to feel the impact of lower spending by international tourists.

But Macy’s really has the same problem other omnichannel retailers are experiencing. They are sacrificing store-level salespeople at the expense of technology, and not finding a happy medium to make the omnichannel experience a positive one.

Walk into your local Macy’s store and do a headcount. How few sales associates do you see on the floor? How many customers can’t find a sales associate to help them? How many customers are trying to check out, but cannot find someone to ring them out? And how many sales associates are trying to work with more than one customer at a time?

Macy’s is not alone. The overall omnichannel experience seems to be great when making the purchase via desktop, smartphone or tablet, but fizzles at the store level.

Macy’s said it plans to adjust staffing levels at each Macy’s and Bloomingdale’s store in line with current sales volume to increase productivity and improve efficiency, and that an average of three to four positions will be affected in each of Macy’s and Bloomingdale’s stores.

Macy’s store employees are already overworked, thanks to staffing cuts it has made each of the past six years. Additional cuts to store personnel will only make the Macy’s customer experience deteriorate further.

– Intro by Tim Parry, Managing Editor of Multichannel Merchant.

Here’s a look at this weeks’ news, commentary and events that shaped the direct-to-customer world… and more.

Marketing

share-this-icon-75X75Sellers of Amazon reported more than 40% growth on Cyber Monday…Looking to improve your conversion rates, here are some of what big ecommerce retailers can teach you … A new year brings new strategies in email marketing retailers need to keep an eye on in 2016 … Think stores are going away, trumped at every turn by ecommerce? Think again….Are you winning the hearts, minds and business of your millennial shoppers?

Ecommerce

Add-To-Cart-Icon-75X75Blueport Commerce reported a 419% year-over-year increase in Boxing Day sales, surpassing Cyber Monday as the largest sales day to-date on the Blueport Platform…Here’s why JD.com will win ecommerce war in China…Walmart added MasterPass by Mastercard to online and mobile checkout… Bonobos plans to grow its store presence in Chicago this year…Luxury brands are dipping their toes into Chinese ecommerce markets… What do Amazon’s seller stats tell us? Absolutely nothing tangible, other than the total number of items sold, says ChannelAdvisor founder Scot Wingo… That is, unless you want to know useless trivia, like the fact that Amazon.com customers purchased more than enough 50-inch TVs to span the average width of the Grand Canyon. … Samsung Pay is expanding in the U.S. this year, challenging Apple Pay.

Operations

shipping-delivery-75X75A study by Retale shows that 64% of shoppers prefer to make holiday returns in store … UPS had a better on-time performance record than FedEx over the final week of the holiday rush, thanks to a policy that added a day to shipping transit times and a refusal to take on last-minute volume … Looking for ways to optimize your retail supply chain? Here are 5 tips to help you offset package shipping increases … Distribution data is your secret weapon to improve your shipping processes… SPS Commerce has acquired Canadian data analytics firm ToolBox Solutions… The European Union, after making noises about regulatory concerns last summer, has given unconditional approval to FedEx’s planned acquisition of TNT.

… And more

newsThe Finish Line said Sam Sato will succeed Glenn Lyon as its CEO… The move comes after The Finish Line announced a comp store sales drop of 5.8% for the quarter ended Nov. 28… Kenneth Frank was named CEO of the newly combined global commerce solutions company formed by Vista Equity Partners’s November acquisition and merger of retail software leaders MarketLive Inc. and Shopatron… Good E-Reader speculates that Barnes and Noble may escalate the number of planned store closures, since 442 store leases are up for renewal this April 30…Sally Beauty Holdings Inc., named Sharon M. Leite as president of Sally Beauty in the U.S. and Canada. … Macy’s said its comp sales were down significantly for the holiday season, and will slash 3,000 jobs across the board. But rival JCPenney was up for the second straight year… Macy’s also announced which of its 40 stores are closing or have already closed. … Make good on whispers from last month, Hudson’s Bay Company announced its plan to acquire flash sale company Gilt Groupe.

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