Ship-from-store Helps Macy’s Compete With Pure-plays

Jan 16, 2013 10:15 AM  By

Back in the fall, Macy’s spokesman Jim Sluzewski told Multichannel Merchant that his company would consider further expansion of its ship-from-store initiatives after it evaluates its 2012 holiday sales figures.

And based on the excitement in Macy’s president and CEO Terry Lundgren’s voice Monday, the merchant will expand its ship-from-store initiative, which was expanded to more than 290 stores before the holiday season began.

In fact, in speaking with Multichannel Merchant during an off-site event held in conjunction with the National Retail Federation Big Show in New York, Lundgren made it clear Macy’s will roll ship-from-store out to all its department stores.

“I now have something the pure plays don’t have – I have 800 fulfillment centers,” Lundgren said. “Even though they are called department stores, I can also look at them as fulfillment centers. I can satisfy any need for any customer in any city.”

Macy’s Inc. saw its December sales grow just 3.6%, its season was saved by its ecommerce growth. Online sales for macys.com and bloomingdales.com combined were up 51.7% in December and 40.4% in 2012 year-to-date compared with the same periods in 2011.

But with the transparency of ship-from-store during the online transaction (the customer does not know where the shipment is coming from), ship-from-store is not a sales-driver. However, it does help its bottom line in several ways.

First, Lundgren said the technology Macy’s uses to determine whether to ship product from a store or a distribution center.

“Is it cheaper to send a product from the west coast to the east coast and pay the freight, because I’m going to save on a potential markdown because I have too much of that fashion inventory on the west coast?,” Lundgren said.

Though Macy’s has added back-room employees in the ship-from-store locations to handle the initiative, Lundgren said the technology also ensures those workers are not overwhelmed with shipments. If too many shipments are being assigned to Store A, for example, the software will search for another store to fulfill the transaction.

According to its 2011 annual report, Macy’s Inc. has 20 distribution centers, 15 of which are company-owned. Four of those distribution centers are dedicated to its ecommerce business.

“I always scare my fulfillment center guys because I tell them we don’t have to build any more fulfillment centers,” Lundgren said. “I tell them I have 800 now.”