Macy’s Continues to See Results from Omnichannel

Macy’s is continuing to see in-store sales driven by its online channel at both its Macy’s and Bloomingdales stores, the company told analysts and investors in a Q2 earnings call.

“The Internet-generated demand continues to grow rapidly and we believe that will continue, particularly now that we have rolled out buy online/pickup in store, which some people refer to as click and collect, to all the Macy’s and Bloomingdales stores,” said Karen Hoguet, Macy’s Chief Financial Officer.

Hoguet said this demand is happening even though the company has yet to market its click and collect capability, adding it’s leading to additional sales once people are in the door.

“We are already finding that many customers like this option,” she said. “Once in the store, these customers are often buying other items as well. It’s really premature to provide color on how it’s being used by customers or how big it could become, but hopefully as the fall season moves on, we will understand better how it’s being used and its potential.”

The company is optimistic that its various omnichannel initiatives, which it is funding out of its $1 billion plus capital expenditure budget, will help drive increased sales in the upcoming holiday season. “Omnichannel strategies are clearly enabling us to accelerate growth and we are just at the early stages of exploring all the opportunities,” Hoguet said.

Macy’s will continue to invest in things like balancing and integrating its online and in-store strategies and systems, as well as its distribution centers, like a new one being built in Tulsa, OK.

“We have store technology which we are testing like crazy, and we will continue to test and roll out things that work,” Hoguet said. “I think you should assume that omnichannel and technology investments are going to be an ongoing part of both our capital budget and also our expenses.”

While omnichannel is primarily a sales driver for Macy’s, Hoguet said it is also leading to gross margin opportunities through better coordination of inventory and marketing across channels. “So I actually see it as a huge opportunity across the whole P&L and balance sheet,” she said.