Photo: RetailWire
Is a self-service model Macy’s ticket to success?
Back in March, RetailWire reported on steps Macy’s was taking to get its business turned around. One step was to put greater emphasis on self-service in stores, including in departments such as beauty and shoes where associates have traditionally been actively involved in assisting customers. As it turns out, self-service pilots in shoe departments have proven so successful, Macy’s is rolling out the concept — to one degree or another — in all its stores.
Karen Houget, Macy’s CFO, told analysts earlier this month that self-service pilot stores “produced a nearly double-digit shoe sales increase in the first quarter, well above the shoe sales trend for the rest of the stores.”
The rollout of self-service shoe departments, which began May 1, is expected to be completed by the end of July. To make the model work, Macy’s has reconfigured departments to move stock, previously held in the backroom for associates to retrieve, to the store floor where customers can search for themselves.
Macy’s Jeff Gennette, speaking on the earnings call, said shoes are “a real passion category for our customer.” He added that Macy’s needed to do something, as the chain continued to lose share over the past two years.
In its pilot tests, Macy’s focused on getting its product selection right. Having achieved its goal, Macy’s then turned to the shopping experience.
“We really looked at the amount of management we needed, what the back of house had to be. What the amount of sales associates [should be], what their commission rates would look like, to give them the incentive to work with our customers. And then we really looked at that overall model that would say, how much of this could be self-serve, how much of this could be … needs to be high touch,” said Mr. Gennette (via Seeking Alpha).
Discussion Questions
DISCUSSION QUESTIONS: How do you account for Macy’s reportedly improved sales performance in self-service shoe departments compared to those employing a service model? Do you think Macy’s is correct in putting a greater emphasis on customer self-service in its stores?
Poll
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Ken Lonyai
Consultant, Strategist, Tech Innovator, UX Evangelist
Macy’s needs to run a longer test on the self-service shoe department. The bump in sales could be an innovation effect (customer are drawn to the fact that this is a new way to do things). Alternatively it could be that customers getting the right shoes faster and using their own abilities is the answer.
It’s great that Macy’s is testing self-service. The only way to truly find out is to continually run tests, challenge old paradigms and neutrally observe what works and what does not. What is most important is that they are watching for what needs high-touch service and where self-serve is the champion — kind of like the omnichannel strategy.
In many ways I think Macy’s has lost their vision of who they are and who they wish to be. Macy’s was once the department store leader but has now become the department store chaser. Are they Kohl’s? Are they J.C. Penney? Are they something else?
There are many self-service stores and I don’t think Macy’s is wise to become one. They may see some short-term success of self-service shoes but is it because there are no associates involved or is it the product mix they now have? The whole point of going to a store is to see, feel and touch the product and when needed get assistance. The more we take away the “service” piece, the more we’ll find reasons not to shop at department stores. Maybe if the top executives focused less on their high salaries and bonuses and focused more on renovating their old stores and adding well-trained associates, Macy’s would see a stronger increase in sales across the board and they wouldn’t be looking at self-service departments.
Part of the gain has to be from not having to wait for a salesperson to help you find the correct style and size. Doing it yourself gets you the item faster and before you decide to not buy it, which makes sales increase. I do think Macy’s needs to put more emphasis on customer self-service for this reason. Not many customers need the service or help to buy most items in the store as long as the inventory is complete and on the salesfloor. The question is, what took them so long to figure this out?
It may be that Macy’s simply removed a critical friction point in the shoe selling process. Think about it. As a former shoe salesman in a department store (which I did while in college 100 years ago), shoppers would select a shoe they were interested in and I would run to the back room to find the size. While I was running shoes for one customer, many others would wait until someone could serve them. Many shoppers would simply leave if they didn’t have time to wait and we could never hire enough sales people to serve all the shoppers. With self-service, this significant friction point is removed. Shoppers can select shoes, try them on, changes sizes, etc. and then purchase. DSW has been very successful with this model and it shouldn’t be surprising that it’s performing well at Macy’s.
Mark, I agree with you and am surprised by all the negativity toward Macy’s on this announcement. Macy’s is clearly not a high-end luxury department store like Nordstrom (which also has elements of self-service for stores) or Neiman Marcus. I do not believe they are confused on their identity. And regardless, we are seeing very real signs that the department store of the past is no longer a viable business model, so it is incumbent upon Macy’s to rapidly test new operating models and roll out to their stores. Better in this retail environment to fail fast — then they can at least say they tried to do something different.
The shoe buying experience of the past is exactly that. Speaking from a millennial point of view, it is antiquated, slow and full of friction. In fact, shoes (for some reason unbeknownst to me) are the only apparel department that I can think of where you cannot simply go into a store, try some on that you like and walk out with that item. Isn’t that the whole point of a retail store? Immediate gratification with no shipping time … if there happens to be a friendly associate there to help me deal with uncertainty or provide a more personal experience, more power to them, but it is not what I am looking for.
It seems to me that Macy’s is moving in the right direction to cater to their customers and convert more of them that tend to be pressed for time.
Macy’s has the price point where self-service makes sense. It’s really about the customer service expectation. Macy’s is not Saks Fifth Avenue. Self-service, done right, is an easy way to buy. The shoe department is a good place to do it. Macy’s just needs to make sure that when a customer does need help, there is someone there to do so.
Considering the dip in customer service from Macy’s over the past decade, it’s the right move to automate the process. Hopefully this will enable the company to hire, train and retain a dedicated human staff who effectively interact with customers. Better self-service than bad service.
The shoe department has always been a frustrating place and can have a high exit rate due to the frustration. Letting the customer find their own shoes keeps them in the store instead of getting impatient and leaving and it gets them involved in the “hunt.” Macy’s is also being very smart in looking more closely at which areas need to be high-touch. Providing the best experience is what it needs to be all about. Macy’s has shown itself as smart when it comes to serving their customers beginning with item-level RFID and delivering from the store, for example. But the bigger issue hanging over them is, are department stores still relevant, who are their customers and what does this customer want? When they can get that worked out, Macy’s is operationally ready to serve.
For my 2 cents
“Self-service?” Hasn’t Macy’s been self-service for years?
That being said, the real question is, is this a Band-Aid or a first step in a new business model?
What this reinforces is the need for all retailers to embrace innovation and then to test and implement, always keeping an eye on how it affects the business and the customer experience. Self-service will surely work in some departments and others will need higher-touch. Beyond the product there is a level of service expectation that Macy’s needs to maintain if they are to keep their slot in the department store sector.
Yes. Self-service is clearly a viable option for Macy’s and other stores which should be considered as a makeover of their models. There are clearly many other issues which Macy’s needs to turn around in order to survive, and perhaps not even as a department store as we know it. Adapt or perish is the phrase for the department store model, and this should be Macy’s reminder every day.
In this case, self-service addressed an immediate bottleneck in the process and did generate improved sales. There is nothing more frustrating than making the decision on which shoe style and color you want to buy and then waiting in a queue for the salesperson to check for your size in the backroom. Either increase the number of sales associates in the shoe department or give your customers access to your physical shoe inventory. The traditional value of a shoe salesman went out decades ago unless you are in the high-end shoe business — then the human element is invaluable.
Macy’s image and branding remain in flux. Whatever they do with their shoe department needs to support their brand image and pricing strategy over the long term. There are other opportunities that meld online and offline that Macy’s can explore around selling shoes. Don’t let the current process limit what’s possible.
I agree with the cautious thinking of my colleagues here. While it all sounds great, this is a short-term test of what has been a break-point in the Macy’s shopping experience for as long as I’ve gone there, particularly in the women’s shoe department. The fact that an abominable experience saw an immediate and substantial jump in sales when altered says more about how non-customer-centric the experience has been in the past than where it’s going in the future.
Macy’s was never a Sears type of store. Rather, it was a mildly upper-class department store where shopping felt a bit more special than shopping at most competitors. This approach will clearly move Macy’s identity to that of yet another vanilla chain, which is unlikely to result in a bright future for them — great test results or not.
It’s hard to tell whether the reconfigured shoe department is meant to be a sales driver or an expense saver. J.C. Penney recently reconfigured a store that I visited to get its shoe inventory out on the floor — DSW-style — instead of depending on salepeople to find the right size in the back. (And these associates are often paid a commission, just like cosmetics salespeople.) But it gets to the heart of what Macy’s wants to be. As Art put it, are they trying to be J.C. Penney or Kohl’s? Are they finding the hidden costs of “omnichannel” (BOPIS and so forth) to be unsustainable for a traditional department store?
And one more issue: By abandoning the Nordstrom model (where the salesperson is trained to bring out three pairs of shoes when the customer asks to look at one), Macy’s may in the long run walk away from the sales and margin potential of “upselling” that shoe and cosmetics departments should be known for. A declaration of victory may be premature.
This is almost embarrassing. When you see how efficiently a Nike store can use technology to provide genuine customer service, the notion of self-service in Macy’s is yet another prescription for failure.
Why would you schlep to Macy’s to self-serve when you could do the same, for less money and hassle, at a DSW or Famous Footwear?
Bad move.
… or you could self-serve by schlepping to your computer and doing Zappos.
While short-term testing may show improved sales in the shoe department from self-service, this feels more like Macy’s rationalizing a common complaint they’ve gotten from their customers for years — not getting the service they want from the associates on the floor. This symptom of poor service has set a low baseline for comparison. As others here have commented, Macy’s has removed a sore point of friction in the shoe buying process so naturally this is reflected in a substantial sales increases simply because customers had to wait too long to get the shoes they wanted.
The larger questions Macy’s need to ask themselves are about defining their identity. Are they a service-based department store that wants to be another Nordstrom, or are they headed down-line to becoming another bland department store that has product after product but isn’t based on great service? Or will they be something different? Self-service shoes seems to be leading them down the discount store path and away from their past as an upscale department store. A telling moment would be if they adapt this self-service model at their flagship Herald Square store.
Macy’s needs to decide who they are and what they need to become to get the customers to want to come back. Sadly, they are joining J.C. Penney in a failing area of retail. Self-service in shoes might work if they have learned from places doing it successfully such as DSW. Macy’s and other big box retailers already seem to be using the self-service model. The only people working on the salesfloor seem to be the cashiers.
Retailers must redesign the experience around the customer to reduce friction and enable shoppers to interact in their preferred method. With this in mind, I can’t think of a better department to start with. Rather than forcing shoppers to wait for an associate to disappear into the backroom for an eternity to bring out two or three pairs of shoes, they can now quickly find and try different shoes on. Due to the increased efficiency, shoppers will now be able to try multiple pairs at a time drastically enhancing their experience.
For this concept to work, Macy’s must ensure that the department maintains the pristine order shoppers expect from Macy’s (rather than a picked-over TJX) and they must continue to staff the floor with trained associates to help those customer that need assistance.
As Macy’s and other retailers consider these moves, it’s imperative to revisit customer experience fundamentals. What is the optimal engagement model for each department and segment? While some shoppers prefer self-service, others want a more premium experience and associates must be there to quickly assist them. What role does technology play in assisting these shoppers to drive conversion rather than showrooming behaviors? And finally elements including shrink, store design and stocking must be addressed by this new format. High velocity turning shoes and sizes must constantly be replenished to ensure they’re on the floor because many self-service customers will simply move on rather than engaging an associate to determine if the shoes are in the backroom. It is possible to provide a premium self-service model but the experience must be flawless to succeed.
“Picked-over TJX” unfortunately describes the Macy’s experience all too frequently. In the menswear department at my local Rosedale (Twin Cities) store, there is usually only one associate at the register with two or three customers in line; shirts and accessories are in haphazard heaps and inventory is not regularly replenished. Regardless of time of day, day of week, or season.
If they can’t keep 17″-34/35″ standard-fit shirts of basic colors in stock, which must have a totally predictable demand pattern, then I don’t see how putting shoes with their more-differentiated sizing and styling out for self-service is going to keep shoppers consistently happy. The thrill of the hunt only works when you can catch something….
Removing friction can also be handled by upping the service provided and giving the customer an experience that they will enjoy and pay to experience. Nordstrom is a perfect example. Their crowded shoe departments are staffed with knowledgeable sales people who bring not just the shoe you asked for, but other options as well.
I agree that waiting for shoes to be brought out by a shoe salesperson, especially on a busy day, can be a chore. But digging through stacks of shoes that have been riffled through by others and haphazardly returned to the stack is no picnic either. If I’m going to get in the trenches and serve myself, I want to be rewarded with discounts.
Macy’s continues their identity crisis and dive into the discounter pool, which I believe, will be their ultimate demise.
You mean it’s not now? My latest ventures into their stores would indicate it already is.
“Some people desire self-service, others have it thrust upon them.” Who said that? No matter….
As has been discussed here often, for all intents and purposes, Macy’s became self-service, or virtually so, in all but name, long ago. But there’s a difference between self-service by design (carefully arranged and properly signed) and self-service by default (a full service setup un/understaffed). If these shoe departments really are outperforming, I suspect it’s because Macy’s has acknowledged reality and moved from the former to the latter.
Is this a solution to their many problems? No. Is it a good idea? We’ll find out.
I think targeting the shoe department was a smart move from Macy’s. They clearly identified that it was an area with problems and the results suggest that offering self-service has helped to alleviate some of those (the running back and forth to and from the stock room, the associated wait, etc.). I think all uses of self-service need to be considered on that same basis — what problems does this solve? The balance is that hopefully Macy’s is now able to redeploy some staff from the shoe department to help customers elsewhere.