Macy’s Goes Online In Stores

Discussion
Apr 13, 2012

Macy’s is on a hot streak online. According to a Reuters interview with CEO Terry Lundgren, Macy’s saw its e-commerce business grow 40 percent in 2011 and it expects to reach $2 billion (seven percent of its total) this year.

“It’s clear to me that the consumer likes shopping online,” Mr. Lundgren told Reuters. “I am focused on how do we make them feel as comfortable and ready to buy in our stores as they do online?”

Part of the way that Macy’s is looking to make its customers more comfortable is by bringing its online business into its stores. Last September, Macy’s announced it was implementing or testing a wide variety of technological applications to help it achieve its goals. Among the items on Macy’s list were:

  • Free Wi-Fi in stores
  • Digital receipts
  • Providing associates with tablets to assist in improving customer service
  • Live customer service chats on macys.com and bloomingdales.com
  • Online denim fit technology
  • Beauty Spot cosmetics kiosks

According to the Reuters report, Macy’s is looking to have 292 of its stores double as distribution centers for online orders by the end of 2012 so it can speed products to its customers more quickly.

It is also looking at a variety of kiosk applications, such as bringing an “endless aisle” offering into stores, expanding its Beauty Spot test, and installing “Nexus” kiosks to allow consumers to access product reviews, create shopping lists and share the Macy’s experience on social media sites.

Discussion Questions: What do you think are the most productive uses of online technologies in stores? Is there a particular retailer(s) that you think is the “Best Practices” model for this approach?

Join the Discussion!

23 Comments on "Macy’s Goes Online In Stores"

Notify of

Sort by:   newest | oldest | most voted
Dick Seesel
BrainTrust

All of the technology ideas being planned at Macy’s are worthwhile, but the best idea (championed by Target and Kohl’s among others) is the in-store kiosk allowing a customer to order online when something is out of stock. This prevents the shopper from walking out unhappy, as long as she is willing to wait for the item in question to show up at home or for store pickup. It also allows Macy’s and other retailers to satisfy customers of extended sizes (for example, larger shoe sizes) when it’s not practical to carry so many SKUs in the bricks-and-mortar store.

Unless I’m missing something, I don’t see the kiosk link to Macy’s e-commerce site on the list of ideas in development, and it ought to be moved to the front of the line.

Ed Rosenbaum
BrainTrust

Having the ability to order online when the store is out of an item is important. It opens a new way of shopping, plus saves time. No more going to another store when you can have it sent to you. Easier on the customer, and the store does not lose the sale. A win win for all.

Robert DiPietro
BrainTrust

Of course people like to shop online! I think these types of initiatives are critical to brick and mortar success. The customers know they are in the physical store and can see the inventory available but how do you unlock that ‘endless aisle’ and ensure that all the shopping needs are met?

Macy’s CEO didn’t mention the spending habits of customers who shop online, in-store or both and what trends are — big question — Does customer spending increase when shopping multichannel?

George Anderson
Staff

Macy’s is looking at an “endless aisle” concept that would allow consumers to purchase everything from its inventory even items it does not physically carry in stores. Its current capabilities also allow for associates to find an out-of-stock item and have it shipped directly to a customer from another store or distribution center.

Lisa Bradner
Guest
Lisa Bradner
5 years 6 months ago

I love what Macy’s is laying out here — particularly the notion of turning stores into DCs, the ability to seamlessly integrate online and offline, offer a breadth and depth of choices and make returns and shipping as simple as possible — all of these things will help bricks retailers compete successfully with Amazon. I am seeing this crop up; more and more retailers ask me, “do you want your receipt in the bag or shall I e-mail it to you?” I can’t point to a single best practices retailer (not going to invoke Apple here — too overplayed), but I like what I see starting to bubble up in numerous places.

Mike Osorio
Guest
Mike Osorio
5 years 6 months ago

Macy’s is doing exactly the right thing: consistently testing new, innovative approaches to engage the consumer who lives their life constantly online via their smartphones and tablets — an ever increasing demographic. One of the most obvious is free in-store Wi-Fi, which will quickly become a basic entry point for any retailer serious about competing. I also like their foray into crowdsourcing via Macy Star Advisors. They are definitely on the right track — constant testing of new innovations with rapid prototyping and strong funding for implementation.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
5 years 6 months ago

Things like digital receipts are a no-brainer but the two dimensions that will drive the really big payoffs are:

1) The ability to be personalized in real/near time with your customer at the critical moments of truth in-store and elsewhere. One size fits all is a dying strategy.

2) The ability to optimize inventory deployment in a way that drives operational efficiencies while lining up with customer expectations (what will be where, how will you shop for it and how will you receive it). Traditional store and online channel distribution strategies will not be competitive.

Ken Lonyai
BrainTrust
Full disclosure: I’m an interactive kiosk and mobile app consultant/producer. The “endless aisle” kiosk concept always sounds like a great idea, but it’s very flawed. It removes the customer from the shopping experience and presents them with something they can do more comfortably at home. Live customer chats don’t sound much better. There’s a lot that can be done effectively with interactive technologies that go way beyond the web as well, like interactive fragrance, but that’s another topic… My experience is that often, companies resist technology for a long time and when they finally commit to it, they use technology for technology’s sake. The key in retail is to use it wisely and be sure that consumers are the beneficiaries and avoid thinking it’s the magic bullet to increase sales, just because it’s there. Productive use of “online” technologies sounds like a lot of buzzwords that boil down mostly to mobile web — either via consumer app or consumer/employee tablet. It can also be harnessed as part of minimally invasive signage that integrates nicely with (and is not slapped onto) retail displays and fixtures. The right technology/application(s) will also have much to do with the retailer’s image, market, and consumer… Read more »
Carol Spieckerman
BrainTrust

It’s way too early to crown an online-to-in-store best practices winner. I’m just glad that retailers are finally getting started — and that a couple of department store dowagers are finally jumping in!

Gary Ostrager
Guest
Gary Ostrager
5 years 6 months ago

Providing the shopper the ability to engage through online applications like kiosks, in-store access to ecommerce platforms and interactive digital catalogs create consumer interest, greater store traffic and very positive brand reinforcement. Knowing the shopper will get what they want, when they want it is a huge difference maker when deciding upon where to shop.

Clearly, the most frustrating shopper experience is being told the merchandise you want to buy is not available. However, through new technologies and real-time inventory management, customers can relax knowing the product will be located, and shipped free of charge.

Jason Goldberg
BrainTrust

They are all great steps to break down the “Channel Silos” and help give Macy’s best experience at any touch-point the shopper chooses.

Clearly there are shopping missions that many shoppers prefer to conduct from their sofa at home via e-commerce. And there some shopping missions that shoppers prefer to conduct in-store.

But for both sets of missions, the shopper now needs (and expects) social proof, rich product information, customized recommendations, and much more. So Macy’s is wise to not only provide those shopping experience to at home shoppers (as many more siloed retailers do).

Roger Saunders
BrainTrust
Terry Lundgren is shrewdly expanding the online field for Macy’s customers. Good leadership that shows he is wise enough to know that the consumer is actually leading him. Each month, one of the questions that the BIGinsight Monthly Consumer Survey asks respondents is, “Over the next 90 days, do you plan on spending MORE, the SAME, or LESS than you would normally at this time of year shopping by the Internet?” In the March survey of over 8,500+ respondents, of the 1,000+ consumers from this survey who conduct some type of business with Macy’s, 24.2% say they will spend MORE, 59.0% will spend the SAME, and only 16.8% will spend LESS. Those figures compare to the General Population or MORE (19.7%), SAME (54.7%), LESS (25.5%). Lundgren is keeping Macy’s ahead of the competitive crowd by meeting his customers’ needs and expectations. When you have a customer base that indexes well above the general population in nearly all demographic areas, i.e. 108 for Higher Education, 169 for Household Income (average of $96,433), 121 for Homeowners, 188 for Professional / Managerial occupations, 40% having children under 18 in the household vs. 35% of the General Pop, you want to pay close attention… Read more »
gordon arnold
Guest

The greatest effect online shopping brings to the company is the appearance of new customers from a distance from the store that makes a physical visit impractical. This is a huge gain to the retail industry and any medium or small business having success on the NET will be able to demonstrate the true value of a website in real dollars. As for the “Endless Aisle” it is real, and alive in several retail businesses. User friendliness needs some work and often frustrates the people attempting to engage the applications successfully. I am certain these issues will be short lived with the amount of effort put being into software improvements and of course user experience. This is all good news. The better news is that this is only the beginning of some very great things happening to retail.

Gene Detroyer
BrainTrust
It seems that it wasn’t that long ago that I predicted the death of Macy’s along with the department store business model. And I should add that I hadn’t been impressed with Lundgren’s leadership. But, I was wrong about Lundgren and wrong about Macy’s. This strategy is what ALL brick and mortar retailers must do. Every brick & mortar retailer should be saying “It’s clear to me that the consumer likes shopping online…I am focused on how do we make them feel as comfortable and ready to buy in our stores as they do online?” The dynamics of this integration favors the customer and the retailer. Don’t have the size? Don’t have the color? Have the customer order it online in the store to have it at home the next day. Don’t give the customer a reason to leave without buying. Institute the “Miracle on 34th Street.” If the customer can get the same item online at less from another retailer, match it then and there. And all this can be done with fewer inventories, not more. Make the store the ultimate showroom and the delivery of goods to the customer the least costly and most efficient. Bravo to Terry… Read more »
Roberto Orci
Guest
Roberto Orci
5 years 6 months ago

Macy’s “omnichannel marketing” reflects a best-in-class approach to serving consumers on their terms. I am sitting at the Global Retailing Conference in Tucson listening to Terry Lundgren explain his vision of how Macy’s will interact with customers in the near future. It is impossible not to be in awe of how technology can raise the level of customer service.

Cathy Hotka
BrainTrust

Richard is right. Stores will want to install kiosks to allow customers to order online the merchandise they can’t find in the store. It’s a huge opportunity to recoup sales that retailers are losing right now.

Jim Koppenhaver
Guest
Jim Koppenhaver
5 years 6 months ago
I agree with Ken Lonyai’s assessment below; it’s very tempting to get caught up in the “buzz” of incorporating technology for technology’s sake. Looking at if from the consumer’s perspective, I don’t want tablets in the store for me to do an online order when the item I want is out of stock. I want the salesperson who’s helping me to both take the initiative and suggest that we order online and then have them actually use the in-store technology to do it for me! Similarly, I can’t figure out the angle of using stores as DCs for the online channel. Maybe I’m missing the storyline here. but if I’m in store and an item is out of stock and I order it online from the store, why would I go back to the store to pick it up? Just ship it home, problem solved. I do see the benefit if I order it online and I don’t want to wait for shipment that I can go get it same day in store, just not sure how much incidence of that we’ll see given that shipping has gotten so efficient and responsive (and convenient, don’t have to leave the house).… Read more »
Herb Sorensen
BrainTrust

This is the most outstanding example I have seen of effective Convergence of Online, Mobile and Bricks-and-mortar (COMB) retailing. This also effectively addresses the problem of “showrooming” that others are ineffectively grappling with. Talk about spitting in the wind! Macy’s, on the other hand, seems to be way ahead in finding out what shoppers want to do — it’s what they are doing, stupid — and help them to do it better and faster, and they will reward YOU!

Shoppers are at the cutting edge of converging online, mobile and bricks-and-mortar shopping. How long will it take for most retailers to respond to what shoppers have already responded to? And who will be the next to formulate detailed strategies to frustrate a trend that will not stop? Who will be the next to align with shoppers as Macy’s has done?

BTW, I first commented on COMB retailing here at RetailWire in August of 2010, and have made at least 20 comments on it since.

Joe Nassour
Guest
Joe Nassour
5 years 6 months ago

This is an obvious move for Macy’s to do. There is a fundamental shift in consumer requirements. Consumers can go to the Apple store and experience the new technologies. After they see the technology in action, they start to discount retailers that do not implement the new tech as laggards and the retailers that do implement as visionaries. That may affect the purchase behavior in the long run.

Craig Sundstrom
Guest

I think Mr. L is missing the point: you CAN’T make the in-store experience “as comfortable and ready to buy …as …online.” Rather, that’s exactly why you have an online presence. Indeed, most of the ideas presented here (Wi-Fi, digital receipts, tablets) are simply an upgrading of (in-store) technology; not a bad idea, of course, but really nothing to do with online. The analogy would be like saying that early 20th century stores that abandoned horse drawn wagons for motorized trucks were “entering the auto age.” No, they were simply upgrading their existing methods; the auto age meant a quantum shift: decentralization, closing of downtown stores and, perhaps, obsolescence of the whole business model … gee, it almost sounds like online does now.

Frank Riso
BrainTrust
Hats off to Macy’s! I think they and Terry get it. Given the next generation of computer savvy shoppers, they will quickly learn that their online site will have greater sales growth then their in-store sales growth. That is a lot of real estate and manpower for little or no sales growth in the stores. So finding all the right reasons to get people into a store is right on target (no pun intended) for Macy’s. If someone comes into the store to buy something shame on us we do not sell it to them from the store, from another store near-by, or online. Kiosks, tablets, mobile computers and displays are just the tip of the iceberg when it comes to using technology in store to enhance the shopping experience. We may even see companies like Macy’s offering a better price in-store over the online price of certain items to get us back in the store. I would love to see each cashier ask if we found everything we wanted and everything we exactly wanted when we go to checkout. If we say no or not exactly, they should be trained to convert their POS system to the online site… Read more »
Lauren Burbridge
Guest
Lauren Burbridge
5 years 6 months ago

Macy’s could go a step further. The kiosks allowing consumers to access product reviews will be a particularly effective method to increase conversion in store. However, I do think if they used ‘Tickets that Sell’ including product reviews and information at the shelf edge, it would lead to an easier experience for customers and quicker decision making process.

Christopher Krywulak
Guest
Christopher Krywulak
5 years 5 months ago

I’m surprised to see that only two people mentioned Apple stores in their comments for this article. Perhaps it is just assumed at this point, but truly, if there’s a best practices model for bringing online technology into the store, it’s Apple. I still remember being wowed by having my receipt emailed to me as I completed the purchase in store and this was a couple years ago.

The key here is that Macy’s understands (as Apple did long ago) the merging of channels — customers want a consistent and convenient shopping experience, whether it’s in-store, online or on mobile devices. The most productive uses of online technologies in-store are the ones that deliver consistent product/pricing/inventory information and enable convenient checkout/pickup.

wpDiscuz

Take Our Instant Poll

How important from a competitive perspective is it that retailers bring the online experience into stores?

View Results

Loading ... Loading ...