Macy’s Stores Counter Amazon’s Logistics Edge
Macy’s Inc. is doing a lot right these days. Same-store sales at the operator of Macy’s and Bloomingdale’s were up 4.4 percent in the first quarter of 2012 versus last year. Online sales, which added 1.5 percent to the same-store number, were up 33.7 percent for the period.
The company has acknowledged that online is vital to its success and has made substantial efforts in the past couple of years to integrate that part of its business with its traditional brick and mortar operations.
One area where Macy’s is picking up the pace is fulfillment where it has begun using stores as distribution centers to speed the delivery of online purchases to customers.
"We’ve spent the last 153 years building warehouses," Peter Sachse, Macy’s chief stores officer, told The Wall Street Journal. "We just called them stores."
Macy’s has expanded storerooms and upgraded technology at 80 locations to help stores handle fulfillment. Plans call for 292 locations to handle online fulfillment by the holiday selling season.
"We think the sales potential from this omnichannel approach is enormous," Karen Hoguet, Macy’s chief financial officer, told analysts, according to the Journal of Commerce. "In addition, over time, it should enable us to also improve the productivity of our inventory, as well as our store square footage. We have barely scratched the surface here, and we are very optimistic about the possibilities."
- Macy’s, Inc. Reports First Quarter Earnings of 43 Cents Per Diluted Share, a 43% Increase – Macy’s, Inc.
- Macy’s Regroups in Warehouse Wars – The Wall Street Journal
- Macy’s Stores to Dispatch Online Orders – Journal of Commerce
Discussion Questions: Will the use of store locations to fulfill online orders close any perceived customer service gap between brick and mortar retailers such as Macy’s and Amazon.com? What do you see as the challenges and opportunities for merchants who handle online order fulfillment in store locations?