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Well played Macy´s – Omnichannel success

19 December 2013
The US-Retailer Macy´s recently announced a test phase for a new technology in two of their stores. The stores in Union Square in San Francisco and Herald Square in New York City will be equipped with so-called ShopBeacons to enhance the customers shopping experience.

ShopBeacon is a product of Shopkick Inc. It uses a small Bluetooth-Low-Energy transmitter that runs Apple´s iBeacon-technology. Together with the Shopkick App shoppers will be welcomed when they enter the store and receive location specific deals, discounts and special offers.

While Macy´s is not the first one to make commercial use of this technology, it is the the first major retail deployment, coming even before Apple (which also announced to upgrade their stores with BluetoothBeacons).

So why is this interesting?

Isn´t this just some new tech gimmick designed from marketing dreams? Well partially it is, but first and foremost it is the next move in Macy´s extraordinary omnichannel strategy.

Let´s take a closer look at Macy´s and its origins. Founded in 1858 by Rowland Hussey Macy in New York the department store chain now has a history of more than a century of classic Brick&Mortar business. Evolving from a local store to a regional chain to a national brand the owning corporation Macy´s Inc. had a total revenue of 27 billion USD in 2012
(4,9 % growth) with a profit of 1,3 billion USD (6,3 % growth).

Talking of Brick&Mortar you might think that the E-Commerce boom of the recent years would have been a death knell for Macy´s. But quite the opposite happened. Macy´s reinvented their own business model and is now one of the most prominent and successful supporters of the „Omnichannel“ in retail. In very simple terms their omnichannel strategy consists of aligning the in-store and online product assortments. While this doesn´t sound complicated  and doesn´t seem like much it is the major component and serves two purposes: First, it gives the customer who has finished it´s online research the opportunity to not only take a look at the product but „feel“ it in the local store.

Second, the complementary online/offline assortments offer the possibility for the customer to order  an item online when he can´t find the right size or color in the store (with the additional benefit of smaller stocks in store).

For 2012 Macy´s reported a massive growth of 40% in online sales, for 2013 they deliberately haven´t reported any separate numbers for online sales. As the boundaries between online and offline sales are blurred the distinction is not meaningful anymore. So the constant struggle to distinguish between online and offline to see „how good the E-Commerce is doing“  is gone for Macy´s. Well played!

 

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