Macy's Looks To Expand Omni-Channel Fulfillment Initiatives
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
After a strong fourth quarter, company plans to roll out its BOPS program and explore same-day delivery
Macy’s had another strong quarter, reporting comparable sales and earnings growth for its fourth quarter ended February 1. Comparable sales grew by 1.4 percent and earnings grew by 13 percent throughout the quarter. Sales hit $9.2 billion, which was a slight (1.6 percent) decrease from 2012 when sales equaled $9.3 billion. For the full year, sales increased by 0.9 percent, reaching roughly 28 billion. This was the company’s fifth consecutive year of double-digit growth in earnings and the fourth consecutive year of comparable sales growth.
Macy’s doesn’t expect this growth to stop anytime soon, especially because of its continued investments in its Macy’s Localization, Omni-channel Integration, and Magic Selling (M.O.M) strategies. As CEO Terry Lundgren says, “Customers are able to shop for and buy the products that they want and prefer in our stores, via mobile devices and on computers in a shopping environment that delivers outstanding value and is supported with great service. Our M.O.M strategy is enabled by a unique organizational structure, which is unlikely to be copied by our competitors because of the financial resources and talent required. We have been developing M.O.M for years, and it is an enduring formula that we believe continues to hold significant promise for the future.”
The company is also setting its sights on making improvements to its omni-channel strategies, in particular its buy online, pick up in-store (BOPS) and same day delivery fulfillment initiatives. According to Karen M. Hoguet, Macy’s CFO, the company’s test of the BOPS program last fall was a success and is expected to be rolled out in all stores this spring. Hoguet says “One of the things that has us excited about the BOPS test is that it’s going to help us really lay this foundation for same-day delivery, because we have the capability now of knowing exactly if that inventory that a customer is ordering is in a specific store. And if that inventory is in a market, obviously it’s easier to get to the customer on the same day.” The company hasn’t said exactly how it plans to implement the tests for same-day delivery, which it will most likely be testing in a few different locations this year.
Overall, the company feels omni-channel is a key factor in the company’s growth. Hoguet says that the collaboration between stores and the dotcom team has opened the company’s eyes to new growth opportunities, especially in terms of inventory. In particular, the company often uses the online channel to influence the store’s merchandizing strategies. As Hoguet says, “Often we use online to test and if the test is successful we’ll it into the stores. Or if we find that the online sales of let’s say extended sizes do very well, we’ll bring that assortment into stores. So it’s really very interesting to see how the [online and in-store inventories] interrelate.”
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