Case Study: Macy’s Omni-channel Journey
This case study reveals a retail giant’s comprehensive
approach to omni-channel. With a revenue of US$ 28
billion in 2014, 885 stores across the US, and an established
online presence, Macy’s began its omni-channel journey
in 2008, aiming “to better serve the needs of customers”.
Macy’s research showed that about two-thirds of all
shopping trips start online with customers researching
options on their desktops or handheld devices. Customers
then visit the store to touch, feel, and try on the merchandise
before buying the item in-store or online at home.
This research exposed the limitations of Macy’s channelspecific
approach and convinced management of the
need for an omni-channel strategy.26
Today, Macy’s operates as an omni-channel retailer with
a single view of customers, inventory, and business. Its
strategy is based on the following key initiatives: the
My Macy’s localization program, omni-channel integration,
and Buy Online, Pickup in Store.
The My Macy’s localization program was launched
in 2009 to deliver a merchandise assortment and
personalized shopping experience that is unique to
the individual customer. It offers customers the ability
to predetermine what is available in shops.
With an ongoing commitment to leverage technology
to enhance the customer shopping experience, Macy‘s
joined a list of retailers in support of Google Maps 6.0
to display detailed indoor floor plans. These plans have
been included in Macy‘s smartphone app with other
associated mapping systems. According to Mashable.
com, shoppers now have a utility to get around stores,
find products, and sign up to receive offers based on
their location in the store.
Macy’s initiative for omni-channel integration brings
the online and brick-and-mortar channels together in
a single integrated approach. It enables visibility and
management of inventory across channels. In addition,
it allows store associates to rapidly check system-wide
availability, locate an item, and facilitate delivery or
next-day pick-up by the shopper. And when fulfillment
center inventories are depleted, it can even make store
inventory items available to fulfill online orders on
the retailer’s website.
Instead of separate teams for each channel, Macy’s
now has a single integrated merchandising and
marketing team. This implementation started with
aggregating consumer data (such as preferences and
ongoing purchasing patterns) to achieve a 360-degree
view of each customer, and then the retailer analyzed
the data, gathered meaningful insights, and combined
this information into new processes to deliver a seamless
customer experience.
In 2014, Macy‘s rolled out its Buy Online, Pick Up in
Store initiative nationwide. In the same year, some
US$ 1 billion of Macy’s direct-to-customer shipments
originated from Macy’s stores. As the name suggests,
this new process combines online and in-store channels,
establishing a new dimension in customer access and
convenience, according to Terry J. Lundgren, Macy’s
Chairman and CEO. As well as improving the customer
experience, all of the above initiatives have achieved
cost savings from inventory optimization.
Having reviewed retailer approaches to a personalized
and seamless customer experience across channels, the
next chapter considers implications for the physical
supply chain and its information systems.
“We are working to provide our customers with
seamless experiences, no matter how they choose
to shop with us, and to utilize the strengths of each
channel to satisfy demand and service customers‘
needs better than we could if we did not operate
multiple channels.”
– Karen Hoguet, CFO, Macy‘s